What are some of the most "expensive" learnings you have when opening a new business?
Answers (79)
Chris P.
Internet Marketing Consultant
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Putting money into "tactics" and not into development. A fancy website, business cards and stationary can wait. Put it off as long as you can, or go the cheap (or free) route for at least the first year.
The BEST money I spent was on small business consultants to guide me on where to develop, optimize the money I had access to and give me their knowledge of the mistakes they made during their startup so I didn't go down the same road.
If you are married, do everything you can to involve your spouse (not in the day-to-day, necessarily), she/he is "on-board" and willing to support you.. If you are a guy, seek your wifes knowledge, woman have senses we guys do not, don't miss this resource. Read "E-Myth Contractor", helpful no matter what business you are getting into. (I have read some very helpful books pertaining to "business") contact me for my mistakes in the 2 companies I have made my attemps at. In the process of building # 3 with the knowledge from those mistakes in business # 1 and # 2 :)
Christine H.
Do you have your copy of my FREE Report yet? Get "Top 10 Linked Profile Success Secrets" now at: goo.gl/beKnU
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Learning to have disciplined focus on profitable revenue-generating activities, Cesar.
Leslie K.
Franchisee | Franchise Consultant | Dynamic Speaker, Trainer and Blogger
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Cesar,
NOT spending money on administrative help. That was stepping over dollars to pick up pennies. I waited nearly 10 years to bring on admin help. I wonder how many revenue opportunities I missed out on because I was caught up in dealing with admin work.
Renjit E.
Coach: Organizational Behaviour and Entrepreneurship
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Investing in a big start up...lots of money, time, energy, motivation and other resources without having conducted a small, adequate, inexpensive test and then taking the next step on the basis of results.
John C.
Developer of The Company Strength Program
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Be careful with long term contracts.
Talk to somebody with lengthy business experience before you sign.
Links:
Tash H.
Writer, Blogger, Communications adviser, Owner of Word Constructions
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Thinking you can and have to do everything yourself. Getting help can save you so much in time and money - outsourcing gets you fresh perspectives, frees up some of your time and often the expert will do it so much faster than you so will influence sales sooner.
1) Don't let technology or perfection stand in your way... and this is coming from a web designer =-)
Don't wait until your brand or all your systems (shopping cart, email marketing service, online appointment system, logo) are in place to start doing business. All these elements are supposed to be tools - not obstacles to doing business.
I get a lot of phone calls from start-up entrepreneurs who have fabulous visions of where they want to go, but are on a tight budget or don't know how to implement them. A simple web page with a way to get a hold of you (phone, email form) is all you need to get started. The important thing is to start bringing in revenue as soon as you can.
And don't wait for your site to be perfect to launch it. You will always be tweaking the words and the look. I haven't met a client (including myself) yet who doesn't want to change something. *grin*
In regards to tools such as carts, email marketing service, etc., there is no one perfect tool. Believe me as I am constantly looking for one. Every one of these is going to have something you don't like about it. Pick one that is reputable and get started. Write down your business process... what the tool does and what you do manually.
Jake C.
Entrepreneur | Business Owner | Web Startup Expert | Web Projects Consultant | Open Networker
Hi Cesar
The most expensive mistake is to not concentrate on sales. I would argue that for the first two years all a business should be concerned about is maximising sales: maximise the value, maximise the frequency. Most startups fail because their owners are more interested in the "fun" stuff: strategy, marketing, promotion. When all they should care about is making as many sales as they possibly can, day in, day out.
Selling is not seen as "sexy" - and it's a difficult profession. For these reasons, it's neglected but it's the most important skill of any business. Nothing in business happens without there first being a sale.
Everything else can wait - the office, the nice furniture, the new computer, the fancy stationery. Concentrate on sales and nothing else. To ignore this is the most expensive mistake a startup can make.
Wallace J.
Multimedia Producer, i3D Programmer, Acrobat 3D PDF, Android App, Virtual World & iTV Design, Kindle, Nook & Sony eBooks
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Not getting paid up front.
This may sound like a no-brainer, but expect your clients to treat you as a professional, and establish reasonable boundaries. I found that when my partner and I started our small business, we were so eager to bring in clients and please them, we often under-bid our work and did not hold clients as accountable to payment deadlines, etc., as we should have. Now we're dealing with a client who owes us a substantial amount of back payments and has just filed for bankruptcy. In retrospect, we should have stopped providing them services a year ago.
That is the most valuable lesson I have learned -- it's up to you to dictate and drive how you want your company to function, and how you and your clients will interact. I know I felt grateful to have the opportunity to run my own business, but I had to learn that being grateful and accommodating is not the same thing as being a pushover.
Judi B.
Your printing & promotional product partner, recognition & award advisor and party supply resource!
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We bought the first generation of a new piece of equipment. The machine rarely worked optimally, the manufacturer ended up going out of business and we were forced to drop an entire product line as a result.
We also wasted thousands of dollars on ineffective advertising.
I did not minimize office infrastracture cost. The lesson is start with the absolute basics and then build up. A virtual office is the best way to get started Your biggest running cost is rent so keep it at a minimum.
You learn 'Money handling' and 'Back-up plan'.
Every peny you spend counts in new business and you get a close understanding of Money handling as the income is not constant and it entirely depends on you and the business.
You should have a backup plan for everything no matter how strong you believe in anything (business or people).
This is my understanding from my experience. hope i helped.
It isn't a problem of learning. This isn´t expensive. You need to learn direction of bussiness in university or study a master and other things.
If you don´t want study for these ways or you haven´t got any time, you can speak to a expert (a consultant) and they can explain you about a lot of things of bussiness. If you need formation about sell, they explain you. You need formation about marketing 2.0, they can explain you. But this, it´s very expensive.
You decide.
Dr. Jacqueline T.
Health Care Consultant Dedicated to Keeping the Caring in Health Care
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For me, two of the most expensive lessons were purchasing instead of leasing certain equipment and not being as watchful as I should have been with marketing and advertising costs...after a good cashflow is established, then purchase what you need...Dr J
Ravi K.
Startup Mason
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Dont depend on anyone...Anyone !!
Cheers
Ravi Kikan
Startup Specialist Group
http://lnkd.in/9GqY8P
Ramesh K.
CTO & Human Search Engine
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Presuming that highly paid people will provide highest value add !!!!!!!
Ramesh
The Human Search Engine
http://www.computerbasedexams.com
Clarification added May 18, 2011:
.....and then you realize that they may not !!
Startups need lots of positive energy and enthusiasm irrespective of how much you invest on what.Generally the learning is considered expensive when you invest/spend more and learned something that otherwise you have
could have learned by applying knowledge or thru any other means.
e.x. Guidance form SMEs,referring to any statistics etc...
Suresh Kumar N.
Entrepreneur
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Do not trust strangers (even if they appear to be good to you).
Tracy D.
Product/Program Development, Business Strategy, Founder of MindClings®
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Cesar - You have a lot of good answers coming in (and a couple of not-so-good ones). My additions are :
1. If you value the friendship, don't hire or do work for your friends. There are plenty of other clients and employees out there. Don't sacrifice a good friendship.
2. If you are entering into business relationships with partners or clients that require contracts/proposals, pay attention to the fine print. Have a professional review them and DON'T assume anything. Spell it out. Early in my prior business, this one cost me big with a client who found a loophole in the contract and exploited it. Lesson learned.
3. Be involved in your cash flow and expenses, even if you have someone handling that aspect for you.
4. ALWAYS, ALWAYS listen to your gut. If something doesn't feel right, walk away from it.
Gina A.
Helping Businesses Succeed: Projects * Processes * People * Technology (http://www.AbudiConsulting.com)
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- Not calling on experts when necessary - such as attorneys, accountants, etc
- Not taking the time to understand the market you are entering
- Not understanding the best way to structure your business (LLC, Inc., etc.)
- Not developing a business plan - even if you don't need investment monies, a business plan helps you really think through your business idea
- Not understanding the amount of time it really takes to start and run your own business
Those are just a few thoughts
Best,
Gina
Links:
Not understanding the difference between doing the strategic things needed everyday as opposed to the little stuff. Start your day doing the strategic things that help grow your business. Too many people stay on Facebook and read their email all day, and it can be a time waster.
Cristina F.
Technical Translations - Pharmaceutical Consultant - Lawyer -Chief Science Officer- I Do It- Creative Problem Solver
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As a lawyer, my most expensive learning was not to be paid upfront for legal expenses the client had to make, put my own money on that, and, many a time, see the customer change their minds and never giving back the money I had invested for them.
Joel C.
Founder at Deepfootprints.co.uk | PPC Consultant | SEO Consultant | Fantastic results through damn hard work.
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Keep up the pace. Do not assume that you are on safe ground too quickly. A big client may pull out without warning and you are then left with a gaping hole in revenue and spiralling costs. Always have a plan to cover yourself for the worst imaginable thing happening.
Jill M.
Web & Social Media Manager at LookSmart
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Because my business is 100% online, I outsource many of my smaller tasks through Odesk. However, you can sometimes waste a great deal of time and money on totally useless contractors. I've had great experiences and HORRIBLE experiences. I usually ended up wasting more time than money.
Hania W.
Social Business Marketing Media Consultant specializing in SMBs & Non-Profs
A lot of terrific answers here!
Another thing is to keep tight control on your inventory. Don't try to be everything to every customer or client. More businesses sit on their money with overstock instead of having the money for growth.
And beat your competition by always giving just a little bit more than you're asked for.
Links:
Kim B.
Small Business Specialist | Business Consulting | Tax Planning & Preparation | Payroll
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As a CPA, I talk with a lot of business owners. One the most "expensive" things is that business owners are often tight on cash, so they tend to try to do things themselves instead of calling in the professionals when they should. And, in the end, it usually ends up costing them even more.
Most people that decide to open their own business are not fully aware of the amount of time involved to do everything that is necessary to run a business. For example in a service business, the owner tends to do whatever their thing is...and they may not have enough time to get the bills out at the end of the day. Of course, if the bills don't get sent out, the money won't come in...and if the money doesn't come in, there isn't money to pay bills or to reinvest into the company...adding a lot of stress to the business owner.
Oleg T.
Editor in chief at www.CornerstonesWORLD.com
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1) Investing in a new product without testing/researching the market
2) Underestimating your competition
3) Taking out a business loan or letting in a rogue "investor" without reading the fine print and weighing the pros and cons of said funding
Any one of these can easily cost you your entire venture and leave you in substantial debt to boot.
Oleg Temple
Links:
Bernie S.
Owner/Principal Consultant, The Siben Consult, LLC - helping clients imagine, articulate and realize their goals
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Remember to find professional financial help, and to ask them the right questions. When I opened my business in California, I didn't know to ask, and nobody volunteered the fact that there was a minimum state tax, and that I would owe for the entire year even if I opened my business in mid-December. If I had waited two weeks to file the papers, I could have saved $800. Ask questions - opening your mouth and looking ignorant is way better than keeping it closed and proving it.
