Learn from Your Mistakes

Seven management mistakes: Here’s how you can avoid them.

By William Lynott

Even in the best of times, life in the water well contracting business means dealing with a full plate of challenging decisions, any one of which can have a negative impact on your operation. And with today’s unpredictable business climate, even a tiny management error holds the potential for serious damage to your bottom line.

Here are seven costly management mistakes you want to avoid, along with advice from experts on how to keep them from harming your business now in the new year and in the years to come:

  1. Trying to Do It All Yourself

You’ve heard it said many times—If you want something done right, do it yourself. That’s a classic philosophy with an undeniable grain of truth to it. However, when it comes to running a complex business like yours, too many owners suffer from a costly overdose of do-it-yourself-itis.

Failing to understand the importance of delegating is one of the most common mistakes that hinder growth in small businesses, according to experts.

“Just because you can complete a task, doesn’t mean you should,” says management consultant Andrea Michalek of Plum Analytics in Philadelphia.

“Anything that is not a core-competency of your business should be outsourced. Without hiring any additional employees, you can now get the outside help you need at prices you can afford.”

If you find yourself neglecting some basic responsibilities of your business such as marketing or customer relations, it’s probably time for you to put more trust in other people, including your own employees. Given a chance, many will surprise you with positive results.

  1. Failing to Understand the True Meaning of Marketing

Many drilling contractors are so busy dealing with day-to-day operations they never get around to putting together a solid, business-building marketing program.

That’s a serious mistake. Marketing is a basic building block in the construction of any service business. Yet, many owners shy away from all but the most obvious ways to promote their businesses.

While advertising is an essential part of marketing, it is only that—a part. An effective marketing program requires much more than advertising. Marketing embraces all facets of your operation.

To be an effective marketer, you must nurture your business image, sell yourself as well as your business, and concentrate on making every customer a satisfied customer. There is no other way. Competitive prices alone won’t do it. High quality skills alone won’t do it.

Marketing is a complex fabric woven of many threads. Every owner should spend a reasonable part of his or her time learning what goes into the makeup of a complete marketing program.

Too many small business owners stammer when asked, “So what do you do?” Michalek says.

“Referrals and word-of-mouth marketing are two cost-effective methods to grow any business. If you cannot succinctly express what you do and whom you serve, you’re shutting the door on your best source of new customers.”

  1. Failing to Avoid the Pitfalls in Hiring Friends or Family

Many small business owners owe their success, at least in part, to an employee who is either a relative or a friend. When such a relationship works, it can work well—when it doesn’t work, it can be disastrous.

“You should use extreme care in bringing a friend or relative into your business,” says educator, author and career consultant Katharine Hansen, Ph.D. “If the relationship doesn’t work out, terminating it can be a serious problem.”

Hansen tells of one business owner who hired her own sister.

“Now she’d like to sell the business to go back to college teaching, but finds herself responsible for her sister’s employment. This is but one example of the kinds of unexpected traps that lie in wait for business owners who hire friends or family.”

  1. Failing to Take Action on Unsatisfactory Employees

Discharging an unproductive or disruptive employee is the sort of unpleasant task most business owners dread. However, failing to take action when necessary can be a costly mistake.

“Not firing a problem worker is one of the worst operating mistakes you can make,” writes James Walsh in his book, Rightful Termination: Defensive Strategies for Hiring and Firing in the Lawsuit-Happy 90’s.

“It keeps the problem worker around to create more trouble, making a bad situation worse. That’s not fair to you or to your other employees.”

Management consultant Linda Hanson, president of business consulting firm LLH Enterprises, agrees:

“Failing to terminate a problem employee can result in added stress on other employees who may have to take on more work, and dissension among those who can’t understand why the employee is being kept. All of this, in turn, can negatively affect the treatment of customers.”

In short, once you identify a disruptive or unproductive employee, it’s best to face up to the unpleasant task of terminating the relationship. Postponing it can only lead to more serious problems.

To help meet your professional needs, this column covers skills and competencies found in DACUM charts for drillers and pump installers. DO refers to the drilling chart and PI represents the pumps chart. The letter and number immediately following is the skill on the chart covered by the column. This column covers: DOK-1, 2, 5, 11, 12, 13; DOL-5, 6, 9, 10; PIG-5, 6; GOI-1, 2, 5, 11, 12, 13; GOJ-5, 6, 9, 10. More information on DACUM and the charts are available at www.NGWA.org/Certification.


  1. Failing to Follow the Principles of Profitable Cash Management

Making the sale is only the first part of a profitable business transaction. How you manage the revenue generated by your sales will determine how much of that money finds its way to your bottom line.

Profitable management of cash flow calls for never allowing any of your money to lie idle. The worst place to deposit daily receipts is in a low-interest or no-interest checking account.

Instead, open a money market account at your bank and have it linked to your checking account for telephone or online transfers. From that point on, deposit your daily receipts into the money market account—where they will immediately start drawing interest.

Never deposit receipts into your checking account. Keep a minimum balance in the checking account and transfer cash by phone or online only as needed to cover checks written.

While interest rates in money market accounts are anemic now, they have already started a gradual climb and you’ll automatically be set to benefit as the rise continues.

  1. Failing to Ask for Outside Help

“By their very nature, entrepreneurs are independent thinkers,” says Carl Robinson, Ph.D., a business management consultant in Chicago.

“That’s why they are often reluctant to reach out to others for help in areas where their own experience may be lacking. I feel that any small business owner will benefit from forming a peer group made up of owners of non-competing local businesses. This is an excellent way for a business owner to benefit from a no-cost advisory board. In a successful peer group, everyone helps everyone else through the exchange of experience and ideas.

“A good place to locate potential members of a peer group is one of your local service clubs such as Rotary, Kiwanis, or Lion’s Club.”

  1. Failing to Develop Good Hiring Skills

“One of the most common mistakes small business owners make is hiring poorly,” Robinson says.

“Most small business owners have never received any training in the selection and assessment of people. As a result, they tend to fall victim to every interview bias error known. If you make a single poor hiring decision, especially if you have fewer than 10 employees, you can be derailed big time.”

Robinson offers these suggestions:

  • Prepare interview questions in advance. Take notes so you won’t forget what the candidates said. You will either forget what the first interviewee said or mix his/her responses with subsequent interviewees if you don’t take notes. Ask each candidate the same questions so that you can compare answers.
  • Don’t go too far too fast. Don’t make a hiring decision based on your first interview. Take your time. Compare candidates.
  • Make the candidates feel comfortable—they reveal more if they aren’t on guard. If you make interviewees feel like they’re being interrogated, you’ll learn how they respond to questioning under pressure, but it’s unlikely they’ll tell you much revealing about themselves.
  • You must sell the candidates on the job and you, but don’t talk more than 20% of the time. Let the candidates do most of the talking.
  • Ask open-ended questions. Avoid questions that can be answered with a simple yes or no.


These seven missteps aren’t the only management errors that can negatively affect your business, but steering clear of them can go a long way toward optimizing your bottom line.

Bill Lynott is a management consultant, author, and lecturer who writes on business and financial topics for a number of publications. His book, Money: How to Make the Most of What You’ve Got, is available through any bookstore. You can reach him at wlynott@cs.com or through his website: www.blynott.com.

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