Some Things To Remember When Running A Small Business

Several years ago, I worked for a small software shop. The company had gone through its number of growing pains, but seemed to be well established by the time I joined. Time would prove me wrong, and also give me some things to remember if ever I start my own small business.

1. Watch your finances. We attended a conference shortly after I joined. We stayed at expensive hotels and spent several hundreds of dollars a night on dining out an entertainment. The company covered all costs. Overspending can lead to problems…
2. Be careful how you cut costs. About six months after the conference, it was determined that the company was not making as much money as expected and that cuts would need to be made. In order to avoid laying off anybody, salaries were cut. My salary was decreased by 50%, which imposed quite a hardship. We were promised that the cuts were only temporary, and that as soon as salaries returned to normal, we would be reimbursed for all of the money we lost. Which leads to the next point…
3. Don’t lie to your employees. Turns out that the whole promise of reimbursement was just a pipe dream. I wasn’t too surprised by that. What surprised me was that the pay cuts were not equal, as I was told in the initial meeting. I actually took the highest cut — other employees took a 10–15% cut. I don’t care what kind of policies you have about keeping salaries secret; people will talk. If everybody is not getting the same treatment, tell them so and why. Of course, this behavior continued right on through the end of my employment…
4. If you’re laying off employees, do it right. This does not mean telling an employee that he needs to take all of his vacation time, then take unpaid leave until things “turn around”. This goes back to my previous point — we both knew that there will be no turning around, and that it was a ploy to keep from having to pay me for accrued vacation while screwing me out of employment benefits since I wasn’t formally laid off. Also, remember that you’re running a business…
5. Don’t play favorites. Oddly enough, I was the only one on my team who got pseudo laid off. The other team members were old friends of the CEO and owners. Coincidence? I think not. My team lead had a habit of not showing up until almost noon and leaving to “work from home” around 2 in the afternoon. This usually meant that he checked in whatever code he had when he left, more often than not breaking the build. Whenever he worked from home, he seemed to always have problems that would prevent him from receiving IMs or email. The end result was that the entire team would be stalled until he came in the next day. He had been given many warnings, but he also played golf with the CEO quite frequently, and I think the CEO allowed his personal feelings to get in the way of business decisions. I’m not saying “Oh, poor me” here. I had my share of friction with my managers, so I was not surprised to get the axe. (Post coming soon on why managers don’t like me.) I was surprised that a guy who flat out refused to do work that was assigned to him would get to stay.

I got fed up and told the company to suck it up and lay me off. Luckily, I found a job within a couple of weeks and didn’t need to file for unemployment. A couple of weeks after I found my new job, the entire company went belly up. Maybe with better management and practices, the company would still be around. Maybe it was doomed from the beginning. Either way, I came away with some hard earned lessons that I won’t forget any time soon. I may not ever own a company, but many of these points apply just as well to managers and team leads.