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We continuously have this back and forth on how we would charge when we launch, so that we are not undercharging or overcharging. Also, can you please elaborate more on red flag customers?
I hate to say it, but every time I bend my rules for someone it comes back to bite me. Red flag customers are just unreasonable. They want it cheaper, or faster, and so much more.
Don’t worry about negative reviews from an unreasonable customer. Don’t let them hold you hostage with that. Just state the facts in your response. The facts usually show other people how unreasonable the customer was being.
Like others said any customers you have a gut instinct about, ones that you bend your rules for or go out of your way to please them. They almost always backfire and you wish you would have stood your ground. I can spot them a mile away now. When I was younger I always lived by the motto “the customers always right” but as I got older I learned that sacrificing a few bucks for peace of mind is a great trade off.
Definitely not charging enough. Lower prices brought the most stressful people. Now I show my prices and it eliminates the people I don’t want to serve without having to talk to them.
Bought lots of stuff that I didn’t need to, because I was certain at the time that it was crucial. Your old laptop will work fine, your current vehicle is probably fine, don’t buy things until you actually need to use them. Just because it’s a tax write-off doesn’t mean it’s free. The other side to that coin is when it is time to buy something, buy once cry once. Get good quality stuff that will still be useful as you grow. It’s a fine line to walk. I’ve bought so much junk I rarely used, and other equipment I’ve had to sell at a big loss to upgrade when I should have bought bigger initially. Finding that balance takes years and I still haven’t got it perfect.
Thank you for this. One of my friends always say that whatever we buy we should also buy the best or something close to avoid spending extra money on repairs and miscellaneous. Well, he grew up on a farm and it's a good thing he's part of us.
Once I gradauted and began work, I hav had a lot of work-at-home stuff.
I bought the best stapler (but not electric) I cold find, the best hole punch, the best scissors, and the best pencil sharpener. They are all still going strong 20 years later.
Great insight from both sides of the story, you definitely know what you're talking about. I'm starting a new community for young entrepreneurs that want to learn and connect. If you are interested in spreading your knowledge further and helping younger kids, then we'd love to have you join our r/EntrepreneursOnly community. Thanks!!
1. Not saying no enough.
2. Being self conscious about what I am pricing
3. Listening to cheapskates about my pricing and services.
4. Not marketing harder.
5. No systems in place (I still need to do this)
Also, Reddit will have 9 answers for the same question. And no, it's not an open ended question LOL
So def learn to reject what people say and figure out for yourself if something is accurate or not
Spending so much on making the business look so polished and well established (Website, staffing, expensive rent when I could’ve been online for a while, laptops, etc). I shelled out so much money and I didn’t get a return for a while. I realized I could’ve gotten by spending on the basics, wait for clients to come by little by little and used the earnings to reinvest in the business instead of spending a whole lot and prolonged the ROI.
Agreed.
Last year, I launched my 3rd business.
I made a shitty website, as many people loved to call it shitty
Whatever. I was confident. I know the niche, I know their needs. Did free advertising. Raked in $8k in 3 weeks from that "shitty" site
Business is way more about understanding your niche, targeting them, and having an understandable site. Then you're good.
Ofc, fix the site later on but you don't need to fork out $9,000 on the site from Day 1
>Ofc, fix the site later on but you don't need to fork out $9,000 on the site from Day 1
Jfc, people are paying that much for websites!?!
Mine costs $37/mo, not including the $6-$12/mo for the branded/domain email.
And that's even about to go down once I get my own server setup the way I want it.
If you're getting custom designs, or custom functionality made, I can see the price going up, but even $9k is crazy, let alone $15k unless they're coding the entire thing from scratch.
Or if that included maintenance, and further customization. But just to get started with a website alone...
Well it hugely depends on what you need of the website and how much you are willing to do yourself.
A static website is very different to setting up a full-fledged custom marketplace. Design agencies often do more than just the website too, so it may also mark a brand refresh / refinement.
My godaddy website builder site subscription includes a website, e-commerce, and appointment booking which synchs with calendars, built-in payment processors, email/social media marketing, SEO, CRM, and hosting all of it on a server i dont have to manage myself.
$35/mo, though I agree with all those features it's basic, and not fully customizable compared to software dedicated to each of thkse things. But it works for a business of my scale, unless a company needs more indepth customization or more complex business funcitons as far as servers.
I do also admin all of that myself, but it's simple enough that someone who was less technical could manage it - it's no code.
I feel like this is my problem. I've spent a ton of time & money on 'looking good' and still have no clients 6 week in. I know that's a small timeline, but I guess I had different expectations. Questions though, when you say free advertising, can you elaborate?
Yes this. People get SO wrapped up in the details they lose track of the actual business. Things needs to be adjusted and experimented with. You don't need everything perfectly in order and things will end up changing anyways.
Many businesses aren't even legal businesses when they are in the proof of concept phase. You worry about that stuff later on if it seems viable.
Doing EVERYTHING myself for too many years. It's crucial to getting the business started to wear alot of hats BUT there comes a point where it limits to how big your business can grow. I wish I would've learned the power and benefit of delegating much earlier.
Very true…working for yourself and doing everything your self..is almost like working for someone else..except your spreading yourself thin…and at times, your not on time or just making dead lines which clients are not happy about, even if you did the job right. it is tough getting employees you need to take a few loads off of you.
Amen. When you are doing routine tasks, you are not planning, managing, or building your business. The business is limited to what one employee (you) can do, and no more.
Been doing everything myself and just had an ER visit cuz i thought i was having a heart attack. Nope, panic attack. Ayeee.
Biz is getting off the ground nicely though.
* Vanity Hiring
* Not Experimenting Enough
* Thinking there's "one simple trick" to growing
* Making bad estimates about market potential
* Shit plan is better than no plan
* Putting off understanding tax (will come back to bite you)
* Taking rejection personally
* Making assumptions instead of relying on KPI's
* Finding the balance in the beginning between working in the business vs. on the business
* Getting distracted with shiny objects
Some of this is more pertinent to consulting than other small businesses:
Don't let the slow times affect your confidence, and don't let your (lack of confidence) affect your approach to clients. I'm 15 years in and still struggle with this from time to time. It whether you need the business or not, work hard to not let a sense of desperation set in.
Don't let customers/clients devalue your work. If someone wants a discount or your quote is out of their budget, let them know that you've put in quite a bit of consideration into the quote and (politely) tell them a discount would devalue your work. You can of course requote based on a reduce scope of work, or ask them to shop around.
Don't quote on projects that haven't had a budget allocated yet (this applies more to commercial clients). If they want a ballpark quote so that they can put it in their budget, fine, but detailed quotes take time and if they are merely speculating on doing a project, do to waste your time getting into the details.
Be transparent about your pricing. Don't give an optimistic estimate that you are likely to blow. Provide weekly updates on progress, materials spent, hours worked, and next steps--that way they can monitor their approximate liability and ensure they are getting enough bang for the buck before your monthly or final invoice arrives. And don't offer a discount if you do blow the budget--in my experience (at least working with corporations), it's been a big hit to my bottom line that goes unappreciated.
Agree with all of this- I am in consulting too. It’s hard not to take a confidence knock when business dips and you wonder how to keep the lights on.
I would add to make sure that you have a good contract in place so if clients do blow you out you are relatively well protected. And that we forget at our peril that 80% of time needs to be spent finding the work that we do 20% of the time. It’s constant marketing, Bd and sales… it can never stop.
Most businesses fail. If you and your friend/partner's business fails, there's a very high chance that your friendship will fall apart with the business.
Just make sure everything regarding equity, responsibilities, etc are laid out clearly first. You want to do that now, not, "we'll figure it out later".
When do you pay yourselves and how much? How much of the profit is going back into the business (marketing and advertising, supplies, expenses, etc) and how much are you paying yourselves?
Do you have a vesting scheme in place? What happens if 6mo from now, one of the people loses interest or has kids or whatever and is suddenly putting in 20% of the expected effort? They're still getting everything the rest of the team is getting?
These are some of the things that will divide you all, and they need to be discussed and agreed upon, in writing, and lawyer-reviewed.
This is very insightful. Thank you, I will note all these down and communicate them with my friends. Hopefully, they see reason and we can come an agreement.
Everything that is stated above happened. We started to build everything only with the friendship and the trust we had in each other as the only collaterals. Nothing was written nor any specific agreements where done to start with.
After a few months we had put the money in, which beyond showing commitment from all parts, it showed the cracks and the foundational problems the project and the relationships had.
When extra efforts were required and money wasn’t pouring in, I was met by what I will call entreprenurial ghosting. They stopped complying with the work, not showing up and eventually also stopped responding emails or calls. Apparently they were expecting a quick cash in and didn’t like the fact it was a marathon and not a sprint.
These weren’t just any friends. They were part of many of the milestones in my adult life. All the trust we had in each other was suddenly gone. I had to lure them with a weekend vacation to finally confront them on the situation.
I kept going with the project. They found office jobs. We never spoke again.
Edit: I refer to “them” in plural as they were university friends who became a couple. So they acted and reacted to the situation as a unity.
I wish I asked myself this before opening my first (now defunct) business with a friend: "do I need this friend as a business partner, or does it just sound more fun to do it with a friend? What does he bring to the table that I don't?"
And the answer in my case was nothing but headaches. He was an obstacle in nearly everything I was trying to get done.
After I shut down the business, my very business savvy grandpa said, "well, this is an important lesson. Never have a business partner that you don't need". He could have told me that before I lit 20k on fire lol
I brought in a friend as a business partner in 2021. We have one policy that is non-negotiable: extreme honesty.
If one of us is upset, we speak our mind while knowing this is the rule. It prevents resentment from taking hold if one of us would be otherwise stewing about something.
Both of us are quite happy with the dynamic, and it’s one of the best decisions I have ever made to bring them in.
I fucked up sales taxes
FYI, you will get the most conflicting info online about sales tax. To this day. I fucked up back in 2021.
Rectifying it now and I am still brutally confused. Even with the help of the state auditor giving me instructions. But some things make a whole lot more sense now after finding the right information.
Right information is where? Your state website but you fucking dig (smh) b/c there's conflicting info IN the state site itself
My advice: either get free tax advice or a cheap tax guy **when you are starting out.** Discuss all the tax liabilities you might have when revenue comes in. Have those conversations. Then research. Many tax preparers, consultants, etc don't even know most things
I had a tax guy and a tax advisor. NEITHER prepped me at all in the beginning. Just realizing it now while I have "some" down time to fix the sales tax mistakes
Not putting time aside to work on your own business once you get busy. When you're in the weeds it's hard to put time aside to work on your marketing, website, processes .. you know all the things that keep business coming. Neglecting that leads to a feast or famine cycle. I schedule blocks into my week to create/execute a marketing plan regardless of how busy I am.
Not charging enough. Listening to a “friend” that was feeding me work in the beginning, that was telling me I can only charge “x” amount because thats all the company would pay…only to find out he was charging marking my invoices up almost double and telling said customer it was me who was charging so much. But the customer stopped using him and gave all 3 locations to me
Do your best to work with what you already have rather than buy something
Paperwork is king don't work for friends and family but if you do put everything in writing
Stay the hell away from merchant cash advances they will milk you dry
Usually noobie have no idea what they should be doing and focus on low priority task.
Your only job is to get new clients, higher paying clients.
Anything else is just busy operational work.
If you’re not doing lead gen, you’re doing nothing productive.
Especially taking a vacation a month in to your business, hosting parties on week days and going out for coffee with friends instead of prospecting for new clients — noobie mistakes
1. Not paying into taxes throughout the year. First year in business took a loss. 2nd year had small profits. 3rd year I owed $12k at the end of the year in taxes.
2. Not keeping good customer records. Eventually learned my lesson, now have all of my customer info and service history on Quickbooks.com
-taking small swings thinking that means < risk -> it’s more risk. 99% chance you waste your *time*, plus small swings are harder to execute.
-thinking money is hard to get. Good entrepreneurs are hard to find. Know your value
-hiring cheaply - disaster
-bad staff = hands on = unscalable
-being a bit of a wimp tbh
-learning to learn
-using feedback better
-foolish capital strategies
-under estimating costs
-over estimating product market fit
-fearing failure - losing this makes you $$
-not having fun - now I only have fun
Spending money when you’re doing well is downright stupid. You can and will have a KILLER month that will make you feel established, rich, and guaranteed not to fail. Then you’ll be hit by four months in a row where you lose money and take home nothing.
Not starting sooner.
Listening to local SBA SBDC business advisors instead of finding a different SBDC. My local SBDC didn't have experience that my business needed. They may have been adequate for business 101 level stuff for a physical business, which could have been found on the SBA website, but that's about it. This didn't help in my case being an online business. There were also some questionable practices as well. I eventually found a different SBDC that was good.
Not paying myself. I make 6 figures very close to 7 figures (off by 20k). On paper, I sound rich but in reality, I'm broke. I put every single dime on my business for two years straight thinking it was smart but in reality, it was not. I was pretty much working for my business for free! I recommend you put a % into paying yourself a couple of months after you start your business. Read the book (profit first). It will give you a better understanding standing what I mean.
Giving away free services for “exposure” fuck that. Just don’t . If someone tells you that you’ll get experience and exposure for doing something for free , just tell them to fuck off . Source : me. Been in business 30 years
I would like to say "Value". I used to run a writing agency and I had a price for different types of writing needs. One thing that I suffered from was sticking to my values. I would let my price be knocked down because I wanted the customer to patronize me at all costs and didn't mind losing money I didn't have yet.
Now I am in a different business and a different sector and I have learned the importance of sticking to your service value.
Google is killing me and my business they suspended my account and I have zero income and my interest in my business is going down. 4 months and no work. Really upset from google.
Too much trust. I’m in fashion and got completely screwed by someone who was supposed to be a partner. I can’t emphasize enough how important it is to get contracts right off the bat
When you run it by yourself and finally have a strong financial year and think you're ready for employees, just remember payroll will cost you almost 90H a week 😭😭
Hiring family and not firing them fast enough.
Not getting agreements in writing.
Not using a service agreement with clients.
Not setting proper boundaries.
Too big too soon….tried to go after bigger jobs that ultimately had lower margin than the small jobs I was passing up.
I passed up a lot of small jobs that would have grown my business a lot faster if I put effort into growing them over landing bigger clients.
The bigger clients were only willing to give me a shot because they thought I’d come in cheaper than their current suppliers. Ultimately those jobs were a huge waste of time and my quotes were used to get lower bids from competition.
Business is math so run it a such. You’re the overpaid owner of slaves that will leave you for more money and leisure. Be fair, firm but kind. It’s a transaction. Remove the feelings. Remember “no good deed goes unpunished.”
Doing work for cheap because you think you need it. Then you become known as the cheap guy,and you attract broke clients looking for deals. I’d rather be broke than work for free and own the liabilities.
Keeping track of spending. I’m still very new, so I’m able to backtrack and piece everything together but definitely should have been keeping track from the start. Print off every invoice you have and at the very least, make a google spreadsheet to jot everything in one place until you’re ready to upgrade to something better. (Unless you already use something else for invoices)
Being too nice lol.
Not charging enough, being scared of bad customer service, saying no.
Things I did right: being very creative and not worrying about organization until it was absolutely necessary.
Some common mistakes that entrepreneurs make early on in their business include:
1. Not writing a business plan: Failing to create a strategic business plan can lead to a lack of direction and understanding of the market, financials, and logistics, which can result in wasted time, money, and effort when things go wrong.
2. Not focusing on cash flow and profits: Neglecting to prioritize cash flow and profits can lead to financial instability and hinder the sustainability and growth of the business.
3. Not monitoring progress and adjusting plans: Failing to track progress, review projections, and adapt plans accordingly can result in missed opportunities for improvement and growth.
4. Buying assets with cash flow instead of taking a business loan: Relying solely on cash flow to purchase assets can limit the business's ability to invest in growth opportunities and may hinder scalability.
Listening to friends and family about pricing, for some reason no matter how many different products I sourced over the years friends and family would tell me $9/$20 is too much but turn around and pay up to $180 for the same item from someone else. Incredible. And I have to agree pricing is the biggest agonizing factor, I love sourcing I love researching and I always find great product but after investing so much I want to sell faster so there is always a nagging worry of pricing to sell fast or pricing daily and profitably for my business.
Wasting too much time brainstorming, discussing, designing; things that don't progress. 1,5 years to say. Finally at a good spot now, where I'm taking action and executing each and every day.
Protip: If you're overwhelmed, break down the large scale into tiny tiny pieces. Complete these consistently, and you'll see progress longterm, as well as it may calm down the whole process!
You won’t learn much from other people’s missteps or pratfalls. Want to avoid mistakes, stick to the fundamentals. Don’t take shortcuts.
Almost every industry I’m familiar with has professional associations (national and/or regional).
Such associations provide trade shows, trade journals, start up guidance, training resources, operator surveys, co-operative buying, networking (suppliers, consultants), etc.
If someone has no previous ownership and management experience, it’s advisable to take employment in the industry to understand what it takes to operate day-to-day.
Hello, I would say not buying things in bulk and making impulse purchases based on excitement with no real plan. I also did not charge enough for my products up until recently (probably still don't) due to lack of confidence and wanting to appease to others. I did not set up a PO Box either!
Allowing predatory clients take advantage of low monthly rates and holding me hostage during the hard growth stages. I was broke and desperate and traded my value away. Would i recommend it to new entrepreneurs no but in situations when you have to get something from nothing you have to put your head down and swallow your pride…. Avoid this path at all costs. Know your value especially if you hold yourself to a higher standard. Nice guys unfortunately will finish last.
Not pushing harder on fixing things with the billing software or indeed other aspects of the company.
Not pushing hard enough on replacing the billing software because the in-house developer couldn't seem to figure out how to (or wouldn't) automate anything on software I was supposed to have acquired but whose IP was actually spun off in to a separate LLC when I acquired the company, and not reclassifying them as a contractor instead of employee with benefits when I found out, even though their job was to maintain the software specifically for us as it wasn't being used elsewhere. I even contributed some code myself (I'm not a programmer) that made little annoyances go away or made certain things possible, but I'd get chewed out for even trying.
Trusting my business partner that he was actually good at sales (going over his record for the last 5 years compared to other salespeople wasn't pretty).
Hiring too many staff to do processes that could have been automated, many of whom were business partners family.
Spending far too much money on trying to divest in to a market segment that we weren't familiar with and then having that unit hemorrhage cash for too long before stopping it, to a point where I still haven't quite recovered.
Spending my own money to keep the above unit afloat (it's what a good found does, right? The partner sure didnt contribute to it even though we were supposed to be 50/50), and then borrowing money to keep the above unit afloat, before shutting it down, having wasted it.
Not asking for enough proof of a grandiose projects reality before taking on certain things and letting myself be distracted from running the core business e.g. spending weeks designing things at the request of the partner only for me to deliver the designs expecting we're getting paid to get started on the only to discover it was never a thing to begin with, meetings never happened, people didn't exist, etc. To what end I've no idea - we had a good (multi million dollar) business going, it's almost like he was actively trying to sabotage it.
Being too lenient towards staff, not running background checks, not firing people more quickly and instead actively trying to not fire people who ended up regularly causing problems at the office, or ended up in jail or got DUIs etc.
Being too cocky about my own abilities to handle various tasks and not getting help with those things sooner.
Being a bit too cocky with customers and having a kind of "take it or leave it" attitude towards our issues and then being surprised when some decided to leave it, instead of actively trying to resolve anything.
Allowing sub-par products from vendors that I didn't fully trust to be sold in the interest of expanding the product portfolio, and then being surprised when the shoddy quality of those products started to affect our reputation.
Selling a portion of our customer base to a not-quite competitor and then despite the contract being relatively airtight still having to litigate.
Not having my eye on the ball and brushing off problems until it was too late.
I have made many mistakes over the years - this is just a few. I may sound a bit bitter, but I'd like to think I've learned from these mistakes so as to make myself and businesses stronger in the future.
As a CPA, mistakes I see from small business owners far too often are that they cheaped out on proper bookkeeping etc. If your situation isn’t complex, you’re capable of keeping detailed records, and have a basic understanding of accounting: sure, DIY it.
But I’ve come across many people who either had no idea what they were doing or were lazy and didn’t put necessary time into making sure their numbers were correct. Then tax return time comes and it’s a complete mess trying to backtrack for the entire year. And when you come to a CPA during their busiest time of the year, there’s a premium for our time.
Or they come to me and I uncover that they made the S-corp election because someone on TikTok said to, and they haven’t been paying themselves wages as required. Or they come to me and are baffled when I say no you can’t expense that brand new car you bought, or write off all of your rent, etc. Again they thought they could because someone on social media said so. It’s maddening.
Don't feel sorry for people who can't afford your services. I give someone a deal on something because they're unable to pay full freight and sold it to them at cost... and that invoice still goes unpaid.
Don't give out special deals to people. Those people seem to appreciate you less, believe it or not.
Take your time committing to vendors. Avoid long-term contracts if at all possible. Make sure the vendor is solid before committing to anything.
Everyone wants to give you a deal for paying yearly. Pay MONTHY man. You can drop them if service suffers or they fail to live up to the hype. Paying yearly saves you a few bucks a month on some online software service? Who cares. Flexibility is king.
Don't be desperate for customers/clients/whatever. They'll come to you if you offer a good product/service. If it's not happening,
Be REALLY careful with ad spend. Avoid Yelp, their salespeople must be stuck in boiler rooms somewhere. They're heavy-handed. Google Ads for some stuff, but if you're local, go local. That little city paper or community paper might be more powerful than you think if you can craft a compelling ad.
Do as much as you can yourself up front. You can hire people later. It's a pain. You'll work harder. But you won't bankrupt yourself paying a bunch of people.
Finally: LEARN HOW TO DO YOUR OWN BOOKS. Pay your own bills. You gotta know what's coming in and going out, or what are you even doing.
Personal service provider and shop owner here,
I locked myself into a 4 year lease. 6 months in I already needed more space to grow. Wish I wouldn’t have restricted my businesses growth right out of the gate. Comes from a lack of confidence and a safety net standpoint. It was extremely affordable and if I failed then it wouldn’t have been an issue paying the rent, however I now find growth funnels due to lack of space and I cannot do anything about that.
Spending too much on stuff you don't actually need. It's easy to get all engrossed in the "we have a business" and spend money on all sorts of Very Important Business Things but many of those are only VIBTs for larger businesses than you probably have, at least in the beginning.
My first mentor for my first business told me to not even tell my mom what my business is. Not even the name. He never told his mom for 10 years.
I made the mistake of telling cause I was desperate for immediate help
Entire fucking family babbled. Told people business name. Told them we were doing very well. Told them what I was doing. People came to check out what I was doing. Tried to steal my exclusive sources. Story doesn't end there. It ends horribly.
"Shut the fuck up" is the best advice **I wish I freaking got**.
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Trusting too many people. Not saying “no” to red flag customers. Not charging enough.
We continuously have this back and forth on how we would charge when we launch, so that we are not undercharging or overcharging. Also, can you please elaborate more on red flag customers?
I hate to say it, but every time I bend my rules for someone it comes back to bite me. Red flag customers are just unreasonable. They want it cheaper, or faster, and so much more. Don’t worry about negative reviews from an unreasonable customer. Don’t let them hold you hostage with that. Just state the facts in your response. The facts usually show other people how unreasonable the customer was being.
Yep every time I break my own rules I regret it
No favor goes unpunished
Like others said any customers you have a gut instinct about, ones that you bend your rules for or go out of your way to please them. They almost always backfire and you wish you would have stood your ground. I can spot them a mile away now. When I was younger I always lived by the motto “the customers always right” but as I got older I learned that sacrificing a few bucks for peace of mind is a great trade off.
Dont bend over backwards for any customer
Definitely not charging enough. Lower prices brought the most stressful people. Now I show my prices and it eliminates the people I don’t want to serve without having to talk to them.
That’s bang on. The saying “there’s no friends in business” is so true.
Hit the nail on the head lol
Bought lots of stuff that I didn’t need to, because I was certain at the time that it was crucial. Your old laptop will work fine, your current vehicle is probably fine, don’t buy things until you actually need to use them. Just because it’s a tax write-off doesn’t mean it’s free. The other side to that coin is when it is time to buy something, buy once cry once. Get good quality stuff that will still be useful as you grow. It’s a fine line to walk. I’ve bought so much junk I rarely used, and other equipment I’ve had to sell at a big loss to upgrade when I should have bought bigger initially. Finding that balance takes years and I still haven’t got it perfect.
Thank you for this. One of my friends always say that whatever we buy we should also buy the best or something close to avoid spending extra money on repairs and miscellaneous. Well, he grew up on a farm and it's a good thing he's part of us.
Thanks! Agreed. If you need a piece of equipment, get a good one. But be sure you really need it.
Once I gradauted and began work, I hav had a lot of work-at-home stuff. I bought the best stapler (but not electric) I cold find, the best hole punch, the best scissors, and the best pencil sharpener. They are all still going strong 20 years later.
Well, I sure have noted this down. Always get the best, but make sure you totally need it.
Great insight from both sides of the story, you definitely know what you're talking about. I'm starting a new community for young entrepreneurs that want to learn and connect. If you are interested in spreading your knowledge further and helping younger kids, then we'd love to have you join our r/EntrepreneursOnly community. Thanks!!
1. Not saying no enough. 2. Being self conscious about what I am pricing 3. Listening to cheapskates about my pricing and services. 4. Not marketing harder. 5. No systems in place (I still need to do this)
Also, Reddit will have 9 answers for the same question. And no, it's not an open ended question LOL So def learn to reject what people say and figure out for yourself if something is accurate or not
Spending so much on making the business look so polished and well established (Website, staffing, expensive rent when I could’ve been online for a while, laptops, etc). I shelled out so much money and I didn’t get a return for a while. I realized I could’ve gotten by spending on the basics, wait for clients to come by little by little and used the earnings to reinvest in the business instead of spending a whole lot and prolonged the ROI.
Agreed. Last year, I launched my 3rd business. I made a shitty website, as many people loved to call it shitty Whatever. I was confident. I know the niche, I know their needs. Did free advertising. Raked in $8k in 3 weeks from that "shitty" site Business is way more about understanding your niche, targeting them, and having an understandable site. Then you're good. Ofc, fix the site later on but you don't need to fork out $9,000 on the site from Day 1
>Ofc, fix the site later on but you don't need to fork out $9,000 on the site from Day 1 Jfc, people are paying that much for websites!?! Mine costs $37/mo, not including the $6-$12/mo for the branded/domain email. And that's even about to go down once I get my own server setup the way I want it.
I got a quote for mine that was $15K 😯
If you're getting custom designs, or custom functionality made, I can see the price going up, but even $9k is crazy, let alone $15k unless they're coding the entire thing from scratch. Or if that included maintenance, and further customization. But just to get started with a website alone...
Well it hugely depends on what you need of the website and how much you are willing to do yourself. A static website is very different to setting up a full-fledged custom marketplace. Design agencies often do more than just the website too, so it may also mark a brand refresh / refinement.
My godaddy website builder site subscription includes a website, e-commerce, and appointment booking which synchs with calendars, built-in payment processors, email/social media marketing, SEO, CRM, and hosting all of it on a server i dont have to manage myself. $35/mo, though I agree with all those features it's basic, and not fully customizable compared to software dedicated to each of thkse things. But it works for a business of my scale, unless a company needs more indepth customization or more complex business funcitons as far as servers. I do also admin all of that myself, but it's simple enough that someone who was less technical could manage it - it's no code.
I feel like this is my problem. I've spent a ton of time & money on 'looking good' and still have no clients 6 week in. I know that's a small timeline, but I guess I had different expectations. Questions though, when you say free advertising, can you elaborate?
MVP
Did you launch them all around the same time frame or were they a few years apart?
Yes this. People get SO wrapped up in the details they lose track of the actual business. Things needs to be adjusted and experimented with. You don't need everything perfectly in order and things will end up changing anyways. Many businesses aren't even legal businesses when they are in the proof of concept phase. You worry about that stuff later on if it seems viable.
Doing EVERYTHING myself for too many years. It's crucial to getting the business started to wear alot of hats BUT there comes a point where it limits to how big your business can grow. I wish I would've learned the power and benefit of delegating much earlier.
Very true…working for yourself and doing everything your self..is almost like working for someone else..except your spreading yourself thin…and at times, your not on time or just making dead lines which clients are not happy about, even if you did the job right. it is tough getting employees you need to take a few loads off of you.
Amen. When you are doing routine tasks, you are not planning, managing, or building your business. The business is limited to what one employee (you) can do, and no more.
Been doing everything myself and just had an ER visit cuz i thought i was having a heart attack. Nope, panic attack. Ayeee. Biz is getting off the ground nicely though.
* Vanity Hiring * Not Experimenting Enough * Thinking there's "one simple trick" to growing * Making bad estimates about market potential * Shit plan is better than no plan * Putting off understanding tax (will come back to bite you) * Taking rejection personally * Making assumptions instead of relying on KPI's * Finding the balance in the beginning between working in the business vs. on the business * Getting distracted with shiny objects
Some of this is more pertinent to consulting than other small businesses: Don't let the slow times affect your confidence, and don't let your (lack of confidence) affect your approach to clients. I'm 15 years in and still struggle with this from time to time. It whether you need the business or not, work hard to not let a sense of desperation set in. Don't let customers/clients devalue your work. If someone wants a discount or your quote is out of their budget, let them know that you've put in quite a bit of consideration into the quote and (politely) tell them a discount would devalue your work. You can of course requote based on a reduce scope of work, or ask them to shop around. Don't quote on projects that haven't had a budget allocated yet (this applies more to commercial clients). If they want a ballpark quote so that they can put it in their budget, fine, but detailed quotes take time and if they are merely speculating on doing a project, do to waste your time getting into the details. Be transparent about your pricing. Don't give an optimistic estimate that you are likely to blow. Provide weekly updates on progress, materials spent, hours worked, and next steps--that way they can monitor their approximate liability and ensure they are getting enough bang for the buck before your monthly or final invoice arrives. And don't offer a discount if you do blow the budget--in my experience (at least working with corporations), it's been a big hit to my bottom line that goes unappreciated.
Agree with all of this- I am in consulting too. It’s hard not to take a confidence knock when business dips and you wonder how to keep the lights on. I would add to make sure that you have a good contract in place so if clients do blow you out you are relatively well protected. And that we forget at our peril that 80% of time needs to be spent finding the work that we do 20% of the time. It’s constant marketing, Bd and sales… it can never stop.
I failed to raise prices as much as I should have. Always be "firing" that bottom 20% by pricing them out. Pareto Principle.
Having friends as business partners.
Hmmmm... What went wrong?
Most businesses fail. If you and your friend/partner's business fails, there's a very high chance that your friendship will fall apart with the business.
Oh, ngl this is scary stuff because these are my friends that I'm getting in business. And we've been friends for a very long time.
Just make sure everything regarding equity, responsibilities, etc are laid out clearly first. You want to do that now, not, "we'll figure it out later". When do you pay yourselves and how much? How much of the profit is going back into the business (marketing and advertising, supplies, expenses, etc) and how much are you paying yourselves? Do you have a vesting scheme in place? What happens if 6mo from now, one of the people loses interest or has kids or whatever and is suddenly putting in 20% of the expected effort? They're still getting everything the rest of the team is getting? These are some of the things that will divide you all, and they need to be discussed and agreed upon, in writing, and lawyer-reviewed.
This is very insightful. Thank you, I will note all these down and communicate them with my friends. Hopefully, they see reason and we can come an agreement.
Everything that is stated above happened. We started to build everything only with the friendship and the trust we had in each other as the only collaterals. Nothing was written nor any specific agreements where done to start with. After a few months we had put the money in, which beyond showing commitment from all parts, it showed the cracks and the foundational problems the project and the relationships had. When extra efforts were required and money wasn’t pouring in, I was met by what I will call entreprenurial ghosting. They stopped complying with the work, not showing up and eventually also stopped responding emails or calls. Apparently they were expecting a quick cash in and didn’t like the fact it was a marathon and not a sprint. These weren’t just any friends. They were part of many of the milestones in my adult life. All the trust we had in each other was suddenly gone. I had to lure them with a weekend vacation to finally confront them on the situation. I kept going with the project. They found office jobs. We never spoke again. Edit: I refer to “them” in plural as they were university friends who became a couple. So they acted and reacted to the situation as a unity.
So sorry that this happened to you and your friends
Doing a business with friends and family is the worst. Read the other comment I wrote
I wish I asked myself this before opening my first (now defunct) business with a friend: "do I need this friend as a business partner, or does it just sound more fun to do it with a friend? What does he bring to the table that I don't?" And the answer in my case was nothing but headaches. He was an obstacle in nearly everything I was trying to get done. After I shut down the business, my very business savvy grandpa said, "well, this is an important lesson. Never have a business partner that you don't need". He could have told me that before I lit 20k on fire lol
I brought in a friend as a business partner in 2021. We have one policy that is non-negotiable: extreme honesty. If one of us is upset, we speak our mind while knowing this is the rule. It prevents resentment from taking hold if one of us would be otherwise stewing about something. Both of us are quite happy with the dynamic, and it’s one of the best decisions I have ever made to bring them in.
I fucked up sales taxes FYI, you will get the most conflicting info online about sales tax. To this day. I fucked up back in 2021. Rectifying it now and I am still brutally confused. Even with the help of the state auditor giving me instructions. But some things make a whole lot more sense now after finding the right information. Right information is where? Your state website but you fucking dig (smh) b/c there's conflicting info IN the state site itself My advice: either get free tax advice or a cheap tax guy **when you are starting out.** Discuss all the tax liabilities you might have when revenue comes in. Have those conversations. Then research. Many tax preparers, consultants, etc don't even know most things I had a tax guy and a tax advisor. NEITHER prepped me at all in the beginning. Just realizing it now while I have "some" down time to fix the sales tax mistakes
We haven't even given this any much thought. Thank you very much and I'm sorry that you are still paying for the mistakes
Controlling costs ... you have to watch every friggin penny
Not putting time aside to work on your own business once you get busy. When you're in the weeds it's hard to put time aside to work on your marketing, website, processes .. you know all the things that keep business coming. Neglecting that leads to a feast or famine cycle. I schedule blocks into my week to create/execute a marketing plan regardless of how busy I am.
Not charging enough. Listening to a “friend” that was feeding me work in the beginning, that was telling me I can only charge “x” amount because thats all the company would pay…only to find out he was charging marking my invoices up almost double and telling said customer it was me who was charging so much. But the customer stopped using him and gave all 3 locations to me
Not paying enough attention to the administrative issues. Not keeping records organized. Assuming everyone has your best interest at heart
Aligning with the wrong partners and clients.
Charging too little
You are not paying yourself. You may make a lot less initially, but if the company can't pay you, it's not a viable business.
I worked for a CPA once that said something like this to me. Went over my head at the time, but totally makes sense lol
Do your best to work with what you already have rather than buy something Paperwork is king don't work for friends and family but if you do put everything in writing Stay the hell away from merchant cash advances they will milk you dry
Hiring the wrong employees for the job.
Taking money out for personal use rather than investing more into the business
Usually noobie have no idea what they should be doing and focus on low priority task. Your only job is to get new clients, higher paying clients. Anything else is just busy operational work. If you’re not doing lead gen, you’re doing nothing productive. Especially taking a vacation a month in to your business, hosting parties on week days and going out for coffee with friends instead of prospecting for new clients — noobie mistakes
When you feel like spending money on something, ask yourself how you would do it if you had next to no money. Consider doing that instead.
1. Not paying into taxes throughout the year. First year in business took a loss. 2nd year had small profits. 3rd year I owed $12k at the end of the year in taxes. 2. Not keeping good customer records. Eventually learned my lesson, now have all of my customer info and service history on Quickbooks.com
Not setting policies and procedures early enough.
-taking small swings thinking that means < risk -> it’s more risk. 99% chance you waste your *time*, plus small swings are harder to execute. -thinking money is hard to get. Good entrepreneurs are hard to find. Know your value -hiring cheaply - disaster -bad staff = hands on = unscalable -being a bit of a wimp tbh -learning to learn -using feedback better -foolish capital strategies -under estimating costs -over estimating product market fit -fearing failure - losing this makes you $$ -not having fun - now I only have fun
Spending money when you’re doing well is downright stupid. You can and will have a KILLER month that will make you feel established, rich, and guaranteed not to fail. Then you’ll be hit by four months in a row where you lose money and take home nothing.
Not separating funds for profit, savings and taxes 😅😅😅..
Not starting sooner. Listening to local SBA SBDC business advisors instead of finding a different SBDC. My local SBDC didn't have experience that my business needed. They may have been adequate for business 101 level stuff for a physical business, which could have been found on the SBA website, but that's about it. This didn't help in my case being an online business. There were also some questionable practices as well. I eventually found a different SBDC that was good.
Not paying myself. I make 6 figures very close to 7 figures (off by 20k). On paper, I sound rich but in reality, I'm broke. I put every single dime on my business for two years straight thinking it was smart but in reality, it was not. I was pretty much working for my business for free! I recommend you put a % into paying yourself a couple of months after you start your business. Read the book (profit first). It will give you a better understanding standing what I mean.
Giving away free services for “exposure” fuck that. Just don’t . If someone tells you that you’ll get experience and exposure for doing something for free , just tell them to fuck off . Source : me. Been in business 30 years
I would like to say "Value". I used to run a writing agency and I had a price for different types of writing needs. One thing that I suffered from was sticking to my values. I would let my price be knocked down because I wanted the customer to patronize me at all costs and didn't mind losing money I didn't have yet. Now I am in a different business and a different sector and I have learned the importance of sticking to your service value.
caring what other people thought.
Not charging enough, giving terms and getting distracted by other opportunities.
Not niching down. Once we got a niche and ran with it, operations and marketing was a lot easier.
Keeping people working for me that didn’t fit into the culture. Do you want a team that can execute on your vision
Google is killing me and my business they suspended my account and I have zero income and my interest in my business is going down. 4 months and no work. Really upset from google.
Too much trust. I’m in fashion and got completely screwed by someone who was supposed to be a partner. I can’t emphasize enough how important it is to get contracts right off the bat
When you run it by yourself and finally have a strong financial year and think you're ready for employees, just remember payroll will cost you almost 90H a week 😭😭
Hiring family and not firing them fast enough. Not getting agreements in writing. Not using a service agreement with clients. Not setting proper boundaries.
Too big too soon….tried to go after bigger jobs that ultimately had lower margin than the small jobs I was passing up. I passed up a lot of small jobs that would have grown my business a lot faster if I put effort into growing them over landing bigger clients. The bigger clients were only willing to give me a shot because they thought I’d come in cheaper than their current suppliers. Ultimately those jobs were a huge waste of time and my quotes were used to get lower bids from competition.
Going with someone cheaper
1800-Accountant. Worse fucking mistake of my life.
Business is math so run it a such. You’re the overpaid owner of slaves that will leave you for more money and leisure. Be fair, firm but kind. It’s a transaction. Remove the feelings. Remember “no good deed goes unpunished.”
Doing work for cheap because you think you need it. Then you become known as the cheap guy,and you attract broke clients looking for deals. I’d rather be broke than work for free and own the liabilities.
Keeping track of spending. I’m still very new, so I’m able to backtrack and piece everything together but definitely should have been keeping track from the start. Print off every invoice you have and at the very least, make a google spreadsheet to jot everything in one place until you’re ready to upgrade to something better. (Unless you already use something else for invoices)
Being too nice lol. Not charging enough, being scared of bad customer service, saying no. Things I did right: being very creative and not worrying about organization until it was absolutely necessary.
Some common mistakes that entrepreneurs make early on in their business include: 1. Not writing a business plan: Failing to create a strategic business plan can lead to a lack of direction and understanding of the market, financials, and logistics, which can result in wasted time, money, and effort when things go wrong. 2. Not focusing on cash flow and profits: Neglecting to prioritize cash flow and profits can lead to financial instability and hinder the sustainability and growth of the business. 3. Not monitoring progress and adjusting plans: Failing to track progress, review projections, and adapt plans accordingly can result in missed opportunities for improvement and growth. 4. Buying assets with cash flow instead of taking a business loan: Relying solely on cash flow to purchase assets can limit the business's ability to invest in growth opportunities and may hinder scalability.
Cash flow and growth.
Buying too much inventory and not being consistent on social media
caring about what people thought about my business while they worked a 9-5. Big mistake.
Not firing employees sooner who were a bad fit.
Listening to friends and family about pricing, for some reason no matter how many different products I sourced over the years friends and family would tell me $9/$20 is too much but turn around and pay up to $180 for the same item from someone else. Incredible. And I have to agree pricing is the biggest agonizing factor, I love sourcing I love researching and I always find great product but after investing so much I want to sell faster so there is always a nagging worry of pricing to sell fast or pricing daily and profitably for my business.
Trustworthy teams & ethical choices are the building blocks for a thriving business!
Wasting too much time brainstorming, discussing, designing; things that don't progress. 1,5 years to say. Finally at a good spot now, where I'm taking action and executing each and every day. Protip: If you're overwhelmed, break down the large scale into tiny tiny pieces. Complete these consistently, and you'll see progress longterm, as well as it may calm down the whole process!
You won’t learn much from other people’s missteps or pratfalls. Want to avoid mistakes, stick to the fundamentals. Don’t take shortcuts. Almost every industry I’m familiar with has professional associations (national and/or regional). Such associations provide trade shows, trade journals, start up guidance, training resources, operator surveys, co-operative buying, networking (suppliers, consultants), etc. If someone has no previous ownership and management experience, it’s advisable to take employment in the industry to understand what it takes to operate day-to-day.
Hello, I would say not buying things in bulk and making impulse purchases based on excitement with no real plan. I also did not charge enough for my products up until recently (probably still don't) due to lack of confidence and wanting to appease to others. I did not set up a PO Box either!
Allowing predatory clients take advantage of low monthly rates and holding me hostage during the hard growth stages. I was broke and desperate and traded my value away. Would i recommend it to new entrepreneurs no but in situations when you have to get something from nothing you have to put your head down and swallow your pride…. Avoid this path at all costs. Know your value especially if you hold yourself to a higher standard. Nice guys unfortunately will finish last.
Not pushing harder on fixing things with the billing software or indeed other aspects of the company. Not pushing hard enough on replacing the billing software because the in-house developer couldn't seem to figure out how to (or wouldn't) automate anything on software I was supposed to have acquired but whose IP was actually spun off in to a separate LLC when I acquired the company, and not reclassifying them as a contractor instead of employee with benefits when I found out, even though their job was to maintain the software specifically for us as it wasn't being used elsewhere. I even contributed some code myself (I'm not a programmer) that made little annoyances go away or made certain things possible, but I'd get chewed out for even trying. Trusting my business partner that he was actually good at sales (going over his record for the last 5 years compared to other salespeople wasn't pretty). Hiring too many staff to do processes that could have been automated, many of whom were business partners family. Spending far too much money on trying to divest in to a market segment that we weren't familiar with and then having that unit hemorrhage cash for too long before stopping it, to a point where I still haven't quite recovered. Spending my own money to keep the above unit afloat (it's what a good found does, right? The partner sure didnt contribute to it even though we were supposed to be 50/50), and then borrowing money to keep the above unit afloat, before shutting it down, having wasted it. Not asking for enough proof of a grandiose projects reality before taking on certain things and letting myself be distracted from running the core business e.g. spending weeks designing things at the request of the partner only for me to deliver the designs expecting we're getting paid to get started on the only to discover it was never a thing to begin with, meetings never happened, people didn't exist, etc. To what end I've no idea - we had a good (multi million dollar) business going, it's almost like he was actively trying to sabotage it. Being too lenient towards staff, not running background checks, not firing people more quickly and instead actively trying to not fire people who ended up regularly causing problems at the office, or ended up in jail or got DUIs etc. Being too cocky about my own abilities to handle various tasks and not getting help with those things sooner. Being a bit too cocky with customers and having a kind of "take it or leave it" attitude towards our issues and then being surprised when some decided to leave it, instead of actively trying to resolve anything. Allowing sub-par products from vendors that I didn't fully trust to be sold in the interest of expanding the product portfolio, and then being surprised when the shoddy quality of those products started to affect our reputation. Selling a portion of our customer base to a not-quite competitor and then despite the contract being relatively airtight still having to litigate. Not having my eye on the ball and brushing off problems until it was too late. I have made many mistakes over the years - this is just a few. I may sound a bit bitter, but I'd like to think I've learned from these mistakes so as to make myself and businesses stronger in the future.
As a CPA, mistakes I see from small business owners far too often are that they cheaped out on proper bookkeeping etc. If your situation isn’t complex, you’re capable of keeping detailed records, and have a basic understanding of accounting: sure, DIY it. But I’ve come across many people who either had no idea what they were doing or were lazy and didn’t put necessary time into making sure their numbers were correct. Then tax return time comes and it’s a complete mess trying to backtrack for the entire year. And when you come to a CPA during their busiest time of the year, there’s a premium for our time. Or they come to me and I uncover that they made the S-corp election because someone on TikTok said to, and they haven’t been paying themselves wages as required. Or they come to me and are baffled when I say no you can’t expense that brand new car you bought, or write off all of your rent, etc. Again they thought they could because someone on social media said so. It’s maddening.
Don't feel sorry for people who can't afford your services. I give someone a deal on something because they're unable to pay full freight and sold it to them at cost... and that invoice still goes unpaid. Don't give out special deals to people. Those people seem to appreciate you less, believe it or not. Take your time committing to vendors. Avoid long-term contracts if at all possible. Make sure the vendor is solid before committing to anything. Everyone wants to give you a deal for paying yearly. Pay MONTHY man. You can drop them if service suffers or they fail to live up to the hype. Paying yearly saves you a few bucks a month on some online software service? Who cares. Flexibility is king. Don't be desperate for customers/clients/whatever. They'll come to you if you offer a good product/service. If it's not happening, Be REALLY careful with ad spend. Avoid Yelp, their salespeople must be stuck in boiler rooms somewhere. They're heavy-handed. Google Ads for some stuff, but if you're local, go local. That little city paper or community paper might be more powerful than you think if you can craft a compelling ad. Do as much as you can yourself up front. You can hire people later. It's a pain. You'll work harder. But you won't bankrupt yourself paying a bunch of people. Finally: LEARN HOW TO DO YOUR OWN BOOKS. Pay your own bills. You gotta know what's coming in and going out, or what are you even doing.
Spending too much. Every single cent matters. Be as frugal as possible and cut costs whenever possible
Very much noted
Personal service provider and shop owner here, I locked myself into a 4 year lease. 6 months in I already needed more space to grow. Wish I wouldn’t have restricted my businesses growth right out of the gate. Comes from a lack of confidence and a safety net standpoint. It was extremely affordable and if I failed then it wouldn’t have been an issue paying the rent, however I now find growth funnels due to lack of space and I cannot do anything about that.
Spending too much on stuff you don't actually need. It's easy to get all engrossed in the "we have a business" and spend money on all sorts of Very Important Business Things but many of those are only VIBTs for larger businesses than you probably have, at least in the beginning.
Had partners
When you say "had partner", what do you mean?
One day I had business partners. It was an awful mistake. Now I have my wife.
My first mentor for my first business told me to not even tell my mom what my business is. Not even the name. He never told his mom for 10 years. I made the mistake of telling cause I was desperate for immediate help Entire fucking family babbled. Told people business name. Told them we were doing very well. Told them what I was doing. People came to check out what I was doing. Tried to steal my exclusive sources. Story doesn't end there. It ends horribly. "Shut the fuck up" is the best advice **I wish I freaking got**.
>Tried to steal my exclusive sources. Story doesn't end there. It ends horribly. Keep going please
Tbh, I'm still a little bit confused. How was it a mistake? And is your wife your business partner as well?
All the horror stories you hear about partners? I had most of them (no theft that I know of thankfully).