3 Business Lessons You Don't Want to Learn the Hard Way
Entrepreneur's New Year’s Guide
As I am writing this article, I have been on this earth for 35-plus years. In that time, I have been self-employed full-time for 14-plus years -- or 40 percent of my life. I have also owned a number of businesses and learned a few valuable lessons (most of them the hard way), and I wanted to share three of the most valuable lessons with you.
Lesson 1: It's not all about the money.
Around 2004, I bought a franchise called Bevinco. At the time, I was looking to make an “investment” in another business, as I was rather bored with the business I had. Bevinco has a noble business model; they help restaurants and bars inventory their liquor, beer, and wine. The company can pinpoint people who are over pouring, giving away drinks to friends, and even outright stealing.
Personally, I have very little interest in alcohol other than having a margarita from time to time, but as an entrepreneur, I could see the benefit of this service. What business owner wouldn’t want to make their bar more profitable and stop waste and theft? I could almost taste the profits flowing my way. So with little interest in the industry and even the business in general, I decided it would be best to spend $55,000 dollars spread across three zero-percent-interest Discover cards (you have to love the age of cheap and easy money) and buy this franchise solely based on the notion that I would make loads of money.
Two days into my two weeks of training, I realized I had made a MASSIVE mistake and that this business wasn’t for me. I struggled daily to perform the minimum functions required to keep the business running, and after six months of doing something I hated, I put the company up for sale. Shortly thereafter, I just barely got my investment back out of the business — which was nothing short of a financial miracle at the time. In the end, I learned a valuable lesson; when starting a business, it can NOT be solely about the money. Few people can be successful when that is the sole motivation.
Lesson 2: To get big, you must be a good pointer.
My company, The Newsletter Pro, is in a hyper growth stage right now. As an entrepreneur, I want to be involved in everything that goes on in the business, but at our size, that simply isn’t possible. Although it has taken longer than many on my team would have liked, I have finally gotten comfortable with -- and even good at -- simply pointing, giving simple instructions and letting my talented staff take over from there. If you want massive growth, you CANNOT micromanage everything.
The idea of delegating (pointing) is not new of course, but I had such a hard time doing it in the beginning. In retrospect, one of the main reasons it was so difficult is that I haven’t always employed only “A” players. In the past, when I have employed “B” players, they often let me down. So I felt and even said from time to time, “No one can do it as good as I can do it.” I know that thought process is common for many entrepreneurs. I continued to feel that way right up until the point when I got an “A” player or two, and then I quickly realized not only can the “A” players do “it” as good as I can, they are actually better than me. At the end of the day, I enjoy doing and I’m very good at a few things; when I focus on those few things I both enjoy and I’m good at, and then delegate the rest, we, as a company, are more successful.
Lesson 3: Retention makes everything else easier.
Most businesses focus only on getting new customers. Nearly all of their marketing money and efforts are firmly placed in the getting-new-customers bucket — which leaves just over ZERO dollars to focus on retention. Since my second full-time business, I have been heavily focused on customer retention as I quickly realized it is easier to grow your business, and grow it quickly, when you don’t have customers jumping ship all of the time. Plus, study after study has shown that repeat customers spend more money, more often, and are easier to sell additional products and services to.
The above lessons are not rocket science. But they are lessons I had to learn the hard way, and working with as many entrepreneurs as I do, I see others still making these same mistakes. I hope that you can learn from my experience and save yourself some time and heartache.