5 Utterly Stupid Mistakes I Made Starting My Small Business

This is one of those posts where you’ll read it and think I’m a total idiot for some of the things I’ve done as an entrepreneur and business owner these past 9 years. And frankly, the fact that you’re likely going to have such thoughts is a good thing, because hopefully that means you won’t go down the same road I’ve been down in terms of dumb, as well as preventable, mistakes made.

The Beginning

Coming out of college 9 years ago, I was really not sure what I wanted to do with my life. I knew I wanted to be successful, but in terms of how I was going to get to that point, well that’s another story. By fate though, I happened to move back home to eastern Virginia immediately after college, thinking it would be a short pit-stop where I’d get a chance to check out my job prospects  and lay the path for my future.

It was during this time that my good friends Jason Hughes and Jim Spiess had just started a swimming pool company. They had dreams of grandeur and needed someone to manage a small retail store they’d just opened up, selling hot tubs, swimming pools, etc. And just as these two men were opening up this store, I was moving back to town. Before I knew it, they had asked me to be their first employee, with the hopes of running their retail location while they worked in the field doing construction.

Knowing very little about sales, and knowing much less about business, I naturally accepted their offer. . Little did I realize that this seemingly small decision would have such a huge impact on my life. In fact, within 6 months of my employment with Jim and Jason, they offered me a partnership and, as they say, the rest is history.

And considering we now have about 9 years of ‘history’, I’m able to look back, partly with a smile and partly with a head-shake, at some of the terrible business decisions and mistakes we have made. So without further ado, here are our top 5 mistakes we’ve made as a business during this time:

1. No Hedgehog  Concept

Never heard of a business’ hedgehog concept?? Well if you haven’t, you absolutely need to read the book ‘Good to Great’, by Jim Collins. It’s an awesome read and every new business owner and entrepreneur should give it a look. Essentially, a hedgehog concept (see visual) is the one thing a business can be passionate and great at. In other words, what can your company do better than anyone, making it the best of its kind? If you can’t answer this question, then Houston, We Have a Problem.

My business partners and I had absolutely no idea of what our Hedgehog Concept was when we first started. Not only did we want to be the best inground pool installers in the world, but we also wanted to install more above ground pools than anyone, sell more hot tubs than anyone, and also have a power-house service department. Although all of these concepts were ‘nice ideas’, in reality they prevented us from having an identity. In fact, it took us 6 Years to develop a hedgehog concept, which today is:

Become the Premier Inground Fiberglass Pool Installer in the Country, as well as the Swimming Pool Industry’s Beacon of Consumer Education.

9 years after starting our little business, I’m happy to say our hedgehog concept is now a reality.

2. Brick and Mortar Doesn’t Always Mean More Sales

I had this silly idea years ago that if your company had more retail stores, we’d naturally make more sales. This is why, after having a few years of moderate success as a company with one retail location, we opened a second retail location in Richmond Virginia. Although such a business strategy may have made sense 10 or 20 years ago, it makes very little in today’s world because of the internet. In fact, the brick and mortar of today is what’s found on a company’s webpage.. It is for this same reason that I closed my Richmond location exactly 5 years after I opened it- It didn’t fit our company’s hedgehog concept and was only costing us time, money, and headaches.

Today, instead of having the nice retail stores that I once had, I simply have a large plot of land off the highway with offices, warehouse space, and an area outside for model inground pools that are actually installed in the ground. Because we now understand what we can be the best at with our business, we do not focus our energies in those areas that only held us back before. Frankly, getting out of retail was possibly the smartest thing we ever did as a company. Remember, just because a facet of your business may be making you money, it may actually make you more money if you let it go to focus on the aspects of your business that make you the most money.

3. Accounting Knowledge a Must

I recently shared an experience on this blog about how my biz partners and I went through a major embezzlement about 6 years ago(due to our poor accounting knowledge), as well as the trials and tribulations we passed because of that very difficult ordeal. Although many lessons were learned from this experience, the main one was that business owners must have at least some basic accounting knowledge when starting a business. In fact, I’d consider this a moral imperative. And because so many do not, embezzlement crime runs rampant throughout the world as business owners are to blind to know when their money is being stolen right from underneath them.

4. Shotgun Marketing

Geez…When I think about all the money my company wasted because we had no marketing plan for so many years I almost want to vomit. Actually, one could argue that we did have a plan. It went something like this:

If it sounds good, let’s try it!!

What’s crazy is that many, many small businesses throughout the world have no true marketing plan or strategy whatsoever, which makes them fall victim to great sales pitches from advertising agencies and unending monthly bills. This is why I’m of the opinion that a marketing plan should also have its own Hedgehog Concept. As I’ve talked about countless times on this blog, my company, because we understand our marketing identity, does ZERO outbound marketing. No radio, no TV, no print, no direct mailers—none of it. Our complete and entire focus is to have a content driven website that blows people away and leaves a powerful impression on their minds because of its many blog articles, videos, testimonials, etc.

5. Slow to Embrace Technology

This goes hand and hand with our marketing mistakes, but because I now understand just how critical web advertising is, I only wish I had embraced it, as well as other technologies, sooner. Luckily, I found Hubspot a little over a year ago and learned how to take our website from a Web 1.0 to a Web 2.0 structure. And although this was one of the best business decisions of my life (especially considering The Sales Lion is a direct result of this decision), I can’t help but think what might have been if we had embraced Web 2.0 sooner.

So there are my 5 worst mistakes made since becoming a business owner. I could literally list about 20 more but I’ll stop there. Hopefully though, you have found a few of these applicable to your situation and will use this advice to skip over such errors and arrive at your business goals and dreams sooner.

So what are some of the mistakes you’ve made as a business owner? Questions? Comments? As always, your thoughts are invited and much appreciated.

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