The Worst Business Mistake I Ever Made — and What I LearnedLearn from these 8 owners’ mistakes so you don’t make the same ones.
Mistake: Trying to be your own CTO
Lori Cheek, founder and CEO of Cheekd, a mobile dating app, said her worst mistake was not having the right team in place, which led to a tech disaster.
“After our launch in May of 2010, we found ourselves on the cover of The New York Times Style Section coined as ‘the next generation of online dating.’ We got site traffic from all over the world until Cheekd.com crashed. Once the site came back to life, we got orders all over the country…Soon after, we realized that our web developer had the button ticked “OFF” that captured our users’ credit card information, and were unable to enroll them into our recurring subscription. We lost nearly $30,000 from this simple mistake.”
What I learned: “I needed a CTO. Not having the right team around me led to the most epic mistake of my 5 1/2 years running my small business.”
Mistake: Obscure product naming
Jim Belosic, CEO of ShortStack, a web development company, said his worst mistake was giving “cute” names to their software subscription plans.
“The company is called ShortStack — I wrote a book about how to make 3D pancakes that was published right when I was starting the company — and I named the plan levels after pancakes: Short Stack, Double Stack, All You Can Eat, etc. We recently did an A/B test on the pricing page where we instead called the plans “Starter,” “Agency,” “Enterprise” and so on. The plan names are much more straightforward…and we had 70 percent more conversions. The average spend also went from $434 to $1,100.
What I learned: “Name your products clearly so potential customers can figure out exactly which of your products best suits them.”
Mistake: Accepting personal checks
Harrine Freeman, CEO of H.E. Freeman Enterprises, a financial counseling service, said he accepted personal checks from clients when he started his business. “In one instance, I accepted a personal check and the check bounced three times. I was charged three overdraft fees on my business bank account. I notified the client but was never paid the overdraft fees and was not paid the money owed.”
What I learned: “Some people are dishonest and will not accept reality regarding their finances. Some people purchase items they cannot afford to buy. Some people will never pay back money owed to a business owner. I no longer accept personal checks. I only accept credit or debit card payments. I now hire a collection agency or lawyer to collect on outstanding balances due. I create customized packages based on a client’s budget.”
Mistake: Not seeking help from SBA and SCORE
Kirstin Chapman, founder of Kleynimals, an environmentally friendly baby toy company, said her worst mistake was “not taking advantage of all the help and resources out there when I started my business.”
What I learned: “The U.S. government has a lot of resources for small businesses from the Small Business Development Centers, SCORE and the Export Assistance Centers. I ended up using these resources much later in the process when I had already overcome the more challenging hurdles required to get my business off the ground.”
Mistake: Not finding out what the customer wants
Sophie Knowles, CEO and founder of PDF Pro, an online PDF editing software company, said that when they designed their software, they weren’t paying attention to what customers wanted. Instead, the design was “based on my personal experience.”
What I learned: “Build your product for what your customers need, not what you think they need. Ultimately, this meant we had to make significant changes in order to achieve a product/market fit. I learned it’s better to create a minimum viable product that addresses the most pressing needs of your customers. You can always add extra features as the product evolves.”
Mistake: Not firing someone with an attitude problem
Daisy Jing, CEO of Banish, a natural skincare line, said her biggest mistake was not letting go of someone who didn’t contribute positively. “I kind of put it off thinking that the person will change in time.”
What I learned: Your team is your front-liner and your priority should be how your customers are taken care of. With a ‘wrong employee’ on the team, customer service will be taken for granted and there’s a higher chance that business will be affected as well…My team should always be aligned to my company’s values and mission.”
Mistake: Not having the right insurance
Bryan Clayton, CEO of GreenPal, an on-demand lawn care service, said his biggest mistake was not buying employment law liability insurance. “This covers your business in case you make mistakes around calculating overtime and wage and hour violations.” Clayton’s company was audited by the department of labor, which determined that the crew leader managers could not be paid a salary but needed to be paid as hourly wage employees. “This in turn kicked in additional overtime time charges that were due to 80 employees and, long story short, resulted in a $450,000 fine that my company had to pay.”
What I learned: Don’t be penny wise and dollar dumb; get the proper insurance coverage before you scale your company. If we had the proper insurance we would’ve been covered in this nightmare that almost killed our company.
Mistake: Not believing in yourself
Russab Ali, founder of SMC Digital, a digital marketing company, said he let a lack of confidence get between him and a six-figure contract.
“A few years ago, when we were first starting out, I was able to land a meeting with a decent company. I was pitching them quite well, and finally we got to the point where they wanted to sign on for a contract. I did an audit and found there was a lot more work to be done than expected. At this point, fear crept in and I began to doubt that I could deliver good results.” He declined the contract. The company hired someone else, who under-delivered. “They came back to me and asked for help…I took on the work and did a great job.”
What I learned: “I realized then that there is no point in being afraid I can’t deliver because I genuinely care about helping other companies. This genuine concern allows me, and in extension my agency, to deliver exceptional results. By thinking of all my clients as my friends, I go out of my way to a) not let them down and b) work on their companies as if they are my own. I have taken this mentality with me as I grow and have always exceeded client expectations.”