Business Mistakes: 5 issues that sunk my plans
Some of my long time readers may remember when I started Duchess and Duke. At that time, I wanted to make and sell bath products online. While I did succeed in learning how to make an amazing bar of soap, I quickly ran out of time, energy, and money to keep it afloat. Here are a handful of the mistakes I made:
1: Trying to do too much
There are reasons why manufacturers and retailers are generally not the same entity. It take a lot of time, energy, equipment, and manpower to manufacture something, and these business operations are completely different than retail. In the future, I’m going to focus solely on retail. Manufacturing is almost impossible to do as a one or two man operation. Whatever it is that you do, stick to it, and don’t try to branch out too far or it could crush you before you even get going.
2: Trying to wear too many hats:
This goes hand in hand with trying to retail the same stuff I’m manufacturing. Trying to be your own accountant, legal expert, tax preparer, IT professional, laborer and boss was way too difficult. I didn’t know enough about these things at first and it took me a long time to really understand how to go about doing certain things and who to turn to when I needed help.
3: Not having access to credit
Opening a new business requires access to capital. Unless you’ve got 10-20k in savings that you can use, you need to have a line of credit. If your credit isn’t very good then this is going to put you in a tight spot. I meet a lot of people that think they can start fresh by opening a corporation, but the truth is any bank is going to require a personal guarantee to fund any loan for your business. Fix your credit and establish open lines of credit (credit cards, home equity line of credit, unsecured personal loans).
The hardest thing to find is start up financing , since most banks only want to invest in businesses that have a solid track record of earning money. This means that you should get credit while you have a day job and income and make sure you have these “wells” drilled and tapped before you actually need them. Realize, that you are putting your own personal credit on the line and make sure you don’t take poorly calculated risks.
So how do you fix your credit? I’ll be linking a guide to this here.
4: Not building a following before we launched
Getting people interested in your products and services is difficult in a time where the average consumer is completely inundated with advertising messages. The whole internet is screaming for people’s attention and unless you have an interesting one most people filter you out. To remedy this, I’ve started several blogs and stay active on social media to attract new and interested people.
A good example of this is what’s happening on Youtube. Michelle Phan made great content and attracted millions of followers before launching her cosmetics company “Em”, but she didn’t do it alone. She’s doing the help of L’Oreal, who is putting a lot of talent and money behind the brand. So how do you create engaging content? Look for a guide that will appear here.
5: Too Few Products
People are fickle, we really only had one product when we launched and that was soap. We had 4 varieties. This problem sealed our fate. We didn’t have a lot of traffic, didn’t have much for them to look at when they got there, couldn’t scale up production and still work our regular jobs, and didn’t have enough equipment, space, or ability to finance these, to fix the problems. The website and the merchant services were running us $120 a month and after a few months of this I realized that I needed to nuke the whole thing and start over.
Look for new material coming soon by following me on twitter and bookmarking this site.