10 Ways to Avoid Failure

After being in business for 27 years, Robert Howard Associates closed its doors back on January 10. It wasn’t a move the owners wanted to make. To the contrary, the Boulder, CO-based design/build firm had been riding high from 2004-2006. Two years later, though, the market started to deteriorate—and in 2009 it cinched up tight.

“Our forte was outdoor living spaces, and the work just dried up,” relates Rich Wilbert, who with partner Mike Ransom had purchased the company in 2002. “We had some work in the pipeline but not enough to cover overhead, and we already had been pouring a substantial amount of our own money into the business to keep it going. So we made the very difficult decision to call it quits.”

It wasn’t just the economy and loss of work that forced the partners’ hands. In 2006 they discovered that an employee had stolen $150,000 from the company. Wilbert said the ensuing 1.5 years prior to going to trial and getting a conviction caused them to lose focus. As he put it, it was “the perfect storm.”

Still, despite the economy, loss of work, intense competition and theft, Wilbert says they could have dodged the inevitable bullet by following some of the following business tenets that the experience was late in teaching them.

Protect your business from employee theft

Wilbert says that the employee theft fiasco created the most havoc, primarily because it caused the owners to lose focus. Wilbert advises company owners to open the mail instead of giving the responsibility to an employee. Match credit card receipts to the job tickets. Actually make bank deposits yourself.


“It would have been easy for us to offer landscape maintenance to existing customers, but we were totally focused on design/build,” Wilbert admits. “We could have looked at other business opportunities as well, including washing windows and performing other full-service property maintenance services.”

Hire the right salespeople

It goes without saying that Robert Howard hired the wrong person when she ended up stealing from the company. But Wilbert says their company also struggled to find design people who understood the sales process. Looking back, he says it would have been more productive to have a salesperson devoted to selling instead of expecting designers to also wear a sales hat.

Plan at least six months in advance

No matter how much work you have today, plan at least six months in advance. Also, establish firm deadlines. “Hoping that something will come in is not going to work," Wilbert says. "Having contingency plans in place is also important."

Retain a consultant or business coach

Wilbert says a consultant would have encouraged them to diversify sooner and find a salesperson. That advice, if implemented correctly, could have helped save the business.

Keep a cash reserve

This is easier said than done for two reasons. “There’s always a place to spend the money, and most businesspeople hate to see money just sitting in a bank account and not working for them," Wilbert says. "Still, it’s important to have sufficient capital to weather any economic storm. Plan to have at least six months in reserve, or maybe more, depending on the mix of work.”

Pay attention to financial indicators

The business climate can change quickly so it’s important to monitor sales revenue, labor numbers and material purchases. “Numbers are your livelihood,” Wilbert emphasizes.

Stay focused on the task at hand

Again, Wilbert became so wrapped up in the employee theft fiasco that he lost sight of business goals.

Realize you’re not alone

Other companies have been through hard times. Talk with their owners about ways to cope. If nothing else, it helps to know that your circumstance is not that unusual.

Act before it’s too late

“When the economy or other factors that influence your business cause you to stray from your business plan, face reality,” says Wilbert. “Determine the cause, or in our case the causes, and make adjustments.”