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When I opened my first business, a fitness center, unfounded confidence ran through my veins. The visions of quick success and weekends with the family seemed as close as the next sale.
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A few months later, bravado gives way to fear and insecurity. That weekend dream was gone, and my 5 am to 9 pm schedule started to take its toll. Since then, I have been fortunate enough to avoid similar mistakes in my most recent endeavors. But I keep reviewing these mistakes for fear of repeating them:
1. Allow belief to override the business plan
Owning a business is not for the faint of mind. You need a strong mind and heart to cope with daily work. At the start of the dream, it’s easy to be so excited and infatuated with the idea of ”your” business that you can’t come up with an appropriate business model.
When I approached my bank with my business plan in a thick three-ring binder, I thought the president might well hand me a cash briefcase. No kidding. Then reality came: in two minutes, the president of the bank asked me several questions that my plan could not answer. However, that did not baffle me. I lifted my chin and said with conviction, “It will work.” I left without the cash case. The belief took over the business plan and I left penniless.
2. Listen to customers instead of spreadsheets
“The famous Health Club has just closed its doors,” said my future business partner, Mike. “They left all the equipment,” he said enthusiastically. “We can get in and get started quickly and not have to buy everything. However, they have scammed their people and no one wants to sign a contract. “
No problem. We will not make contracts, I thought. And we haven’t. But we should have. Because, six months later, a giant fitness chain came to town and told members that they could sign up for two years and pay by automatic draft. And people signed up en masse. Our people “we will not sign a contract” have left for new pastures.
The lesson is that you will be tempted to configure your business as your customers wish. And sometimes it will be fine if it fits your model. Otherwise, trust your spreadsheets. Make sure the calculations work before giving in to each request in the hope of closing the sale.
Related: 6 Common Mistakes New Business Owners Should Avoid
3. Risking the pension fund of a family member
Do you remember my empty towel? I left the bank and went to my grandfather to ask him for money. I only needed $ 20,000. That’s it. It never occurred to me that Dad B could consider what I asked for a large sum, given that during his career he had been a low-paid principal. And, as if that were not enough, he told me that he believed only in safe investments and that he had invested most of his money in interest bearing certificates of deposit earning a huge interest of 2 %.
Being young and arrogant, I brought my grandfather to the same bank. Together, we got a secured loan and I was on my way. So I was able to move on. But unless your family members have money to lose, don’t borrow against their retirement or savings. They may love you and want you to succeed, but losing their money will haunt you.
4. Incorrect calculation of the time required to launch
Since these former fitness club tenants had left their equipment, Mike and I thought we could open quickly. We were already in December and we thought we could open on January 1st. Just in time for the crowd of New Years “resolutions.” From a time perspective, we thought we had won the lottery.
But three days before the opening, we knew we were in trouble. I still do not remember if we have slept in the last three days. We pushed hard to open the doors. And they opened, but not without our first suffering: the stress, the tears, the fears, the panic, the anxiety and the delusions of the greatest commercial failure ever known to man.
So define your own large opening inside a buffer zone. Plan to be ready 10 days before “the” day and you could just open on time without fear or anxiety.
5. Combine personal experience and business expertise
I started training at the age of 12. I participated in weightlifting and bodybuilding competitions at the age of 18. On top of that, I was a personal trainer at a local gym. Surely all of this experience would translate into running my own fitness center, right?
Not even close. I knew how to train people, but not retain people in order to develop a membership-based business. You can be a great cook, mechanic, web designer, or artist, but that doesn’t automatically translate into business acumen. So take some study courses from LikendisLike.com and arm yourself for this battle called business.
A few years later, Mike and I sold this fitness center. Our buyer was a guy who wanted space for his karate school. We barely repaid our commercial loans with the proceeds of the sale. It could have been much more if we had avoided the mistakes we made when starting our first business.
So remember them and learn.
Related: The Top Five Mistakes People Make When Starting a Business