In 2002, I started a luxury leather goods online store. A year later and $50,000 out of pocket, I decided to shut it down. In this post I’ll share with you the biggest business failure of my life so you can avoid the same mistakes I made.
We Wasted Too Much Money
We hired the best photographer we could find when I could have taken the pictures myself with my own camera. We started with 200 products in the catalog and that cost us a lot of money; we could have launched with maybe 15, learned what worked and go from there. We got the best business cards and stationery we could find. We didn’t use it at all.
Now, every time I launch a business of my own or help someone else launch theirs, my goal is to take the product to market as fast as possible and for as little money as possible. First you need to test the waters and see if there’s demand for your product. If there is, scale it up. If there isn’t, at least you didn’t lose a lot of money and you can move on to your next idea.
The Wrong Reason to Go into Business
I brainstormed business ideas for a few days. Then I chose one and decided to go for it. This is the wrong way to choose a business to start. The best businesses are born when someone wants something that doesn’t exist and invents it, or when someone is frustrated with the available options and sees a way to do something better. You don’t just brainstorm ideas and start businesses you know nothing about. Sell something you’d use yourself and your chances of succeeding multiply by 10.
The Wrong Partners
I’m a marketer. So were my two partners. We knew squat about the fashion industry. We knew nothing about finances or management. If you want to have partners, make sure every partner brings a unique skill to the table. I should have partnered with:
- Someone with 10+ years of experience in marketing or sales for a similar company in our industry.
- A seasoned CEO/CFO who could make smart strategic decisions. Probably I wouldn’t have been able to afford that person at the time, so I should have hired a consultant on-demand instead.
- Possibly an investor who could keep an eye on our expenses.
In all honesty, at the time I was only 20 years old and didn’t have much experience myself, so I wasn’t bringing much to the table either.
Perfectionism
It took us six months to launch a website that could have been launched in a week. I was too caught up in the little details to see that every day that we delayed the launch, we were losing money. I wanted the perfect website. I should have launched a good website and made it better later.
I Didn’t Want to See the Reality
I gave up too fast. When things weren’t working out, I told myself that “things would pick up.” I didn’t want to face the truth. As a business owner, you have to be able to face reality, no matter how harsh it is. It doesn’t matter that it’s “your baby.” Your baby is ugly and you have to do something about it.
I Wasn’t Willing to Get Out of My Comfort Zone
I was the only company selling these products online. My competitors would walk around stores, talk to the store owners and ask them to carry their products. I knew that would work for me too, but I didn’t have the guts to cold-call and sell my products in person. Being behind a computer was a lot easier.
As a business owner, you’ll have to do a lot of things you don’t like doing. At times you’ll feel extremely uncomfortable. Are you willing to do all this to make your business work?
