My 12 biggest mistakes starting up a new business
I mentioned in my Two year Birthday blog that I made some pretty big start up mistakes. And for me, there is nothing better then hearing what other businesses mistakes were, because that is where we can really learn and grow. It also makes us human and sharing really is caring. So, let me begin because the list is pretty big, here are my 12 biggest business mistakes in my start up business:
1. Start Small
Me: "I need as many designs as physically possible"
Yr 2 Me: "I have too many designs, which need to be stored somewhere, which is expensive. I have too many socks in total that need to be sold to alleviate the storage costs in a growing economic crisis"
Lesson: Start small. Just a few designs up front is fine. Don't do me and cost yourself a fortune in 3PL storage costs.
Me: "I'm going to do *all the things* like join Amazon.
Yr 2 Me: "I still don't know how to use it, it's like learning a new language. I don't have the time to learn or understand it, it's now costing me over $100 a month to keep my listings without hardly any sales. I will recall all stock and stop using it."
Lesson: Firstly, I wish I'd simply waited to join up or made the time to learn. It cost me a lot of time and effort to send each size and design to the Amazon warehouses around the country. When I decided to cut my losses, I was then handed a bill of over $500+ because you are charged money for the return of your goods. Ouch. In hindsight, what I should have done is slashed the price of my socks to sell them quickly - therefore not costing me $500+ and by doing so could potentially re-coupe the money it cost to send them out originally and the money I was being charged per month in storage fees. My worry was I had a growing list of boutique stores stocking my socks, I didn't wan't to cheapen the brand or undercut my supportive stores. But money is money when you're short of it.
Me: "I'm going to do *all the things* like join Catch
Yr 2 Me: "I'm not 100% sure how to use it properly, I'm not sure it's the right place for my brand. I'm only getting the occasional sale which is full price but with free shipping so mostly it's not generating any money at all. The sales balance out the fees of the app I use to link Shopify to Catch. I will just cancel the app to save the fees."
Lesson: I wish I'd hung on to the listing a bit longer. It took a great deal of effort to set up and yes I was cutting back to save on outgoing expenses but this could have been an avenue to try and sell my older designs at a discounted rate to move the stock out of my 3PL which is costing a lot in storage fees. But would that have happened really? I'm not sure, but without trying, I don't know and that is a lesson learnt.
4. If you have the perfect visual display unit in mind - DO THAT.
Me: "The carpenter has made the most beautiful display unit I want to display my socks on. But he never replies to my emails or calls. Also, how would I send these ready made stands? What shipping boxes will fit them? The shipping will be too expensive... This is all TOO HARD.
Yr 2 Me: "After having cardboard, lighter, easier to send stands made that are not the stands I had envisaged. The stores don't really love them. But I had to buy minimums and have lots left."
Lesson: I had to go back to my beautiful original stands and just work it out. Find a new carpenter, box supplier and courier. Meaning I spent double on stands rather then working it out from the beginning. And then spent more money getting samples made in China, because they are made and sent in flat packs which will be much easier to send around Australia. (Note, I should have done this in the beginning and saved myself triple).
5. Two sizes does not fit my budget
Me: "I want to offer two sizes to ensure everyone is happy."
Me Yr 2: "It's all very well having the larger size for females, however when 90% buy the smaller size in the pink raindrops and 10% buy the larger size - what am I going to do with the other 900 pairs of socks?
Lesson: Being such a young start up business, I can't afford to store the extra 900 pairs of socks per design when no one is buying them. For year three, I am going to only have two sizes made of the unisex designs. Hopefully in the next year I can whittle down the oversupply of larger pink socks (and the rest) and can re-evaluate ordering in year three.
6. Getting an agent does not equal *Making It*
Me: "This is it, I've got an agent, I'm going to do everything they suggest and will sell thousands of socks."
Me Yr 2: "14 Interest rate rises later."
Lesson: I did not read the room. I did 'all the things' that usually work in retail as suggested. However, I was a little stifled by a few things:
-The original stands either put people off or they tried them and then didn't re-order.
-Joode was another socks brand, but more expensive (although very cute!) - the socks, not me.
-Joode was a new unknown brand.
-Stores that were tightening their spending weren't going to take on a new unknown brand.
- Stores simply didn't have spare cash to spend on new stock.
I created the suggested four new drops of socks for the year. But sadly in the current climate, they were not flying off the shelves, heck they weren't even being added to the shelves. My non-experience and the current retail climate has meant I have even more socks, which means even more storage fees. Year three will be less because I already have more.
7. Trade shows are good and bad
Me: "My coach says Trade Shows are the place to be! I am going to do as many as I can and will get so much interest and will be stocked in all the shops and will smash it."
Me Yr 2: "Is 9 new stores per trade show worth it?"
Lesson: I think there is a time and place for trade shows. I think pre covid was the heyday for sure. They are amazing to meet retailers, and show your wares for them to be seen and touched. Heck I have seen with my own eyes how some brands KILL IT. But unfortunately my socks did not. And that is x 3 on my own and x 2 with the agents across two years. The disappointment took a real toll on me. My confidence took such a knock, it was hard to get back up from. All those hopes. But there are many people selling socks. And after all is said and done, they're just socks. And people are not coming to see my socks. They're looking for things that are just not socks.
8. Influences don't equal sales
Me: "I'm going to use all the influencer platforms and send out oodles of socks and people will buy my socks."
Me Yr 2. "Brand awareness 10/10, meeting some lovely people 10/10, gaining some new stockists 10/10. Sales: $0"
Lesson. I'm still ok about this lesson. It was an experience. I did pay for some posts on Tribe and did pay for one influencer who I loved. Both of these options I would not do again. I think I was caught in a time where people do not buy from influencers posts anymore. Or maybe people are just not spending money. Either way, it did suck to not generate sales.
9. TikTok for small business is not always for small business
Me: "Oh my goodness, I just won the TikTok small business Christmas opportunity for small business. I can already see Joode's name in lights"
Me Yr 2. "That was the biggest let down of my entire self employed career. The disappointment utterly floored me."
Lesson: Just because TikTok have done a competition, the prize for a legendary TikToker to promote your business for Christmas doesn't always mean exactly that. Even if you made a fun video for the promotion, if TikTok does not invite anyone to this event, no one goes. In my case, somewhere something went wrong. No promotion = no one seeing the 'Things to buy for Christmas video' and no sales. This was very very far away from the defininition of a prize.
10. Entering small business competitions doesn't mean they're fair
Me: "OMG I've made it into the running of this magazines small business competition. I don't think I can win it, but I'm going to try for 'Peoples Choice' and ask every single human I know to vote for me."
Me Yr 2. "Just because they want you to promote their magazine by voting, doesn't mean they are going to pick a winner for most votes or publish in the magazine as suggested in the prize detail. When you enquire where the 'Peoples Choice' winner is, they hastily choose one of the other category winners who already won and are in the magazine.
Lesson: Never. Ever. Take part in Peoples Choice voting again.
11. Not all markets are suitable
Me: "I am going to take every opportunity that comes me way."
Me Yr 2: "Nothing kills self esteem more than selling your wares at the completely wrong market. Yes there are thousands upon thousands of people there. Yes they all do have feet. Yes it's Winter and sock weather. But no, they are not there to buy socks."
Lesson: Not all markets and opportunities are suitable. Know your market and clientele, know where 'your' people are going to buy your stuff. Yes it's hard without trying them but you do get better at finding your sweet spot. For me, Mind Body & Spirit was a huge no-no. As was a huge corporate 'in-house' market. And I avoid similar whenever they pop up.
12. Check your newsletter sign up works
Me: "Worked with someone awesome, set up my 'flows'.
Me Yr 2: "Hang on, why hasn't anyone signed up to my newsletter in almost two years accept those who had purchased socks?"
Lesson: Check every month that your newsletter sign up page on your website works. Otherwise, you too can feel the utter grief of a lost few hundred or thousand subscribers.
Now tell me, do you need new socks? I hope so - because I have the perfect pair for you here