3 Entrepreneurial Lessons You'll Never Learn In Business School
When it comes to business, there are some lessons you simply cannot learn from a textbook.
You can prepare day and night, but certain things can only be learned from firsthand experience. Some are learned the hard way, but any challenge is an opportunity to refine your practices and develop operational systems that set your brand up for greater success in the years to come. Likewise, hurdles are opportunities to learn more about your customers and how to better please them in the future.
Here are three lessons I learned firsthand that have helped me succeed as the leader of a successful and growing business:
1. Your company is more than its products and services.
No matter your industry, the products and services you sell often take on a life of their own. While we fulfill ecommerce orders at Dotcom Distribution, we’re also fulfilling customer hopes, wants and desires. Shoppers buy because their orders make them feel a certain way. How efficiently and in what condition packages arrive play a major role in the overarching customer experience and satisfaction.
This notion was no clearer than when I worked at GoodTimes Home Video where we fulfilled Richard Simmons’ direct-to-consumer products. For people ordering workout tapes, it wasn’t just about receiving a package quickly. The arrival of our packages was the solution to underlying struggles like weight loss and personal health. Our job went far beyond logistics and profits. This is a lesson I keep with me today. It’s critical to your customer retention rates and long-term growth to develop practices and operations with this larger sense of customer needs in mind.
2. Sophistication does not always translate to performance.
Having worked with companies of all shapes and sizes, I’ve learned no brand is safe from error. Even global, high-end brands with multiple locations and advanced direct-to-consumer capabilities can struggle to stay on top of their operations.
Every company brings with it a unique set of challenges, and sometimes the most successful brands have the biggest struggles to overcome. A brand’s stature cannot predict its performance, and our secret sauce to navigate these unforeseen challenges is consistent communication and collaboration. Likewise, no company, no matter its prestige, is too great for a bit of hand holding in business areas of struggle. As you adapt to problems and get through them with the guidance of others, you can streamline your processes to operate more effectively in the future.
3. Businesses are people, too.
Businesses have human tendencies that can be detrimental to an emerging brand’s ability to effectively manage inventory. As the owner of an ecommerce company, I can best explain this through the lense of moving inventory. When organizing SKUs and expanding product lines, companies often fall trap to the human tendencies of fear, hoarding and disorganization:
Fear -- Many opportunities exist to liquidate slow-moving inventory, but fear can get in the way and handcuff even the most successful companies. Despite the benefits of clean inventory management, businesses -- just like people -- are scared to admit mistakes.
This is particularly true for inventory management, where admitting error means taking financial responsibility. If you have $1 million worth of inventory on the books and 20 percent goes obsolete, someone has to admit to the CFO that accounting reserves will be impacted with a marked profit and loss impact. However, avoiding problems due to fear never solves anything -- it only delays and escalates issues.
Hoarding -- Like people, businesses having trouble letting go. While there are no fees for the space in your closet, the storage fees paid on slow-moving or outdated inventory are immense for retailers. Brands cannot afford to hoard unsellable inventory simply for the sake of keeping it. The financial repercussions of this habit are entirely too grandiose when warehouses are at play.
Disorganization -- Inventory management is particularly crucial when moving, whether that be to a storefront or to a new distribution center. When you move your home, imagine if you threw everything -- from your bathroom to your living room -- all in one box. Reorganizing your new house would be a mess. Now imagine doing this with several truckloads of inventory. It would be a complete disaster.
Likewise, while my dresser can be as haphazard as I want, a retailer's inventory must be logically organized with clearly defined attributes. Simply listing a product as a "medium white shirt" is not a thorough enough organizational system to manage multiple SKUs and thousands of orders.
Process control and complete technological integration is the best way to overcome these error-prone business areas. When you can remove the manual nature -- and therefore the human participation -- from these business-critical operations, you can also avoid the human characteristics that can negatively impact your business’ growth.
The fulfillment industry is very familiar with unforeseen obstacles, as most of what we do daily is handle other people’s challenges. As we learn from bumps in the road, we earn invaluable experience, and prepare ourselves to succeed in the future. When running a business the old adage is true -- what doesn’t kill you makes you stronger. But often, learning what makes you stronger cannot be found in a book, it’s something that must be learned first hand.
Learn more firsthand lessons from successful ecommerce brands.