When I started my business in my early twenties, I wanted to create a professional environment that made me feel happy and allowed me to laugh. A vital part of this included building a team that could put their faith in me and that I, likewise, could trust. After all, trust is the foundation of all healthy relationships.However, I made the mistake of trusting to a fault.
As owner of Molding Box, I was initially required to micromanage the startup’s various departments – a task that becomes impossible when rapid growth occurs. In veering away from directing the whole production, I hired an accountant to come in and take care of the books. For a year and a half, my accountant extended her services to my company. And for eight of those months, she embezzled money to the tune of tens of thousands of dollars in cash, wreaking havoc on our books.
I suppose I got distracted wearing so many different hats, and I left the opportunity for too much dishonesty in one person’s hands. Looking back on it now, I see that the writing was always on the wall. I joined a long line of people who have made business mistakes that seem so avoidable after the fact.
It was just that, though: a mistake. It shook my foundation of trust, but it didn’t bring down the entire structure that I had built. We just had to go to work, picking up the pieces.
We started an entire department to handle the accounting work and double-check every detail. We hired an established firm to initially do auditing and accounting cleanup, and we then utilized them to hire and train an internal team. I learned to eliminate “winging it” when it comes to hiring for such an important position. The firm with accounting degrees/backgrounds was much better suited to train my team than I was, and it now runs far more smoothly.
With my new team, we stopped going into things blindly and put checks and balances in place. For example, all credit card transactions and daily outflow of money is double-checked. No longer is a non-stakeholder in the company allowed to make any financial decision without approval. We now have a saying: “It’s not that I don’t trust you, it’s that I don’t trust anyone.”
We were burned, simple as that. But when we realized the mistake, we also realized we could tie something off, move on to the next step and improve. Strangely enough, the outcome of this whole mess was a growth in our confidence and ability to move forward. It proved to us that we may stumble for a second, but we won’t fall from this kind of experience. We turned the negative into a positive, knowing that we wouldn’t be burned again.
With so many negatives in business, with so many mistakes to be made, we know to always find the positives that keep us marching forward. Our vulnerability was exploited, yet we came out on top; and from that point on, we’ve only been climbing higher.
Jordan Guernsey is the founder of Molding Box, an innovative company that provides order distribution, shipping, print services, and CD/DVD duplication. Jordan started Molding Box in his mother’s basement and has grown the company into an Inc. 500 list member.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.