The Terrible Two

I recently ended my second year of business as the owner of a Private Investigations company.  That is a milestone.  Depending on what you read, nationally 50% of small businesses fail with in the first two years.  I’ve read in industry publications that 85% of PIs don’t renew their licenses after the first two years.  So, it appears I’m ahead of the curve.  However, again depending on what you read, there is 50% – 85% chance my company won’t be around at the five-year mark.  I’m planning on beating those odds.

My first year was phenomenal.  See the blog I wrote after one year in business to see the numbers:  http://jketexas.com/jke-turns-one/.  This second year was much less than phenomenal.  It was shocking, frustrating and ego deflating.  I still made a nice profit and I’m not going out of business, but it was such a let down from where I was one year ago.  All of the blame for lack of performance lays squarely on my shoulders.  It wasn’t a failure of my investigative abilities.  I had enough returning and referral business to prove I deliver a good product.  It was a failure of my business ability.  I realized I’m not an entrepreneur.  Hell, I’m not even a second-rate businessman.  I’m just a guy who loves to investigate and help people.  What I have to become in order to survive is a business owner who offers investigative services.

The first few months of my second year were crazy busy. Not with a large client base, but with a few big clients who needed large scale investigations.  I didn’t know it at the time, but by the end of the first quarter I had already made half of the money I was going to make.  Thanks to my hubris and the belief I was somehow special, I made two costly mistakes.

Lack of Marketing/Lack of Focused Marketing

During those first three months of this year when I was so busy, I was putting potential clients on a wait list, and I quit marketing.  Why should I spend the money?  They were knocking down my door to give me money.  This wouldn’t end, right?  Wrong.  It wasn’t just about spending the money on Google ads.  I also quit blogging, doing Facebook posts, LinkedIn posts, and tweeting.  Those didn’t cost any money, just my time.  As a result, my presence diminished except for the few clients I was interacting with in real life.

After the first quarter, the work slowed down.  After a month or so, I began to panic and started to spend my marketing dollars freely and foolishly.  I spent thousands of dollars on broad based Google Ads, and they brought me in the people I didn’t want to work for.  My target audience is attorneys, businesses, and business people.  I have an expertise in fraud.  I’m a Certified Fraud Examiner and a 29-year FBI Agent.  I want to attract attorneys who have the enough business where they see the value in using a private investigator to assist them in criminal and civil litigation.  I want to attract small to mid-size businesses and business owners who need help in fighting fraud.  My advertising, for the most part, wasn’t attracting my target audience.  It sure did attract hundreds of people looking for next-to-free services from me.

Chasing Bright Shiny Objects

I was asked to appear on a national television show this summer.  It had to deal with the Church of Scientology, and the alleged crimes its leadership may be committing.  I wasn’t speaking as a private investigator; I was speaking as a retired FBI Agent.  I went not only to give my opinion of the apparent evil that is in Scientology, but also hoping for a boost in recognition and to help drive business to my firm.  It drove people to my firm, but not with the promise of new paying clients.  The people who reached out to me were looking for free work.  These weren’t poor people.  They were well-to-do individuals, organizations, and businesses.  They thought I should help them in their fight against Scientology, and I should do it for free.  For a while I was sucked in.  I thought that if I do free work, in the end it would result with paying clients.  Six months later, not one paying client. Plenty of people still asking for free stuff.  Finally, I had enough.  I don’t make enough to give away hundreds of hours of free investigative services. I was chasing a bright shiny object, and grossly overlooking the everyday objects I always had that make me happy and pay my bills.

There have been other bright shiny objects in the form of really cool equipment, databases, and software.  I have been buying these things like I was on a Rolls Royce budget, when my truth is closer to a Ford Fusion.

Asking for Help

I didn’t realize what I wrote above until late this year.  It wasn’t a serendipity moment I had all by myself.  It was the blunt two-by-four to my forehead delivered to me by my business coach.  Yes, I hired a business coach.  A private investigation business coach to be exact.  His name is John Hoda, and he has over 22 years in this business.  I had read John’s books and listened to some of his podcasts, and his words spoke to me.  When I found out he offers coaching, I was quick to sign up.

The most significant thing John has taught me so far is:  I’m no longer an investigator, but I’m a businessman who offers investigation services.  I hate to write those words.  I have spent 33 of my 57 years as an investigator.  It is what I love.  It is my passion.  It is my “why.”  John helped me realize that once I hung out my shingle, all that changed.  I have a business to run, and John is helping me to learn how to run it right.  That doesn’t mean I have to diminish my passion for investigations.  I just need to increase my passion for running a profitable business.  One that can leave a legacy.

My work with John will continue throughout this third year.  I’m confident, with his help, I’ll be around at the end of this year and for many years to come.