10 Business Lessons I Learned The Hard Way
My name is Riz Pasha and over the last 10 years I’ve had various failures and successes as a serial entrepreneur and I’ve made pretty much every single rookie business mistake one can make, but I’m still going – so don’t be afraid of making mistakes, everyone makes them.
Providing you learn from your mistakes that will add to your business experience and with your experience you can become better at doing business.
After my first business venture I worked out that financially I would have been better off doing a 9 to 5 but the experience I gained in that time was priceless.
In an ideal world, with the wealth of information readily available to us if you can avoid making those mistakes to begin with, if you can learn from other peoples mistakes, then you’re obviously better off.
Below are 10 business lessons that I learned the hard way, by taking action and making mistakes and whilst they may seem rather straight forward and “I should have known that…” type of lessons, its very easy for new entrepreneurs who haven’t actually done anything yet to make these mistakes.
So I hope you can take away some value and inspiration from my experience.
10 Business Lessons Every Entrepreneur Should Learn Quickly
1. Be 100% Committed
I first decided I wanted to follow my dreams and have my own business when I was 17 and shamefully I admit, it took me until the age of 23 to get started. 6 years? What was all that about? It was because I had doubts and fears and also because I was treating it more like an interest or possibility rather than a real commitment.
I only ever started taking consistent, purposeful action on my first business when I was 100% committed to it. When I had decided that there was no other option or possibility. When I had decided that I was going to give it my full attention of every waking moment.
You have to be obsessed with your idea, project, product or service and you must be 100% committed to it if you want to stand any chance of success.
It can’t be “I’m just going to try this for a month…”
A lot of people say they want to make money or start something but they never take the necessary action because they simply are not committed to doing whatever it takes to get what they want.
You better resolve to see it all the way through from the start. You need to be telling yourself that “This is what I want and I am going to make it happen whatever it takes”. That’s when you know you are committed.
I had a lot of different good ideas and you probably have too. I one point I had 80 domains for different business ideas and I know that number pales in comparison to a few people I speak to.
You need to commit to one and focus on one and build that into whatever you want before you start committing to your other ideas and ventures.
My first business failed after 4 years at the time of the recession in 2009 and it failed because I was no longer committed to it. It was struggling and instead of keeping my attention on it my mind was already looking at other possibilities and business ideas.
Could I have saved it? Truthfully? No. I was no longer committed to it and without 100% commitment I was never going to put in the time and effort required to do so.
2. Take Massive Action
One of the biggest mistakes I think that most budding entrepreneurs make is underestimating just how much work is involved in creating a real business.
I made that mistake and I should have known better. It’s easy to get seduced into thinking like that because we see so many movies where months and years of effort are condensed into 5 minutes. We see our business heroes and mentors as they are now, having already done the work instead of remembering what they had to do to get to where they are.
A lot of people want to be “there own boss” or have their own business because they think they’ll have freedom.
The reality is that having your company will give you freedom to work the hours you want to, it will give you the freedom the make as much money as you want to, it will give you the freedom do something you believe in and it will give you the opportunity to create your freedom at a later date providing you are willing to make the sacrifices and put in the work now.
If you’re going to be successful be prepared to put in the hours and take massive action to get to where you want as quickly as possible.
There is just no way you’re going to become successful anytime soon doing the bare minimum or the typical employee office hours.
That’s why 100% commitment is important. You better be willing to put in those 12-14 hour days, 7 days a week if that’s what it takes, at least in the beginning, until you can refine your processes.
Success happens gradually and then suddenly.
Chances are you’re probably not going to start out with 10,000 sales in the first month. Things take time and growing a business takes time.
Things will probably start small at first and then grow at a much faster rate when you have momentum or critical mass, once you have that you’ll see things snowball.
That’s when you can start living your 4 hour work weeks, if that’s what you really desire.
Now I’m not against working less and if you can become as successful as you want to doing a few hours a day then great for you.
From my own experience the only way to guarantee success in the beginning is massive action.
Sometimes I felt like I had 100 things to do, all vying for my time and attention.
In my first business it felt like I was always busy but I didn’t actually get anything done.
I chipped away at one task here and chipped away at another task here and there same things were on my to-do list for days! That gets demoralizing!
Don’t fall for the multitasking myth. You will need to become an expert at prioritising.
Have goals, make plans, make lists, prioritize and focus on doing one thing at a time.
4. Learn To Say No
A bit like learning to prioritize tasks and activities I also learned my inability to say no to people was costing me time and money.
It also made me an easy target for “friends” that just wanted to use me.
When I started my business I was so happy about every sale that came in that I wanted to tell everyone how good things were and some people quickly caught on to the fact that I had money to play with.
Often they would ask if I could lend them some money for a few weeks and looking back at it I should have said no from the start.
Why? Because it wasn’t my money. It was my companies money and although my “friends” always paid me back it was just too much of a risk.
I do remember saying no to one guy and well I never heard from him until a few years later when he needed another favour.
When the money dried up and the business failed all the other “friends” also seemed to stop calling.
The other reason I needed to learn to say no is that I found that my family and friends just didn’t take what I did seriously. I was always available because didn’t have a “real” job. I was expected to change my whole day around to meet the requirements of whatever needed to be done.
It’s only when I started saying no to family and friends and limiting my availability that they valued my time. Teach people how you want to be treated.
Now, my family and friends always come first, it’s just that if you don’t learn to say no to them when it comes to your business then they will not respect your time and give it importance. Your inability to say no also shows the lack of importance you’re giving to your business.
5. Not All Business Is Good Business
I set my prices low and in doing so I unknowingly attracted cheapskates to buy my products.
Even though I thought I was offering a no-brainer deal there were always potential customers that wanted to haggle and drive the price down even more to the point where I was basically selling it to them at cost.
When I first started business I keen to get my products out there, get the name out there and if that meant selling at cost when someone haggled, well no big deal right?
I found the customers who paid the least were the most difficult to deal with and required the most service and support whilst the customers who paid the most, I never heard from.
Unless a deal is a win-win situation then don’t do it. Stand firm and walk away if you have to because most of the time you’ll end up paying the price if you don’t.
6. Give Out Information On A Need To Know Basis
The courier company drivers would usually ask me what I’m sending in the boxes and I would naively tell them exactly what I was doing…”high end laptops”…Well I should not have been surprised that the couriers lost $50,000 worth of stock in one weekend.
And to make matters worse I wasn’t insured on the value of the shipments, just the weight. I received a cheque for $500 as compensation.
Looking back in hindsight the courier drivers were not my own employees and didn’t need to know what was in the boxes I was shipping. Till this day I know that if I had just kept my mouth shut I probably would have saved myself $50,000. It was a harsh lesson.
7. Always Read The Fine Print
In a related incident to the above I learned that just like everyone tells you…Always read the fine print.
The salesperson of the courier company told me I would be insured at the time of selling to me. I never read the contract because I believed him. Why would anyone lie right? (I was so naive)
It was only when the courier company lost all the stock and I contacted them to get my financial compensation was I shocked to find out that I would be getting back basically nothing.
Don’t believe anything anyone tells you. Always get it in writing and always read the fine print before signing off on any big financial decision.
8. Delegate As Much As Possible
When you’re an entrepreneur, especially when you’re just starting out you may be the only employee of your company.
It’s normal to do everything yourself. I was doing it all…sales, marketing, web design, production, shipping and accounts. It wasn’t too long before I was getting overrun and the first thing to suffer were the accounts. I couldn’t keep track of the numbers.
I needed help and I had the money to probably hire a few people but I made the poor decision to stall on hiring any employees. That decision, not getting people in or delegating to outsourcers was probably the worst mistake I made.
It wasn’t too long before I was working in the business rather than on the business. The growth of the company then plateaued and it wasn’t long until I was trapped in a stagnating business that felt more like a prison. I had zero freedom and no social life.
I think what made me hesitate on employing people was not the financial risk because I probably could have hired interns to work for free. I hesitated because of a need for control.
If you’re a control freak you know what I’m talking about. You’ll find it difficult to delegate because you’ll think nobody can do it better than you and I’m telling you that if you want your company to grow you better start hiring people and start creating jobs because you can’t do it ALL on you own.
9. Make Decisions Based On Numbers
It seems like an obvious lesson right?
Your business decisions should be made on the numbers and there are 2 mistakes that I made that made me realize this.
First of all I went into business because I was passionate about what I was selling but knowing what I know now it was never the right business to get into.
I was trying to get into the computer hardware business at the time IBM were getting out. That should have been the first sign that making money would have been tough. But I was making decisions with my heart rather than my head.
I didn’t do any realistic financial projects or anything, I mean I did but they were terribly skewed by the thoughts of a kid chasing his dream.
If I had made the decision on what the realistic numbers were telling me I would have seen that my other ideas stood a far better chance of being successful.
The other mistake was that I didn’t know my numbers. I mean I did but they were all in my head and not in my accounting software. I also did not hire a bookkeeper or accountant which was dumb. I remember the account telling me “you are penny wise and pound foolish”.
Simply put, business is all about numbers and if you don’t know exactly what they are at any given time you cannot make good business decisions.
If I had known exactly what my numbers were, even on a month by month basis rather than doing the basic thing of looking at my bank balance I probably would never failed in the end.
I made pretty much every conceivable rookie mistake in my first business but not keeping track of the numbers probably tops the list. Don’t make the same mistake I did, keep on top of your numbers.
10. Have An Exit Plan
When I was going into business for the first time the idea of having an exit plan before I even started was a foreign one to me.
Why would I want to exit? I’m going to do this forever is what I thought!
Doesn’t having an exit plan contradict being 100% committed to your idea?
Not all businesses go to plan and it’s important that you have a few ways out if things don’t well.
I’m not saying that you should just quit if things are not working out as planned. What I am saying is that you should just have a clearly defined plan of exit before you start, even if that means “I’ll just close the business if it is not profitable by x date”
I of course didn’t even have that and when it came to closing my business it felt more like I didn’t have any choice but to do so. It felt like a massive failure.
Maybe I would have felt different if I had made the decision beforehand and created an exit plan. Maybe it would not have left me $70,000 in debt.
I did kick myself later when I realized that even though my business failed and closed I actually had at least $30,000 of intangible assets that could have and should have been sold, but I didn’t have a plan for any of it!
You don’t need to have an exit plan just if things don’t work out though. You should also have an exit plan if things go right.
Things change, people change, the markets change and just because you enjoy doing something now doesn’t mean you’ll always enjoy it. At that time you can decide to sell your business.
You can of course create a business with the very intention of selling it from the start and you should have a plan for that.
I now look at starting any business with the intention of selling it. I find that way it helps me run the company separate from me, just like it should be. I also find that I am not emotionally attached to it and can think rationally about it. I would suggest you do the same.
Well those are the 10 business lessons I have learned from my first business. Let me know if you agree and if you have any lessons you can share in the comments below.