Business mistakes - what are/were yours
Discussion
I started opened my own barbers shop in May this year some of my findings so far;
-Find a good accountant who will give you some free time to talk things though so you know what you need to do (I had 2 30min meetings with different accountants to get the info I needed for free)
-Learn about what tax and NI you will have to pay
-Look to see if your skills are needed and who your customer base is.
-Don't think that you will hit it off from day one (I got lucky in that I used to work in this barbers 10 years ago so still know a few of the locals, but put out 5k leaflets in the local area (only had 30 people off the back of them) But although the shop used to have a client base it had been closed for 2 years so I was pretty much starting afresh.
I've been very lucky in that my outgoings are very low and even if the shop didn't take any money my wife earns enough for us to pay the bills for 6 months.
I've learnt a lot in the last 5 and a half months but I know I still have a lot left to learn especially when my tax returns are due.
Take a holiday (im finally going away this tuesday for a week!!) Felling good,make you work harder for the carrot!
Matt
-Find a good accountant who will give you some free time to talk things though so you know what you need to do (I had 2 30min meetings with different accountants to get the info I needed for free)
-Learn about what tax and NI you will have to pay
-Look to see if your skills are needed and who your customer base is.
-Don't think that you will hit it off from day one (I got lucky in that I used to work in this barbers 10 years ago so still know a few of the locals, but put out 5k leaflets in the local area (only had 30 people off the back of them) But although the shop used to have a client base it had been closed for 2 years so I was pretty much starting afresh.
I've been very lucky in that my outgoings are very low and even if the shop didn't take any money my wife earns enough for us to pay the bills for 6 months.
I've learnt a lot in the last 5 and a half months but I know I still have a lot left to learn especially when my tax returns are due.
Take a holiday (im finally going away this tuesday for a week!!) Felling good,make you work harder for the carrot!
Matt
The Tea Boy said:
put out 5k leaflets in the local area (only had 30 people off the back of them)
Here's one directly related to your post- don't miss the true value of a client.If you do your job well and those 30 customers become monthly regulars at £10 each, over a year they are worth £3600 to you. Multiply that by 5 years and you can see where I'm going.
That £150 you spent on flyers was the best £150 you'll ever spend.
Do you want to buy some flyers?
First regret.
Using an accountant recommended by someone not in the same type or size of Business, who turned out to be a f
kwit.
And I use the word accountant carefully. He really wasn't.
Lost me about 5% of my turnover through poor understanding of my business model through tax that I could legally avoid.
It was someone in the same line of business, (we don't compete, but we share the same customer base) who pointed me in the right direction.
Second regret, procrastination.
Using an accountant recommended by someone not in the same type or size of Business, who turned out to be a f
kwit. And I use the word accountant carefully. He really wasn't.
Lost me about 5% of my turnover through poor understanding of my business model through tax that I could legally avoid.
It was someone in the same line of business, (we don't compete, but we share the same customer base) who pointed me in the right direction.
Second regret, procrastination.
technodup said:
The Tea Boy said:
put out 5k leaflets in the local area (only had 30 people off the back of them)
Here's one directly related to your post- don't miss the true value of a client.If you do your job well and those 30 customers become monthly regulars at £10 each, over a year they are worth £3600 to you. Multiply that by 5 years and you can see where I'm going.
That £150 you spent on flyers was the best £150 you'll ever spend.
Do you want to buy some flyers?
Half to one percent response on a leaflet drop is as good as one can expect.
A local start up barber offered Sunday opening (to start with) and a free beer with each cut (cheap stubby). Few reasonable size local paper ads, bit of editorial, bang instantly busy!
Working in the business rather than on it is probably the stand out one for me. So easy to get sucked into the day to day stuff. Having done this for the last year, I took a shock with two major client losses in the space of two months I.e. undercut by the big players & a sudden loss of revenue with nothing lined up to replace it.
Starting a round of meetings with prospective clients on Monday & not before time.
Starting a round of meetings with prospective clients on Monday & not before time.
singlecoil said:
My mistake was assuming that if I built it, they would come. They didn't. It worked for Kevin Costner, but that was a film.
+1 for this. I spent a load of time building a site called 'NoRecruitmentAgencies.com' which was supposed to be a direct employer jobs board. I thought it would be a real winner based on my own experiences with recruitment agencies and my girlfriend, who works in HR, complaining constantly about recruitment costs and recruiters in general. After what must have been several months of total development time (all done by me) the big launch day came (May 2010) and I started cold calling companies to syndicate their jobs on the site. Generally companies were happy for me to publish their jobs for them but didn't want to spend any time doing things for themselves. I ended up getting emails and phone calls from people asking me to publish or edit job postings for them instead of them logging into the site and doing it themselves. I hasten to add this was an entirely free service so I became a skivvy for free - not good! The original intention was to introduce paid for 'featured' job postings a la gumtree in due course once the site got busy but sadly that day never came.I changed the site to simply be a free jobs board so even recruiters could use it but that never went particularly far either. The site still exists here:
http://www.opening.co.uk
I was thinking of adding a nice tumbleweed sound effect to the site to complete it! I keep the site up with the vague idea of one day putting some energy into it again but mainly for the nice Ozymandias style story I can tell to people about my amazing dot com start up :-).
On the plus side I really developed my skillset when doing all this and it gave me plenty of experience to take away for other business ventures I've embarked on since then.
Edited by billythekid001 on Friday 1st November 17:02
I think mine was probably expecting things to happen to quickly and easily.
I think starting a business is like having a new baby. Lots of people tell you it's really difficult at the beginning, but you never realise how difficult until you do it for yourself. I suppose launching the business in the middle of a recession wouldn't help though!
The other would be paying for print advertising in local papers and magazines etc. Complete waste of money, although perhaps this might work better for other businesses.
Doing a good job is obviously very important, but I think the most effective way of generating 'word of mouth' business is making the customer feel as valued and important as possible and helping them wherever you can, even if this means spending more time with them on something than you originally planned.
I think starting a business is like having a new baby. Lots of people tell you it's really difficult at the beginning, but you never realise how difficult until you do it for yourself. I suppose launching the business in the middle of a recession wouldn't help though!
The other would be paying for print advertising in local papers and magazines etc. Complete waste of money, although perhaps this might work better for other businesses.
Doing a good job is obviously very important, but I think the most effective way of generating 'word of mouth' business is making the customer feel as valued and important as possible and helping them wherever you can, even if this means spending more time with them on something than you originally planned.
chunoo said:
The other would be paying for print advertising in local papers and magazines etc. Complete waste of money, although perhaps this might work better for other businesses.
I'm no fan of newspaper advertising but 99/100 I hear this it is down to the quality of the ad. The message, the copy, the CTA, the offer, the benefits, the position, the frequency are all things most businesses seemingly don't consider.The papers aren't blameless as they could be offering a marketer/copywriter to advise but in the end it comes down to the advertiser to get it right. Too many effectively outsource the responsibility to the paper who are then easy to blame when the response is poor.
A conversation I had with my partner a year ago regarding one of are oldest clients.
Me. Maybe we shouldn't be working on his contracts any more.
Partner. We can't do that he's a good customer.
Me. He takes an age to pay and when he does he moans about the amount and is always asking if he can pay some now and some next month. His sites are the most unorganized and badly managed making it all but impossible to make a reasonable profit. Are you basing the "he's a good customer" on the fact that he's a bloody nice bloke ?
Partner. You may have a point..
Me. Maybe we shouldn't be working on his contracts any more.
Partner. We can't do that he's a good customer.
Me. He takes an age to pay and when he does he moans about the amount and is always asking if he can pay some now and some next month. His sites are the most unorganized and badly managed making it all but impossible to make a reasonable profit. Are you basing the "he's a good customer" on the fact that he's a bloody nice bloke ?
Partner. You may have a point..
Don't wait for customers to come to you get off your arse and go to them. The phone is an excellent tool for this.
Cut your costs where ever and when ever possible but not to the detriment of quality.
When ever you think you are getting a good price I guarantee some one else is getting a lot better. I learnt that the hard way. Make sure you go to every supplier you can and negotiate hard with each one. This will give you a better perspective of the market place.
When we start work with new clients contracts are all ways in place. It's so easy over the years to become complacent and more trusting DONT the best relationships can turn sour very quickly. In writing in writing in writing.
Cut your costs where ever and when ever possible but not to the detriment of quality.
When ever you think you are getting a good price I guarantee some one else is getting a lot better. I learnt that the hard way. Make sure you go to every supplier you can and negotiate hard with each one. This will give you a better perspective of the market place.
When we start work with new clients contracts are all ways in place. It's so easy over the years to become complacent and more trusting DONT the best relationships can turn sour very quickly. In writing in writing in writing.
Mashedpotatoes said:
Don't wait for customers to come to you get off your arse and go to them. The phone is an excellent tool for this.
Cut your costs where ever and when ever possible but not to the detriment of quality.
When ever you think you are getting a good price I guarantee some one else is getting a lot better. I learnt that the hard way. Make sure you go to every supplier you can and negotiate hard with each one. This will give you a better perspective of the market place.
When we start work with new clients contracts are all ways in place. It's so easy over the years to become complacent and more trusting DONT the best relationships can turn sour very quickly. In writing in writing in writing.
I can echo this... have a great product and then expect the world to turn up at your door wanting it... that is not the case, you have to make the first step.Cut your costs where ever and when ever possible but not to the detriment of quality.
When ever you think you are getting a good price I guarantee some one else is getting a lot better. I learnt that the hard way. Make sure you go to every supplier you can and negotiate hard with each one. This will give you a better perspective of the market place.
When we start work with new clients contracts are all ways in place. It's so easy over the years to become complacent and more trusting DONT the best relationships can turn sour very quickly. In writing in writing in writing.
Also having a naive parnter that is very opinionated (defensively) but doesnt get much done, always an opinion on how the business should be ran despite not knowing arse from elbow about running a business, its now turned round but requires me to manage them like an employee when I should not have to. This should be temporarily... hopefully before the stress kills me.
I have a main job consulting to push more money into the company, whilst take up is growing, them looking after the day to day running with preset tasks that need doing, only to find them not doing them in a timely manner (take a week to do 4 hours work, etc) then having an excuse as to why it was not done was the final straw, I as said before am managing them closely now.
Get on a lot better now the work load is more manageable, but there have been times of threats to wind up the company or offer them a payout on their investment of 33% to take 100% ownership to focus their mind, as I dont need this and can find another investor very easily to take a parntership in the company.
However they did land us a spot at the biggest trade fair in Uk/Europe... however muggins here is funding the project.
The next 6 months should be interesting.
1 - If you are setting out with a business partner/s spend time and money getting the shareholder agreement water tight; get an expert in this field to assist you even if you think you know it all. I've had some shockers.....
2, Never permanently delete any emails that you one day might need.
3, Once you get comfortable, content and stop driving the business you are standing still; you are not, you are going backwards.
4, If it is 100% your business and you have employees then by and large you are on your own. You go home thinking about work; they are thinking about getting paid. You are driving to work thinking about the day; they are thinking about getting paid.....you get the idea.
5, See rule number one!!
2, Never permanently delete any emails that you one day might need.
3, Once you get comfortable, content and stop driving the business you are standing still; you are not, you are going backwards.
4, If it is 100% your business and you have employees then by and large you are on your own. You go home thinking about work; they are thinking about getting paid. You are driving to work thinking about the day; they are thinking about getting paid.....you get the idea.
5, See rule number one!!
Never do things as a favour - get a contract in place.
When a client talks about flexibility, they always mean yours, not theirs. See also 'flexible hours'
(I'm bad for this one) Don't let things lie. Fix them or finish them and get on with something else.
Keep an eye on the returns. It's easy to get lost in technically interesting or fun work that has no value.
Always check up on the company history of clients.
When a client talks about flexibility, they always mean yours, not theirs. See also 'flexible hours'
(I'm bad for this one) Don't let things lie. Fix them or finish them and get on with something else.
Keep an eye on the returns. It's easy to get lost in technically interesting or fun work that has no value.
Always check up on the company history of clients.
I think most mistakes pale into insignificance compared with hiring the wrong people.
Aside from wage costs the effect on morale and the smooth running of the business, the drain on management time and resources, and the opportunity cost compared to having the right person makes it more costly than just about anything else you can do wrong.
Aside from wage costs the effect on morale and the smooth running of the business, the drain on management time and resources, and the opportunity cost compared to having the right person makes it more costly than just about anything else you can do wrong.
Write some robust Ts and Cs and make people sign them.
Leave a paper (or at least email trail) for EVERYTHING - confirm even the most trivial thing in writing
Don't let any payment go over 60 days.
Don't do business with relatives if you can (our ONLY bad debt - ARGHHH!)
Pay your suppliers promptly.
Leave a paper (or at least email trail) for EVERYTHING - confirm even the most trivial thing in writing
Don't let any payment go over 60 days.
Don't do business with relatives if you can (our ONLY bad debt - ARGHHH!)
Pay your suppliers promptly.
Started my business September last year and have learnt a lot in a short amount of time (far more than on my business management course).
The main mistake I made was trying to compete on price and not understanding profit margins. I tried to be as cheap as possible and last year I had an average profit margin around 14%. After spending a lot of time studying my business and after a few shocking results, I knew that changes needed to be made. I focused more on offering the best service I could while selling the products at a profitable price, average profit margin this year 27% and I have had a big increase in sales.
My advice, understand your business as best you can and never stop looking at it and analyzing it. Ask for other people's advice, it's amazing how they will spot things that you don't.
The main mistake I made was trying to compete on price and not understanding profit margins. I tried to be as cheap as possible and last year I had an average profit margin around 14%. After spending a lot of time studying my business and after a few shocking results, I knew that changes needed to be made. I focused more on offering the best service I could while selling the products at a profitable price, average profit margin this year 27% and I have had a big increase in sales.
My advice, understand your business as best you can and never stop looking at it and analyzing it. Ask for other people's advice, it's amazing how they will spot things that you don't.
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