One surefire indicator of success in business is how you deal with mistakes.

I’ve made a lot of them in 10+ years as a business owner. Fortunately, I’ve learned more about how to manage a design business from my mistakes than from my successes.

Here’s a list of my “best” mistakes:

10. Letting projects get stale. Many clients have trouble keeping their design project on the front burner. In some cases, if you don’t keep the ball rolling, weeks or even months can go by without progress being made on their project—often because you’re simply waiting for the client’s feedback. Failing to keep in touch with busy clients can lead to situations where the client might want to backtrack or even start the process over. Not a productive use of anyone’s time.

9. Prioritizing e-mail. If left ignored even for a day or two, e-mail can pile up quickly. A couple years ago, however, I found that prioritizing billable work over e-mail and non-billable work led to a dramatic increase in productivity and profitability, without any significant communication problems. There’s less of a need to talk about work if the work is already done!

8. Disorganization. During my first few years in business, I developed a nagging fear that projects and client relationships would blow up in my face. The solution? Getting into the habit of staying organized, by doing the following:

• Setting reasonable expectations with clients, and communicating with them throughout the process of developing their website.
• Converting all service requests to tasks, with an automated reminder scheduled for each task.
• Dealing proactively with issues that might cause problems, like server backups.
• Hiring people to answer e-mails and phone calls while I was on vacation.

7. Tolerating bad clients (and ignoring the warning signs). My passion is helping clients to reach new heights in business through the effective use of technology. Most clients are great, but now and then, you get one that’s difficult to deal with and not truly invested or interested in the work you’re doing for them. The single biggest red flag, in my experience, is a client that consistently fails to respond to e-mails and return phone calls. Inevitably, the client ends up being unsatisfied because they haven’t bothered to listen, to understand what you’re doing, or to provide adequate feedback. If a prospective client is hard to reach before they sign a contract, it might be wise to consider it an opportunity to run the other way.

6. Not controlling the design process. Clients need be educated on the steps and limitations involved in the design process, before the project begins. This includes a project timeline, a list of deliverables, the number of design revisions allowed, and when the project is considered to be completed. Without setting these expectations, there’s a higher chance for misunderstandings, backtracking, and having to do more work than you bargained for.

5. Spec work. Once, and only once, have I fallen into the trap of providing design services for free. The prospective client was a big-city law firm that I was eager to work with. They wanted to see the caliber of work that my company could offer them, so I went ahead and prepared a design concept. And then another, and… well, let’s just say that we didn’t get their business. Lesson learned: If a client wants to know what you can do for them, show them the work you’ve done for others, and leave well enough alone. Without taking the time to get to know a client and their needs, and without a sufficient budget to do the job right, then the end result will probably not meet the client’s expectations. (Not to mention the fact that giving away your services in advance gives your client total control of the relationship, which is ultimately not in their best interest anyway.)

4. Poor delegation. Over and over again, I’ve learned the hard way that managing others effectively requires the same level of diligence and attention to detail as if you were doing the work yourself. Without (a) conveying the specific expected outcome, (b) monitoring and reviewing the work, and (c) empowering developers to make decisions on their own, you’ll spend too much of your time putting out fires and reassuring your clients. If you have employees or contractors, or if you plan on hiring anyone in the future, I highly recommend If You Want It Done Right, You Don’t Have to Do It Yourself!: The Power of Effective Delegation by Donna Gennett. It’s a very quick read and a worthwhile investment.

3. Partnering with the wrong hosting providers. I’ve always tried to differentiate my company by being reliable—not letting things slip through the cracks, being available by phone and e-mail, etc. Unfortunately, it’s difficult to be reliable if you partner with the wrong people. We learned this the hard way when the majority of our client websites were down for about 48 hours, thanks to a server failure that our hosting provider was unable to deal with quickly. We now manage our own servers, back them up nightly, and monitor them 24/7.

2. Biting off more than I can chew. This can take many forms:

• Underbidding on a project.
• Agreeing to an unreasonable deadline.
• Accepting more work than you (or your team) can handle.
• Trying to do it all without hiring some good help.

On two occasions in particular, early on in business, I took on projects that lasted too long and paid too little, because of inadequate planning and an unwillingness to delegate. This led to working long hours for months on end.

1. Working without a contract. A month or two after making my design business a full-time venture, I met with a photographer who wanted a new website. He sounded eager to move forward, so I told him I’d get to work. At that point in time, my preference was to do business on a handshake, and avoid pesky formalities like proposals and contracts that might make a client change their mind.

So I designed and built the site, but didn’t hear back from him. Then I sent an invoice, and once again I didn’t get a response. Eventually I reached him by phone, and he indicated that he was still trying to decide whether he wanted a website!

Needless to say, I was upset, and when I explained that I built the site like I told him I would, he just repeated that he was still thinking about it. Being newly self-employed, money was very tight, so choosing to trust this person proved to be a costly mistake on my part.

After that, I made sure that all new clients signed a contract, which included a project description and detailed terms of service. This has numerous benefits:

• It keeps the client happy because they know what they’re getting.
• It reduces the likelihood of a dispute or a lawsuit.
• If written properly, it can limit your liability in the event that something goes wrong.
• It weeds out a lot of potentially bad clients.

As a perfectionist who hates conflict, I’ve learned that it can be challenging to overcome and capitalize on my own missteps. But it can be done, and in fact it must be done in order get beyond the frustrations that lead many designers to walk away from entrepreneurship.

Do you use mistakes as a tool for improving your business, or do you allow them to cause stress and discouragement?