Business mistakes - what are/were yours

Business mistakes - what are/were yours

Author
Discussion

cadoganpier

37 posts

182 months

Thursday 18th February 2010
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Try and make sure all concerned parties have equal needs and wants and if not, clearly set out what you will be expecting. I was involved in a start up with a very wealthy guy and consequently when it came to bonus and dividend time we both had different ideas and needs, this was then used to leverage against me and soured the whole thing. Absolutely always put everything in writing at the start and before the business is worth anything, 50% of nothing is easier to negotiate than 50% of £1m.

Frimley111R

15,537 posts

233 months

Friday 30th July 2010
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Dick Dastardly said:
Mine were pretty common ones that I always hear other people say they made:

1. Not charging enough. Most small businesses lack the confidence to charge the rates they should.
That's my favourite nugget of advice on this thread. smile

Digga

40,206 posts

282 months

Friday 30th July 2010
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thegavster said:
Frimley111R said:
Dick Dastardly said:
Mine were pretty common ones that I always hear other people say they made:

1. Not charging enough. Most small businesses lack the confidence to charge the rates they should.
That's my favourite nugget of advice on this thread. smile
I'm realising this more and more as time goes on. Consistent, fair pricing is very important.
There is a corollary to this; if you cannot provide something - product or service - at the right price for the market AND make the right profit to prosper, your business plan is wrong.

V8mate

45,899 posts

188 months

Friday 30th July 2010
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Frimley111R said:
On 'Working Lunch' a successful entrepreneur said ‘If you make a mistake with a new member of staff rectify it quickly’. I’ve worked in too many companies who have made this mistake and the people are still there, being a PITA every day, for years, because the company didn’t get rid of them as soon as they realised that they had made a mistake. Its one of those things I never forgot because I see the results of not dealing with this every day!
Very much so. 'If you can't change the person, change the person'.

The smaller the company, the more crucial this is.

Super Slo Mo

5,368 posts

197 months

Friday 30th July 2010
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mathewb said:
7. Never work for/with friends or family.
I do just that, the business is co-owned by my brother and my mate (who I've known since 1992, we were at Uni together). To be fair, it works very well, although I do understand where you're coming from, I wouldn't work with my sister, for example. We'd kill each other pretty quickly.

Going a bit further back into the past:

1. Get Rich Quick schemes don't work. . It may sound obvious, but I spent my late teens/early twenties buying every darned book/scheme/system going (they weren't that expensive really). It was a good lesson in some ways, that is, there's no real shortcut to making money, other than hard work and application.

2. I'm not suited to being in Sales. Spent circa £20k on a leasing franchise, including running costs, to realise that my pragmatic, fault finding, enquisitive nature didn't lend itself well to encouraging people to buy what I was selling. Because I'm quite good at looking for problems, pulling ideas/proposals/concepts apart to find the faults (and thus rectify them), my approach to selling tended to be similar. Which doesn't work very well. I hated trying to be something I'm not naturally, so in the end I gave up.

The moral of point 2. is, you need to work to your strengths, but be realistic, if you're trying to fool yourself (and I'm the biggest fool of all), then it isn't going to go well. Partnering/employing people to do the stuff you can't is the way forward.

ben10

2,208 posts

174 months

Friday 30th July 2010
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V8mate said:
Frimley111R said:
On 'Working Lunch' a successful entrepreneur said ‘If you make a mistake with a new member of staff rectify it quickly’. I’ve worked in too many companies who have made this mistake and the people are still there, being a PITA every day, for years, because the company didn’t get rid of them as soon as they realised that they had made a mistake. Its one of those things I never forgot because I see the results of not dealing with this every day!
Very much so. 'If you can't change the person, change the person'.

The smaller the company, the more crucial this is.
+1

Also though, the smaller the company it is the easier it is to spot! - But also the harder it is to cope without someone (most of the time)

Frimley111R

15,537 posts

233 months

Monday 17th June 2013
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BUMP! I'd had this saved as a bookmark and just had a quick read through again. Thought it might be useful to bump it.

NorthDave

2,355 posts

231 months

Monday 17th June 2013
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The only thing I would add is never trust a customer to pay.

It doesn't matter how nice they are, how honest they have been in the past or how many times they ask - never extend credit for anything. The nicest and richest customers in the world can suddenly forget to pay.

We have a zero credit policy after being stung once.

DSLiverpool

14,670 posts

201 months

Monday 17th June 2013
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Take a fking risk now and again, sadly when my risk it for a biscuit opportunity came up I bottled it and regret it ever since.

Mudgey

682 posts

173 months

Monday 17th June 2013
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Get a good accountant from day one, I didn't and am now paying for it now due to bad advice & incorrect VAT & Tax submissions which were later discovered by my more competent accountants. Hopefully by the end of the year I can afford move up market from noodles to rice n veg smile

Edited by Mudgey on Monday 17th June 10:57

27021960

24 posts

129 months

Monday 17th June 2013
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When I started...
Buying 3 or 4 of a product at a time
Then buying 12 a time

Now I've realised you need 100+ of top selling products for business growth

therealpigdog

2,592 posts

196 months

Monday 17th June 2013
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Not taking holidays.

Just got back from a fortnight without phone/emails and I'm sure it's done both me and my business a world of good.

oldbanger

4,316 posts

237 months

Monday 17th June 2013
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Don't think that free mentions in the national press will suddenly get people through the door, especially if you don't bang the drum about it yourself. You need to be pretty relentless with marketing really.

Don't sell luxury goods on a volume model - could get the business to tick over but couldn't gets sales up enough for profit.

Don't let the business take 2nd fiddle - I had to get a job to pay the bills.

Murcielago_Boy

1,995 posts

238 months

Monday 17th June 2013
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This is a BRILLIANT thread.

My mistakes/advice (jeez, I'm in no way qualified to advise).

- You need to keep your foot to the neck of your business continuously. Take the pressure off and it'll go backwards. Take a holiday for SURE - you MUST - you'll come back refreshed and ready for combat, but coast for 6 months and your business will suffer for 2 years.

- As above - take a break when you can. It makes you a better businessman.

- Get rid of crap staff immediately. Trust your instinct. Fire them NOW.

- Know EXACTLY down to the damn penny, how much money you're making, who you owe, and what you are owed.. EVERYDAY.

- Leave plenty on the balance sheet. No need to spoon it all at once.

- Don't trust professional advisors - accountants, lawyers, corporate financiers, etc. They're rarely as clever as they think they are. Sure take their advice but YOU are the one responsible and once you've paid their invoice they don't give a fk about you. There'll be one smart cookie who's time you wont get (but will be billed for @£300 p/h) , the rest of the underlings which are doing you work are daft. I mean that seriously. Summed up by my dad to a previous accountant "your fking ACCA and Bond St location don't mean st to me when you can't tell me what's a balance sheet item and what's a p/l item."

- Don't trust suppliers to stick to agreements or terms. They'll screw you if they can.

- Don't trust customers to pay. They'll also screw you if they can.

- DON'T COUNT ON THE GOOD-NATURE OF ANYONE.
Harsh, I know but that's my view. This attitude meanss you're more likely to be pleasantly surprised than ripped off.


Edited by Murcielago_Boy on Monday 17th June 22:03

fellatthefirst

579 posts

154 months

Monday 17th June 2013
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I would echo the comments of above...very good advice!

skwdenyer

16,176 posts

239 months

Wednesday 19th June 2013
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Not negotiating everything. Professional advisors love to do things "the way they're always done", and hate to rock the boat. Leases, for example: everything is on the table. Fuel costs: after years of accepting what I was offered, I got a 5-year fix on gas prices in 2006, which British Gas tried hard to get out of in later years... Everybody can get the deals that everybody is offered; it is the last mile of negotiation that gets you a "win".

As others have said, not getting everything down in writing. I lost a lot of money to various government agencies before I realised that they would only, in extremis, be bound by their own written commitment.

Don't sell on price, sell value - it is what it is worth to your customer that matters, not what it costs you to do.

Exwife

167 posts

134 months

Thursday 20th June 2013
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Mistakes:

Cashflow - went from £100k t/o in March to £330k t/o in April. Celebrated with champagne, then the bills came in...

Scalability - senior staff are not necessarily entrepreneurial, it can take a very long time to coach even very committed and talented staff to do what you do.

Successes:

Staff - treat them as individuals and make a huge effort to understand their motivations. 24 yo, single chap, 3 weeks project in HK; time of his life a great job perk. 35 yo, married, 3 kids, working wife, 6 months in NY; not so good.

Profit - never, ever give clients something for nothing. If you don't value it, why should they? Staff are devalued if you give away their time and skills for free.


Frimley111R

15,537 posts

233 months

Thursday 31st October 2013
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Always worth a little 'bump'...

einsign

5,493 posts

245 months

Thursday 31st October 2013
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Never get 100% of anything manufactured by China.

petery

357 posts

209 months

Thursday 31st October 2013
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I'd say having friends as customers, not only does it make it difficult charging them the correct amount when it comes to invoicing them, but when they don't pay and you have to send reminders its even worse.