Hi everyone! I’ve just filed my first LLC & am planning to open a vintage boutique in my city- I’m completely new to owning a legitimate business of my own. I thought this would be a great question to ask as I know I’ll be making many mistakes in my first year of business.
Please feel free to comment your favorite mistake!
Honor your boundaries. Customers and clients will push them both in time and money. Stick to your guns.
This is very helpful- thank you!
Your least profitable customers will be your biggest headache.
Don’t be afraid to get rid of customers if they’re too much hassle, even in the early days and you’re worried about cash and profit.
I’m probably going to fire a client next week for the first time. She is such a time suck. Not profitable. She spends hours of unbillable time asking dumb questions about my very detailed proposals. If she approves, it goes through magnitudes of revisions, then she fights the bill. It literally says “as bid” and reflects the proposal cost. No idea how she thinks she has a leg to stand on. She can go waste someone else’s time
I wish I learned this sooner. You actually have to “fire” customers. My dad always taught me to “take in everything you can, money is money” and that was such terrible advice. I own a 3 bay garage and I remember back in 08’ when we were dead and I had all 3 lifts filled with those cheap customers. Was making peanuts on all 3 cars combined. An actual REAL profitable job showed up and I couldn’t take him in at the time and he went some place else. Then I’ve had guys who would being me “favors” all the time and then I realized he never gave me anything real. Always said his customers were just broke and couldn’t afford more. I know now that he was cheap with me and would charge his customers like crazy. 20 years and I’m learning every day.
I love that expression ‘firing customers’ !
Develop training programs to retain talented staff.
Read and implement Profit First.
What you actually happens and what does happen are two different things.
I have a great product and I thought it would “easy” to get it into campus bookstores. It’s been nothing but a headache.
Campus reps not returning emails, telling me to contact the corporate office for them not to return emails.
So, it’s ok to get discouraged. Things happen. Just keep pushing.
Don’t assume the way competition does things is actually sensible.
There’s a tendency to think “oh well if they do it that way, there must be a good reason.”
Sometimes yes. Often no.
My own example: my business is a small niche and there was one other business in town like us. They did a TON of stuff in dumb and inefficient ways. We knew this. But we assumed some things that seemed sensible were in fact sensible. Nope, often not.
In particular, they offered a refund on a service that we assumed everyone did. It ended up being $30k - 10% of our first year’s revenue. And this was after delivery of service, with no costs associated with delivering the refund or not. So it came right out of our profit, basically.
Turned out nobody but our one local competitor did this. We were cutting checks to clients they didn’t expect and they just kept quiet. Until one client said how unexpected it was and we did more research.
Fun times.
The lesson there was to challenge assumptions and do your research. If it’s an industry standard, you’ll figure it out.
I loveeeee this. That’s so helpful because there are a lot of businesses out here that are similar to my idea and they are constantly making interesting moves.
My business is literally in market research, so I can attest: there is a LOT of guessing going on. A lot lot.
This isn’t to say you can’t learn from competitors. You absolutely can. Just don’t assume they know any better than you!
Also: if the company sucks, you really do need to take everything with a grain of salt. If they seem to do this one cool thing, but their reputation is garbage…well that one cool thing, in practice, might be garbage too. Doesn’t mean it is, but approach crappy competitors with extreme skepticism about every single thing they do.
THANK YOU! People think I’m crazy to be so cautious but I’ve learned it’s better that way.
And if I may ask you a question- what’s the best way to go about market research for retail? If you don’t mind I’d like to send you a message with more detail!
Yeah sure, message away!
I wouldn’t say these were things I learned in my first year of business as a web developer but over the years.
- It’s OK to fire clients.
- It’s OK to not take a client on.
- The clients who are willing to pay the least can also take up a lot of your time and/or cause the most headaches
- If you provide a service, have a contract.
- Don’t be afraid to collaborate with other businesses, including your competitors.
- If you join a Chamber or a business association, you get out what you put in. It doesn’t automatically lead to new customers. You have to show up to events and become known. Volunteer and form connections. Have a ribbon cutting.