Over the past 6 years I founded 9 .com companies. Most of the companies failed miserably and lost me a million dollars or so, but luckily a few of them did well enough to cover my loses. The main reason I had a lot of unsuccessful ventures is because I made some really big mistakes. Hopefully you can learn from my mistakes and not make them.
Don’t spread yourself too thin
A lot of good opportunities will come your way and your gut reaction will be to do them all, but don’t. I made this mistake and what ended up happening is that all of my businesses suffered, even the ones that were doing well. Within 3 to 6 months of me spreading myself too thin all my businesses suffered because I hadn’t spent enough time on each of them, even though I had employees and business partners who were helping me out. Remember, no matter how big or small your business is, you have to spend all of your time on it.
Pick the right type of incorporation
Not only is it important for you to incorporate your business, but it is important to get the right type of incorporation. It may not seem important when you are starting your company, but once you start making money it becomes a huge deal. For example, my accountant tells me that if your company makes under $200,000 in profit a year, a C corporation is good for you due to tax benefits. If you make more than that, consider getting an S corporation or a limited liability company.
I found this out the hard way, when my company started profiting 7 figures a year I had the wrong type of corporation. I ended up getting taxed twice, the company paid taxes on the profit and then I paid taxes on the dividends I got from the company.
Be careful whom you trust
I was working with a few developers and engineers for 3 months and they came to me with a business proposition. The first 3 months of working with them went well, so I decided to hear them out. The businesses opportunity they presented was supposed to revolutionize the hosting industry, but the catch was, they were broke. After hearing them out I ended up giving them some money for living expenses, I bought them a house to live in, and I was dumping 4 to 5 figures into the company every week.
To keep a long story short, they screwed me out of my money, stole stuff from the company, and ruined the house I bought. No matter how well you think you know someone, be careful, because you don’t know who is going to screw you over. One stupid mistake can make you lose thousands of dollars.
Have a thorough hiring process
If you really want to grow your company, you will need employees. You’ll probably post some job openings to find these employees or ask a few friends if they know anyone that you could hire. No matter how you get your applicants, go through each person with a fine-tooth comb. If a friend recommends someone, it doesn’t mean that they’re a good hire. I made this mistake multiple times by hiring developers, designers, and sales people that friends recommended. Just because someone did well at their last job, it doesn’t mean they will do well working for you.
Make your employees accountable
If you aren’t strict with your employees they will start slacking off after a while. And if you travel frequently like I did, they will really start messing around when you aren’t there. The first day a new employee starts, you need to be strict with them because it is hard to get employees out of bad habits.
During the first few years of being an entrepreneur, I didn’t hold any of my employees accountable. Every time they told me something, I took their word for it. On top of that I wasn’t strict when people came in 30 minutes late and after a while it became a daily habit.
To solve this I started using project management software, like Liquid Planner, and I made each one of my employees upload what they completed at the end of each day. This way I could keep track of what each employee did.
On top of that I made every one clock in and out. This allowed me to see who came in on time and who didn’t. At first I didn’t think it was a big deal that a few of my employees came in 30 minutes late each day, but over a course of a year it added up to 3 missed weeks.
Collect your money on time
Making money may seem like a hard thing, but collecting money from people can be even harder. In 2008 I worked for 8 companies that never ended up paying me. This wasn’t a few dollars either, a few companies still owe me over $100,000, sadly I don’t think they will end up paying.
With your business collect the money first before you provide anything. No matter how large a company may be, they can still go bankrupt. Things like contracts and debt collectors won’t help you much if the company doesn’t have money.
And for some reason if someone owes you money, whine to them until you get paid. If you act like you don’t need the money, you’ll never get paid. But if you whine and act like you are in financial trouble, hopefully they will feel sorry and pay you.
Time is not on your side
Especially with your first company, you will want everything to be perfect. The reality is, there will always be problems and nothing will ever be perfect. So instead of trying to make everything perfect, just launch your company before someone else beats you to the punch.
With my first software company, I wanted the software to be perfect before I launched it. I took so long in trying to make the software perfect that Google launched a competing product before I did. After that I had no chance of succeeding because Google’s product was free and mine wasn’t.
Conclusion
No matter what, you are going to make mistakes in life. Even if I told you every mistake that I made, you will still make more. If you want to succeed you can’t give up!!! Sooner or later you will do well, but like anything worth while, it takes time.
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Really all good mistakes to avoid. From personal experience, I know trying to find the write incorporation to do is a pretty annoying and daunting task.
You should consult with an accountant before incorporating.
For those that want free accounting help, let me know.
I am an accountant.
Email: vikdulat at gmail dot com
I am also available through msn, aim, and yahoo. If you are interested, please email me or reply to this
. Cheers!
Thanks for offering free help!
No worries man..Sharing is caring
i can offer accounting help with uk businesses also, im in my final year studying accounting. so you can hit me up for free help in about 6 months
Thanks for offering help Jagdeep!
Wow, I hope you don’t get bombarded with requests for too many free advice, LOL. Anyway, just kidding. But seriously, that’s very generous of you to give free accounting help. I am sure lots of people will benefit from your help. That’s spreading very good Karma, by the way.
I love it!
What comes around goes around.
You got that right, Neil. What comes around, goes around, indeed! Spreading good karma is very good.
Vik, that sounds great! I might just be getting in contact with you as long as the free help is still on the table. I’ve been dreading the thought of doing taxes with all that I have going on at the moment.
Solid advice Neil, you are on a serious roll. I have definitely suffered from spreading too thin (mostly for ego and greed). It’s a tough lesson and not one I like repeating.
Collecting money is huge! There’s this unwritten law that the longer you wait to collect the worse things are going to get. Get paid asap and setup a way to collect on a regular timely basis (why I love autodebit and credit card monthlys).
That is why I love your business. You collect the money from patients before you adjust them.
You’re 100% correct about the unwritten law of collecting money! In all honesty, that law applies to the collection of anything that has to do with trading, whether its monetary or physical goods. It’s definitely worth collecting the money asap if at all possible to avoid all the headaches associated with waiting for payments.
It is a big headache to collect money after. But some companies are really good at it.
Yeah, that’s true… though a lot of the good ones are collection agencies, which thankfully I’ve never had a run in with lol. These companies though also put themselves at a risk for lawsuits due to improper practices.
Yea, but lawsuits are also expensive.
Great post, Neil…I found some of these were perfect for me being in my first year of my own biz. Love the new thesis template too
Hopefully I saved you from losing some money.
Trust is a huge factor in any business and it’s unfortunate that you put yourself out there and trusted people who, either by their ignorance or fraud, ended badly. It’s difficult to know who to trust, that S/C corp thing is horrible though.
You do need trust. I always say that you should get to know someone for a year or two before you go into business with them.
That is a well known asian tradition. Relationships are very important well before pen is put to paper.
I didn’t know that about Asian traditions, but it makes sense. Maybe that is where I get the 1 to 2 years from.
Well at least in China, and a similar approach in Japan. In western culture people get dollar signs in their eyes and will sign up minutes after meeting someone (or not even meeting them). The eastern way builds up trust. I like it.
I do to, but it makes it harder to make money.
Thanks for sharing!
The what-type-of-company issue is perplexing for me – and I’m just trying to decide between and LLC or SCorp.
About perfectionism, I hear you. I’m reminded of a conversation that I had with my dad ages ago. I was up in the wee hours before leaving for grad school doing this and that and he was worried about me and he came downstairs and told me, “Manisha, you want everything to be perfect, but there just isn’t the time!”
So, I’ll be keeping these 7 points in mind.
I would consider asking an accountant about going the LLC or S Corporation route.
The last company I set up was an LLC.
I was leaning toward the LLC. A lawyer with whom I consult periodically also seemed to be thinking along those lines (she currently operates as LLC). Interestingly, my former accountant in Boston and a couple of accountants here in LA have been talking about SCorps.
The LLC appeals to me from an ease-of-operation standpoint, so that I can focus on what I really want to do and not on the corp-o-rama. Also, from what I understand, an LLC can make a special election with the IRS to be treated as an SCorp for tax purposes.
Anyway, I will figure it out. I’m sure there will be times when I have the “doh” moment. Thumbs up for the Homer picture above!
(and, p.s., I loved Trainspotting and hope you’ll enjoy it, too.)
If you ever decide to raise venture capital, you will have to change into a C corporation. (not sure if you are looking for venture capital)
Thanks, Neil, for bringing this up. I’ve been thinking about the prospect of future investors. It’s definitely one consideration for setting up a new entity. Right now I’m a sole proprietor. The money I raise would likely be from individual investors (akin to ‘angels’). I envision an entity with a small number of owners. My lawyer suggested that I would have an investor agreement with each investor in the case of an LLC. With an S-corp, I can issue stock, and that might be more appealing to some investors than an investor agreement, but I understand that VCs and possibly even some angel investors do not like the fact that only one class of stock can be issued and so they would want a conversion to C-Corp from S-Corp before investing. I hear that conversion from S-Corp to C-corp is easier than from LLC to C-Corp. This line of thinking has me leaning toward an S-Corp, but then I have to think about what that might change on an operational level (reporting requirements, what not) and see how that compares with the perceived simplicity of an LLC.
One idea that just came to me is that maybe I could wait and see what interest I can line up based on my plan. Perhaps I can continue working as is in the meantime. Once the indication of funding is there, then I can set up the paperwork and the appropriate structure for the investment. Or do you think it looks better to have already set up the company before soliciting funding? I guess it depends on who I’d be approaching?
I would just work away and deal with your corporate structure when you need to. You don’t have to have all your ducks in a row.
All of my companies are LLC’s.. I’ve always been told that it’s the best way to go for most people
Unless you are trying to raise venture capital.
I think it really depends on what kind of capital you are raising. I don’t think there’s really a general best route for everybody to go through. It’s best to really sit down with an accountant/lawyer before proceeding with incorporating.
It isn’t. It is going to be different for every business.
Great post Neil. Looks like you took the business school of hard knocks but that’s one of the ways we all learn. Thanks to your post, hopefully those that read this will avoid some of the same mistakes you’ve made.
On a positive note, create a clear vision of where you want to go and every day take steps to achieve those goals. Keep it passionate, on target and the experience you take from it will be the road map for your future endeavors.
Now if I can only follow these rules myself. Cheers.
Thanks Phelan! Don’t you mean I should be following you because you are successful.
Hit me up the next time you are in the OC. We should meetuup.
I don’t get up to OC too often, but when I do, I’ll ping you. I wish you guys had time to come down to SD like the good ol’ RefreshSD days. We’re cooking up some neat stuff.
What’s new with RefreshSD? I may stop by if it sounds cool enough.
In February, we are getting developers, designers and marketers together to ‘partner’ up in teams with their ideas to create some cool sites. Whether it’s an app or a basic site, the goal is to create a revenue stream for each team.
You may have heard of it already, but CrisisWire.com was a group collaborative we put together to kick start and test the process. CW was created for the common good and out of necessity based on an idea by Nate Ritter.
Regardless of anything else, it’s fun to get like minded people together to do this type of thing.
Awesome. I’ll see if I can make it down.
Phelan, that sounds like a great project! I’m always looking for good search marketing groups in SD. Maybe I will signup through the site.
Neil, SD is where it’s at. You know you have a good time whenever you come down here. Plus you have lots of friends in the area. You and Sujan should make a trip!
SD isn’t bad, but it is all about the OC. The OC is great and if there is nothing to do there, you can easily make a trip to LA.
OC is so happening they even made a reality series about all the money grubbing dysfunctional women that live there. http://www.bravotv.com/Real_Housewives/season/3/ LOL
Two words: DK and Tijuana
They also have a Real Housewives of New York and Atlanta show.
As for DK, he is awesome.
And as for Tijuana, that is in Mexico and not San Diego.
Thanks for the insights Neil! I’ll keep these advice in mind when I get my first Startup going next week – Shaph.com ! This Startup will be the first major project I’ve launched since starting my current business 10 years ago.
Hope you won’t mind if I come knocking on your door asking you for some advise when the project is off the ground. You never know, I could even be pitching to you to see what you think!
2009 is proving to be a very exciting time indeed. May this year be at your mercy also Neil!
Cheers Mate!
p.s. just some self plug for my twitter if you don’t mind:
http://twitter.com/shaph
http://twitter.com/frankinguyen
By all means, ask away.
Franki, good luck in ‘09 with your Shaph.com! How has it been going thus far. Startups are always tough, but can prove to be the most successful, especially when it comes to monetary gains!
Those are great business facts. I really appreciate you sharing with us what you learnt the hard way. Its also amazing how you have risen after those huge failures and shows the will to keep on going. All the best.
I never gave up. There were times that I wanted to, but the key is to move forward.
I think “Moving Forward” would make a great post for you to write – Or do you already have one?
I kind of already talked a lot about it in other posts. Maybe I will write a new one on it.
That is key. Forget the past and move on. As long as you do not make the same mistake twice, you have learned a valuable lesson.
Yep, just never forget what you learned. You don’t want to make any mistakes twice.
Great stuff. I would say rule number eight is get your agreements with partners spelled out in writing with painfully detailed parameters. I had a really successful hot sauce company run into the ground due to some unscrupulous partners. All because I thought I could do business on a handshake and partners would do the honorable thing. That reminds me – Neal I think I owe you a case “You know who I am” Let me know when you are in the area and I will drop some off.
Everything should be spelled out in writing. I even had business deals with friends and they screwed me. Sadly, I never got anything in writing from them, which was my fault.
I’ll let you know when I am in the area. Thanks
Hey since it has been a while and you really hooked me up. I will personally deliver to you if you like, would love to catch up. Plus had a few ideas I wanted to bounce off of you anyways.
Sure, let me know when and where you want to meetup.
Thanks!
How about next week you name time and place.
Rob, you and Neil can meet halfway at eVisibility. I’ll even let you use the red couch!
Uhhh red couch? Sounds creepy being married and all but what the hell i’m in.
Yea, I am not sure about the red couch. Plus you guys are 2 hours away.
Email me with what works for you… you are the one driving far.
Neil, you know what’s sad is that it usually is business deals with friends that go awry. These are the deals you think will work out the best and the paperwork aspect is tough to bring about, but its so necessary because 9/10, deals with friends end negatively.
It always is. That is why I don’t do business with friends.
I struggle a lot with your first point. It is so easy to start a new venture and suddenly you have 3 or 4 projects on the go and not focusing on any of them.
That is why this year I have decided to cut back on a lot of my websites and really focus on the ones that are showing the most success.
I think that is the most common mistake entreprenuers make. To some extent I still kind of make it.
spreading yourself thin is the silent killer. Some people I meet have one good idea and instead of focusing on getting that off the ground, they somehow get caught up with a couple of iffy ones that get added to the mix. This diverts focus, wastes time, and eats away at any capital. Eventually all the projects go broke and everything gets shelved. Seen it so many times.
The easiest way around it is to invest in those other ideas, but not to work on them yourself. The problem with this is that it takes capital to invest in other companies/people.
I cannot really put capital into a startup or existing company without taking an involvement. Its just not viable to be passive when somebody wants to take 10K – 75K and not have me involved.
I think a beginner is better off first compiling a list and either doing a logical analysis of what the market could absorb first and implement that before starting the next task…that way you can get market credibility (with your company name) and at the same time will probably will have sustained revenue streams coming into your coffer which you can re-invest into further ideas.
I am the same way now. I only invest money into companies that I am going to be involved in.
I started one company last year and being a one man show it was hard to compete with others who had more man power, but I’ve managed to carve a niche for myself.
I’m now branching out into more areas, taking help wherever I can while keeping a grip on what I start. It can be hard to focus as starting something web related is so easy today.
My word of advice, don’t decide on a domain name in one sitting
And never buy a .net domain name. Always go with a .com.
really? is there a reason? I had one guy literally insist that I get the .net and .org domains to protect an idea I am current working on (patent pending lol)…
You should get them all, but your main domain name should be the .com version. People tend to assume that a domain ends with .com instead of .net.
That is true, but do people still type in URLs these days, or just use Google, follow links and bookmarks?
I think they type in URLs. Or at least I do.
actually, in the middle east .net is the best domain to use apparently
Do you know why?
no, but it definitely shows with the success of my friends website http://www.iloveqatar.net
I think that could just be one case. Websites with .com URLs tend to do better.
Really great article that puts a lot of things into the proper perspective – thanks!
No problem. Hopefully my failures help you succeed.
I must say it is very informative tips (collected from your personal business life), few of those mistakes I have done also.
But, no more I am going to do the same mistakes.
Thanks for sharing!
As long as you learn from your mistakes, you should be fine.
Its all about ones CONTROL.
The question is : You are driving the Car or Car is driving you.
During my first few years, the car was driving me.
I think another business mistake to avoid is over paying on advertizing. You really have to watch your ad spending and be sure that the ads are producing results.
I think the main thing is tracking the results. If the ads are converting, buy as many as you can.
These are great points Neil. Over the years I’ve learned some hard lessons as well. I’ve found that it is very difficult to balance who to trust with not spreading yourself too thin (even if you’re only working on one business). The two biggest lessons I’ve learned the hard way were: 1)Be careful who you pick as a partner & 2)You cant do everything yourself. Both of these items require trust and humility which I find are often hard to dish out in the right amounts.
The partner one is really tough. I got burned the first few times, but I got lucky when I found Cameron Olthuis and Aneil Weber.
You will learn how to pick good ones over time. Make sure your business partner has the same drive you have.
Getting paid is the hardest part. I had a friend charge ME interest on the money HE OWED me. What a guy.
…what kind of logic did he use on that one? That sounds absurd to me. Sounds like you might want to stop considering this guy a friend.
I think the dude was just trying to get back as much of the money as possible.
RORL. I hope you didn’t pay the interest.
After years of chasing him down, the interest I “paid” ended up coming out of the principal owed. I was lucky to get any back from this guy.
Instead of rightfully getting the whole amount, or charging him interest – taking more years of effort, I will just never help him again, and spread the word of his scamming ways. Much easier, and more satisfying.
Just learn from your experiences and you will be fine.
Network 21, your not alone…I helped a friend during his hard time and he royally screwed me over when I loaned him a few grand which he needed to pay for his condo lease and bills…but from my understanding wasted on blow and some girl…2 years later he is on the right track, able to drive a new Mercedes but has no recollection of me lending him money…according to him, it was the other way around….what a friend – I know I should have got it in writing, but it was a friend so that thought didn’t come into my mind….but lesson learned.
WOW, that sucks. Some times you never know who is really a friend.
there are no friends in business, just rivals
There are friends. For examples my closet friends are my competitors.
Yes, a valuable(and expensive) lesson.
Sounds like you wern’t originally expecting the money to be paid back, at least not immediately. but when they’re driving around in a new mercedes and “not remembering” your generosity it’s a real slap in the face.
I think it’s best to set up a repayment plan, in writing.
Hi Everybody,
Nice to meet you! Neil, Great topics and Really useful content! COOL! A friend of mind turned me on to your blog.
As far as asking a “Friend” to sign a contract for a significant loan,(Right Now significant is anything above $500.00 bucks) If they are a true friend they will understand: Business Is Business! and especially in our economy and business mis-use of funds I would feel funny about NOT signing for a loan From a friend.
Kim
That’s right. A true friend won’t mind signing something. But even if they sign something it doesn’t mean they are going to pay you back.
Way to grow a backbone, Network21.
If that happened to me, I would be yelling at the person. Not sure if that would do any good though…
I just don’t understand the logic by doing something so idiotic.
Yelling would definitely be a good option.. So would legal threats
filing litigation against a deadbeat takes time and money…its also not free to go file at small claims court…I thought about something like that for my case, but $300 to file, and no proof on my end? seemed like a losing cause…plus the fact that I grew up through public housing meant that I would be facing a group of street justice minded people each time I was at a club…I got screwed and learned a lesson…life goes on…
Sometimes you just have to let it go and learn from your mistakes.
Too many people think with emotions which is what causes illogical thinking like this.
Thanks to Twitter, I found this post. And thanks to boring class time, I read it. Thanks for sharing.
You have to love Twitter.
I have always thought that the personnel is the most important part of the business. Unfortunately I have seen more often than not that the HR director is not exactly top notch and thus the company is plagued with turnover and low productivity.
I have had the “bad partners” thing as well – a hard lesson. Luckily it only cost me about $300 out of my 5k startup investment so it could have been a lot worse. I knew those guys for a couple years and worked with them daily, but once we started a venture I found out that 2 of the 3 weren’t good business partners.
I say screw getting an HR director. Do the hiring yourself until you need to hire a few people every month.
Great points – thanks for sharing, Neil. Your entrepreneurial experience is certainly unique.
I’ve been very lucky with receiving payment, thankfully. I did, however, create a real incentive for people to pay me on time – if they pay an invoice within 10 business days they receive a 10% discount (applied to the next invoice). If they neglect to pay for 1 month, interest of 10% is charged and compounded every 30 days thereafter.
So while it may cost me 10% to get paid quickly, it’s still better in terms of cashflow and avoiding non-payers.
MikeTek,
I like your idea on how “they receive a 10% discount (applied to the next invoice)”. I might have to borrow from that for future slacker customers. Hopefully I won’t have to.
Ideally you should be getting paid upfront for your work. You are a web designer… a lot of designers take money upfront.
That isn’t a bad idea, but when you start dealing with larger amounts and large companies, they won’t like it. They will want to do net 30 or net 60 payments. And if you tell them about a 10% discount, they will think you are jacking up your prices too high.
Neil. Great post. Especially your thoughts on keeping employees accountable, and just getting your product out there.
One quick question: Did you mean to say “worth wild” or were you trying to say “worth while.”
Keep up the great discussions!
Thanks, I changed it to “worth while”.
Great advice. Being young and in business I have already been through a few of these things, especially the not paying (was a very large company as well). It is great to have a place to read things I haven’t come across yet in business to make sure I don’t make the same mistakes. I am kind of spreading myself too thin now.
Consolidate what you are doing. Drop a few projects if you have to. Just don’t spread yourself too thin.
If you have to require your employees to clock in and clock out in this day and age, it sounds like there’s something lacking in your leadership style. If you treat your employees like children, they will behave like children. Furthermore, I struggle to believe that an entire group of developers conspired to screw you out of money and steal stuff from your company.
Based on these few data points, I would suggest that you spend some time reflecting on how you treat employees and how YOU might like working for yourself.
You are right. I am not the best manager out there. Maybe I should try and improve my managerial skills.
Ahhh Neil, chock full o’ uber goodness as usual . . .
BUT you left out some stuff! They cheated you AND wrecked your house? Not paying the invoices? Sheesh! What happened? How did you feel? What was the emotional reprecussions of your mistakes? I suppose what I am asking is about the psychological aspects of your mistakes. What it was like, how you overcame it and so forth.
Might I suggest a Part II? “How not to break a mofo’s legs when they cheat you and wreck your house”. Or “How to successfully not-choke people when they owe you over 100k”. It will be your most popular Blog entry yet.
Wrecked the house . . . DUDE thats like adding insult to injury! I think I would have waited 6 months and then went and found each one of them and punched them in thier penises. Hard. Many, many times.
I was upset and devastated. It was a big mess to clean up. When you are 20 or 21 and this kind of stuff happens to you, it hits you really hard.
I pretty much just made myself forget about it. It is the easiest way to make sure things like that don’t get you down.
Very helpful Neil. The particular mistake that bring people down is “Don’t spread yourself too thin”. Like I always tell my friends – no matter how talented or intelligent we are, we are still only human. Heck, even superman couldn’t be everywhere at the same time,
Thanks for sharing!
One of my friends told me that a lot in high school, but I didn’t listen to him. I wish I could turn back time…
Well, think about it like this, who you are, is because of what you happened to you in the last several years. You learned many lessons which is what made you as mentally strong today.
Ah, good point. I do love my past because it is what lead me to be who I am.
AJ Kumar is absolutely right with that one, Neil. I don’t think you would have become as much a success as you have become today if you hadn’t experienced all that you did in the past, especially the failures. So, yes, you are right too by saying your past is what has led you to be who you are.
Yea, AJ is usually right. He is a year younger than me, but he is filled with wisdom.
Interesting post Neil…I know what you mean about not getting paid. I was much more naive at the start of 2008 – had that happen quite a few times. I had one success in court which was an interesting learning experience- but still very stressful.
I made a similar post a while back about 9 companies I started which utterly failed if you are curious:
http://www.startbreakingfree.com/363/9-businesses-i-started-which-utterly-failed/
Thanks for the link. I will check it out.
Nice post. The challenge with getting your money from court is that it is a lengthy process and potentially costly in and of itself.
Yea, I don’t like the whole process. It is easier to let things go.
thanks for this post dude, I find it valuable reading what other people have been through.
The web is filled with people trying to give advice when they themselves have not been through the real deal.
Hopefully it helps you with your ventures. Best of luck!
Great post neil. as someone just starting out in the business, it’s good to learn the mistakes of people who have come before me so I can hopefully avoid them
If you need any help, let me know.
Thanks for the advice Neil. First time reader.
Don’t spread yourself too thin is a great strategy. Could you point me to a resource that would help me analyze opportunities? Maybe a short set of good questions. Often good questions generate good answers.
Another excellent tip about get the thing up and running. Very agile thinking that I could do more of.
I don’t know of a resource that can provide that. If you email me with what you are thinking, I can help you analyze.
best post yet. really helpful, thanks for sharing.
Deep, when you get a chance, please email me ways to improve my blog.
Thanks!
This is all great advice. Many of these things I have seen or been through before. I once ran my own business with some friends and it taught me a great deal. I never worked out financially but the lessons learned enabled me to learn and grow in ways that I never imagined.
I am not sure if you own a business right now, but if you don’t, you should consider starting one.
And do that quickly before you get too old…
Good point. The younger you are, the more risks you can take.
these are some great tips and something that everyone should listen to whether they are just starting a business or have had one for a while. Sorry to hear about your losses. That is quite a shame, but the fact that you have learned from them and can grow from this point makes them so much better. Thanks for sharing your advice with others.
I hate the loses as well, but without them, I probably be where I am today.
Why in the world would you buy some programmers a house to live in!??
Are they world renowned or something? I’m pretty sure that the internet is full of programmers that love to tackle big projects.
I wasn’t thinking straight at that time. It wasn’t their house, I was renting it to them.
If you need a collections agent, let me know man. I am crazy in a good way. I have done some collections for my uncle. Let me know man. Also, I will do it for FREE!
Can you collect money from people who don’t have any?
Well you can wait until they receive some. Everyone has money coming in. You can put a hold on their bank account, etc, etc
With the way the economy is going, I bet you are busy right now. It sounds like you enjoy it, too, judging by the big smiley. Which is sad, because while the “big boys” are getting bailed out, regular families and individuals are getting pain from the very people who their taxes help to bail out. Makes sense, right? Only to those at the top, I guess.
I don’t think anyone is happy with that. Some people don’t care, but a bad economy affects everyone.
But when they owe money to a lot of people, it gets complicated.
Neil’s eyes light up with the word ‘free’ lol
LOL, they do. Who doesn’t love free stuff.
Hey I’m the same way…lol..it’s in our DNA
Free stuff is the best stuff you can have. Nothing beats getting something for free.
Not only that but when you get something for free, it just seems and feels better. For example, when the chef messes up and the meal is free at the restaurant, the food just starts tasting better
I get what you are saying, but I rather pay for the food I ordered.
At Class today We had a presentation some well presidents of companies and he was talking about the mistake that many companies that hire people leave all the work to the HR department which is wrong. They should spend more time on the hiring process so they wont have problems. Another one said was ” Hire Slowly but Fire Fast”
I remember my Grandpa and my dad worked on a big project for a company and that guy did not end up paying at all. It was the worst time and it was not a small amount as well. It was horrible.
I am in a true believer in that saying. Keeping bad apples in your company can mess up your other employees.
Neil, Great article with plenty of useful tips for anyone who is just starting out in business to make use of. Also for the business entrepreneur’s who are making it big on the internet. I bought a blog back in April of 08 and had no idea what I was doing at the time. I knew a contract was a must and had several things added and prior owner seemed to know what they were doing, so I felt it was a safe document and that I was covered for anything that should arise. I am just now after almost 9 mths. later finding some relatively important articles that were never covered at the time of sale. I have plenty advice for anyone who is thinking of buying a blog, maybe I should write & publish something that will help out others that may be contemplating such a move. There are pros & cons to every business. Thanks for the useful information.
Hey JJ,
I would be interedted in reading whatever it is you publish on your experiece. Im loving this blog – thanks for sharing everyone!
Thanks for participating Tee!
Check out problogger.net and copyblogger.com if you already haven’t. Those sites should help you out.
Hey Neil
Certainly, it is difficult to find the right type of employees.
The best way to get good employees is to go to local networking events.
we study here something as ” HR” or ” human resources ” .. this help us much to choose the best employees
Yea, but that doesn’t always help. I think having an engineer hire another engineer is better than having a HR person hire an engineer.
very nice post Neil – For anyone considering accounting advice from the comments of this post as correct – you should definitely seek a professional with corporate entity experience before acting upon it
You should never try to save money when it comes to accountants and lawyers.
Wow.. making 7 figures a year will be my target in 2012. Most of the point here looks like you learned it from your experience.
By 2012, 7 figures won’t be as much as it is today. Hopefully that will make it easier for you to reach your goal.
I wish I could reach that goal much faster.
I am forced to comment on this, Atniz. Yes, you can reach your goal much faster. It’s not the GOAL that matters. Whether you reach it faster or not is dependent on YOU. If you want it badly enough and think day and night about nothing else but how to reach that goal, you WILL reach it. Trust me. I have been there and I know what it’s like to really want something so badly that nothing else matters. When you get to that point, you can get almost anything you can, as long as it’s within your grasp. To help you, I recommend you watch the DVD – The Secret. You will be glad you did.
I’ll have to check out the DVD.
Oh? You haven’t seen The Secret DVD, Neil??? Please make sure you get it and watch it TODAY! It’s that phenomenally powerful. Heck, even Oprah and Larry King absolutely loved it. My life changed COMPLETELY after I watched it. You will be glad you did, trust me. You can see the preview here – http://www.TheSecret.tv
Thanks for the link. I guess I will be watching it soon.
I never see TheSecret. Will check out this movie. Maybe, I should try harder.
It is still a good goal. Keep at it and you will get there.
Atniz, you can reach it. Keep in mind, a goal is simply that… a goal. Make sure you focus on and analyze your business plan, and find areas of opportunity within. Although the economy is in shambles, for the savvy business owner it presents a unique and incredible opportunity to take advantage and make serious profit. Find out where you can corner the market and make EMS companies about realize that your product is an absolute essential need for business!! I wish you great luck!
Damn that is quite a target. 7 figures won’t come easy. What do you do Atniz for a living if you don’t mind me asking?
Hi Vik,
I am supplier for EMS companies. My line is in electronic components.
You have a shot. Business to business sales is a good way to make serious dough.
Frankly, the business was good in 06/07. 08 is not that good and 09 still experimenting. A few of my customer (factories) shut down their operation and many lost their jobs. I hope the economy will be back on its glory tracks again.
It will, it will just take a while. Give it a few years and you will be back on track.
Neil,you’ve got great business experience you are ready to share,thank you.But whatever experience should be everyone faced the problem of collecting money and I sign under each word in the passage dealing with it.
Not everyone. Web based software companies usually don’t have a problem because they collect payment before they grant access to their software.
I have a few thousand dollars that are being held up by a company with whom I enjoy a good relationship otherwise. Except for whining is there any other persuasive way that you or AJ can think of to extract your own hard earned money? What will you do about company that owe you 6 figures would you just let it go or could you bring them to shame exposing them (of course as a last resort measure) online so that others would fear or be dissuaded to do business with them?
I don’t know of any other way… maybe collections?
As for the companies that owe me money, I would never expose them. I don’t believe in playing dirty. Remember if I do something bad to the company, it doesn’t just hurt the owners. It also hurts all of the employees who work there.
playing dirt is wrong but you have to look at the bigger picture, if you dont take action then who will?
they’ll keep screwing over other companies and in the end a lot more people lose out
Someone can take action, but that isn’t for me. I am a strong believer in karma.
me too , but what if you’re the one that’s meant to dish out the bad karma?
i used to think karma would always take its toll on people but sometimes you have to give it a little nudge
I don’t think that is how karma works. People who believe in it, don’t dish out the bad stuff.
Whatever your thought is, if you want to be successful, you have to follow the business laws–business is business, not friendship, not charity,just to deal with business.
Just make sure you don’t do unethical things that are legal.
sometimes ethics are more important than legalities however you should always remember to not let your emotions overcome your logic
I agree. Emotions can really screw things up… especially when it comes to business.
Neil, thanks yet again for for your great incite and sharing your experiences. These are some great tips to apply to any startup…
No problem. Best of luck with your startup.
This is great advice even if you don’t have a business that you are running. I have been finding myself being spread across to thin for like the past couple years with school and work, and whatever life I have between the two. Then knowing who you can trust and know that time is not on your side because even if you can plan something out something always pops up unexpectedly.
Make sure you change that. Stop spreading yourself thin… you can do something about it.
I agree 100% with your emphasis on making your employees accountable. Many shy away from this out of fear of :
a) not being liked
b) avoiding confrontation
c) being perceived as a micro-manager
d) don’t want to be held accountable themselves
. . . the reality is, if you want to be in the best position to create, recognize and capitalize on opportunities for positive and profitable outcomes, you must hold your employees and self accountable. Not to mention the benefits of being a respected leader and retaining key talent that won’t put up with the slackers limiting the company’s success. Great post. Take care, Chris Hopf
That is a nice comment but you also can’t give blame to the employee without taking a look at yourself. Because I have worked for a manager before that thought that all the employees were worthless and he was like a god. He would be quick to notice our mistakes but when he made a mistake or something that he really wasn’t suppose to we couldn’t say anything because he would snap at us.
If an employee screws up, it is always the bosses fault. As a business owner you are responsible for everything your employees do.
If they are getting paid, then they should be. In this economy, the employer can do almost anything they want.
Neil, that is a true statement indeed! The way that the economy is now really does give power to the employers that choose to take it. The desperation in the job market indicates that there are many competing for the same jobs. Employees must take this into consideration, and employers must hold both their employees and themselves accountable. If an employee refuses to work with the employer in kicking a bad habit, they are really shooting themselves in the foot. At the same time and as you said, if the employer fails to act on such an employee, especially in this economic environment, they really have to question their business model.
Just look at big profitable companies. They are firing people because they can get away with it in this economy.
definitely be careful who you trust.. a bad partner can make a potential success go down the drain FAST
It seems like you found a good partner for your art business.
I agree with 90% of what you have to say except the part about incorporating. The correct type of corporation is important, once you start making money. However, do not get bogged down with these kinds of details until you do. I have seen a few entrepreneurs fail because they spend too much time picking out office furniture, letterheads and corporation names before they start earning money!
Yea, you can also change your incorporation type after you start doing well.
I think sometimes before to start earning money it is necessary to pick out office furniture,letterheads and corporation names .Maybe all these tricks help them concentrate on business they are going to run.I think that’s a specific feature of their personality.
You don’t need any of that. I still don’t have that kind of stuff with most of my businesses.
i think your jumping the gun a bit there
Way too much. I don’t want to be negative, but what happens if the business doesn’t work out? You don’t want to waste money on things like office furniture.
I so agree with what you have here. I trusted the wrong person and it cost me big time. Sadly, if given the opportunity I would probably do it again!! I wouldn’t put all my eggs in one basket though, maybe the outcome would have been different.
It is a lesson we learned that makes us strong. I don’t think you will do it again. But, certain situation forces us to do.
It is. All of your mistakes will make you stronger as long as you learn from them.
Just keep on trying and never give up. You will succeed sooner or later.
I came here by accident and this post caught my attention. I am a struggling entrepreneur and the advise given here is excellent.
I intend catching up with your previous posts and take this opportunity to thank you for the excellent advise. Coming from someone who has obviously seen success and failure, this makes eminent sense.
Hey Nicole,
If I can be on any help, let me know. I do have a degree in accounting. So my specialization is in accounting. If you have any accounting related questions, let me know.
Vik, thanks for helping out! I really appreciate it.
No worries Neil. If I can help in any way, let me know. Also, check your email Neil
I haven’t gotten any new emails from you. The last one I got was a few days ago…
If you need any help, don’t be shy. I always enjoy helping others.
Hi Neil,
I have a handful of sites that yield a slight amount of revenue. As of yet, none of them are bringing in buckets of cash. Assuming I am working with almost a non-existent budget and no angels, what kind of revenue threshold would you think I should seriously think about incorporating myself?
Thanks,
Jason
I would incorporate after you make 5 figures in revenue.
Hey Neil,
Failures are the sweetness of life, how can you learn without them.
You can’t. That is why everyone needs at least one big failure in their life.
i thought you wrote this blog to make us avoid these failures?
i dont think everyone needs to have one failure to learn from it, we can learn from other peoples experiences too
I did, but you still need a failure. For some reason most people learn better when they fail.
I agree there is a grain of success in failure and on the contrary a grain of failure in success.
Good point. Even if you succeed you probably failed somewhere along the way.
Awesome. I am saving this somewhere easily accessible.
What’s better than learning from your mistakes?
-Learning from someone else’s.
Hopefully I saved you from making 7 mistakes.
Excellent insight, Neil. I’ve had a blog for almost two years now, but it is only in the last year that I have been treating it as a business. I haven’t taken it to scale like many of your businesses (no employees, I don’t consult for Fortune 500 companies, etc), but I have still learned some of your examples along the way.
I love the challenge of owning my own business – it has exceeded my expectations and I have learned so much along the way. I am a one man show (with an excellent extended network of friends) and I enjoy wearing each hat in my business. It’s good to read more from someone who has been there, done that.
Best of luck with your blog!
Thanks, Neil. I’ve been following the comments on this article, and it’s tough to keep up with the threaded comments! Good stuff though.
Thanks for subscribing to the comments. It has been tough for me as well, but hopefully it was worth it for you.
“Mistakes increases our experiences and experience decrease our mistakes.” Learn new things from your mistakes and i’ll care about this points. Thanks for sharing your experience.
No problem. I will try and share more that you can learn from.
The points are very correct and few currently occured with me …and i neglected it …but now i will have a strict look on it and make business better
Always try to improve your business and yourself. Sooner or later you’ll end up with a lot of experience under your belt.
Thanks for this post dude
I find it valuable reading what other people have been through.
There are some great tips and something that everyone should know while starting a business.Sorry to hear about your losses. That is quite a shame, but the fact that you have learned from them and can grow from this point makes them so much better. Thanks for sharing your advice with us.
Yea, I am sorry about my losses to, but as long as you can learn from them, it was worth it.
I have now been able to visit a number of your older posts and I am very happy to have found your blog. I do hope to see a lot of posts from you and on my part, I shall regularly visit and comment when I can.
I’ll make sure and write more content. Thanks for the encouragement.
Nicole, you are not alone! I’ve been making it my morning activity to read Neil’s older posts, as he really does provide some great advice and motivation! This post is no different!
Great post. I really struggled last year with my hiring process, spreading myself to thin, and I really realized that time is NOT on my side. But hopefully the changes I made this year will turn that around. Actually it already is.
I’m glad to hear that. Keep on chopping away until you feel that you aren’t spread too thin. Let me know if I could be of any assistance.
I will… thanks. You’re one of the few that I know that genuinely means that. Thank you.
That means a lot to me. Thanks for the kind words!
Great post, as always.
I have been following your posts for quite some time and have tried to take them into account before I started my site. Hopefully your tips / insight will have helped me structure the company correctly from the get go.
If you need help, let me know.
i’m new in this blog so i try to get your experience which you offer here .
nice tips and i hope i don’t fall in this mistakes as my blogging days is not much .
Welcome to QuickSprout. What I offer is free advice that will help you succeed in life.
@Money Academy: Hope you stay around too. But these tips aren’t just about blogging, but also business small, large, and medium.
Thanks for chiming in.
Anytime Neil. I don’t have the time to be apart of a lot of online “communities”, but I really like it here. So when I can…I’ll chime in.
Thanks! Let me know if you think there are anyways I can improve Quick Sprout.
The mistakes are usually called ”experiecce”,it is something which can not be bought in the supermarket or found in the street or given from hand to hand.I think having made mistakes puts you on the other energetic level one begins feeling the right way,though doesn’t know it is right.
I think it can be bought. Or at least to some extent. You can learn from other people’s mistakes by reading books.
Time isn’t on your side – boy I re-read that line 20 times and still didn’t draw the conclusion you had (I kept thinking – it takes time to build a great product or site). But yes, its not. Someone will come up with your Great Idea and pump a bunch o doh
into it.
A friend of mine and I created a Wiki together as a place to dump all our ideas. You would be surprised at the number that had to be moved to the “Someone else been there done that” category after some other company started offering that service or product.
dont dismiss those ideas that people have done, analyse your competition and better your idea to rival them.
Sometimes it is better to just do it instead of spending time on analyzing your competition.
Now you can change that. The next time you try to create something, do it as fast as possible.
I would add that it’s important to know when to drop a bad client. Time is money. It’s better to spend time finding good clients than it is servicing bad ones. Not everyone turns out to be a good client, and not every bad client can be saved. In the words of Kenny Rogers, “know when to fold ‘em.”
Ha ha ha John, that’s true. Some bad clients can be a real pain the neck working with. You are right, but I would add that one attempts a little bit to sway such bad clients to the right direction. If it fails repeatedly, then yes, “known when to fold ‘em.”
And if you don’t need the money, why go through the stress of dealing with them.
Well bad clients can hurt your reputation. Because of that I would never recommend servicing bad clients. It is always better to just fold.
Talking about bad clients, Jim Rohn’s mentor told him that there are only 9 or 10 real bad miserable horrible people in the whole world… but the thing is that they move around a great deal, that’s why we bump into them every now and then
LOL. People like screwing others over… what can you do.
“only 9 or 10 real bad miserable horrible people in the whole world”
only 9 – 10 people in whole world ? well the world will be very safe if only this much bad people remains out here …have seen many more then this …lol
Sadly I have seen many more as well. I think a large portion of our population is filled with bad people.
John, so true! So many times we get caught up in thinking we need the business and revenue, but in the end, bad clients make us dread the work. Ultimately that just leads to negative implications on business and profits and happiness can dwindle with negative attitudes that stem from bad clients.
Great post!
Any businessperson reading this would actually learn a lot. Who knows, I might be using this in the near future.
Thanks!
If you don’t have a business, you should consider starting one. There is no better time to start a business than during a recession.
I strongly agree with you on this point, even though it can be the hardest one to convince people of during an economic downturn. The outlook of “fear” and “caution” are so programmed in by the media hype of the recession that it can be nearly impossible for people to see all the opportunity around them!
Barbi
I think it is easier to convince people during a recession. The reason being is that a lot of people are out of a job.
Good point about the unemployment. Lots of opportunity to scoop up cheap real estate right now too for great investment properties a few years down the road. Have a great day, Neil!
Barbi
Everything is cheap right now. And if something isn’t cheap, you can bargain until you get it at a good price.
With regards to the ‘knowing who you are dealing with’; a;ways ALWAYS deal with professionals – they may cost a little bit more but they’re probably more efficient (in time) & support you better once the job has been completed.
I have got screwed by professionals as well. Just because someone works for or owns a reputable company, it doesn’t mean they won’t screw you over as well.
You are more then correct in stating that.
I speak from a property development perspective – professional institutions or recognised names gave me a better standing with other professionals in the industry.
Btw, the look & feel of the blog is great – where or what is the design?
It is a theme called “Thesis”. It costs money, but I think it was worth it.
Very true what you said about having too many projects going at once. It can be tempting to jump on every new idea you have and every new offer you get, but then your top priorities might suffer from lack of time or focus.
Danelle Ice (Homemaker Barbi)
It will. Someone told me in high school that I have a tendency to spread myself thin and I never listened to them. If I did, I would have saved a lot of time and money.
‘Something again from Robert Kiyosaki’s book “Cashflow Quardrant” – “Success is a poor teacher,” rich dad always said. “We learn the most about ourselves when we fail… so don’t be afraid of failing. Failing is part of the process of success. You cannot have success without failure. So unsuccessful people are people who never fail.
I agree. I don’t know anyone who succeeded without failing first themselves. It may not have been a big failure, but a failure none-the-less.
Agreed
Nothing else shows you the faults in your ways than a good & proper failure
That’s right. After the first one you will really take the time to learn from other people’s failures and appreciate the advice people give you.
Concentration on one subject is also right partly,it is good for a while,if one has two or three ideas on different stages of development is much better. The three projects will bring their profit in different times,this is called lateral way of thinking.
I used to have trouble with the “Collect your money on time†until I started sub-contracting out my bookkeeping. It is so much easier and they keep better records, send nicer invoices than I did. I went with FreshBooks but I am sure there are many others.
I didn’t know Fresh Books helps with that problem. I thought it was just an invoicing software.
I’ll have to check it out.
Really Nice Post. Thanks For Sharing Your Experience. Time is not on your side That’s correct “You have to Follow The Time”
Time isn’t on our side in 2 ways.
1. There is only 24 hours in a day. If we had more time, we could do more everyday.
2. As time goes on, things change. If we don’t change with the times, people tend to forget us.
Yes Neil This Two Ways are important and I Think It’s necessary to remember this to 2 ways.
AS far as I see, Neil, you are the best in organizing vivid discussions on unique topics,it takes much time no doubt time is on your side.Three cheers for you! Your blog is not like John Chow’s or Shoemoney’s ones.I think you are deeper! That is really great to investigate the things in details.
Thanks, but I think John and Shoe also provide a lot of value. They just do it in a different way.
Neil, I couldn’t agree more.
Little by little though, I can’t help but feel like the best way to go about things is to keep Business completely separate from your Personal Life.
It’s just that people take you more seriously when you are their boss rather than their friend. Friends let things slide or at least everyone expects that, but business is business. There’s money at stake.
It is, but it doesn’t always work that way. Personal stuff always gets mixed in even if you don’t want it to.
Neil, Thanks for sharing your experience.
Just an inkling thought, How do we know if we are really spreading thin or just losing out an opportunity. BTW, the problem with wrong decisions is that they always seem wrong at hindsight.
If you have more than 1 or 2 businesses and haven’t made much money yet, you are spreading yourself too thin.
I hope your employees are not coming late now. Do you offer any kind of reward points for your employees as well … just to get the best out of them.
They come on time now.
Neil, hi and thank you for that experience.
Do you mind if i will translate it to Russian language and post to my blog with all your copyrights?
Feel free to translate it!
Hi, ok, its already done.
If you will be interested in Russian part of the internet, feel free to contact me.
Thanks! If I ever want to enter the Russian market, I will contact you.
Great list of mistakes Neil. Getting the money right can be the hardest thing with a new company. By that, I mean collecting the money and avoiding losing the money from employees and in taxes.
Yea, taxes are a big killer. You should always hire a good accountant.
I especially agree with the be careful whom you trust part of your post. I have to say that you can quickly get burned. I certainly have…
Especially in this economy, there are tons of people looking to burn others. People need quick money.
Thanks for offering free help.Really all these mistakes counts big failure these definitely be avoid
Yea, they were really big mistakes. Probably the biggest ones I have ever made.
The problem with demanding the money up front is that the company you’re serving is also looking out for themselves – they want the goods and services up front so (amongst other things) if _you_ go bust they haven’t paid for something they don’t ever get.
Don’t you find that clients will just go with another offer?
I do take deposits, but not always, depending on previous relationship with the client.
No, you can get at least some money upfront. Just tell them how you have costs to cover and you can’t be in the whole.
everyting you said we’ve gone through. One of the things we have found to work well in our industry is to focus our market just on the things that will get us profit without much complications. Working on a system for months seemed to be good at first, but it turned out that we can make the same money by doing other projects we enjoy most and are less complicated.
It is important to “get there”, but we should see how we spend the time in the meantime WHILE we go there.
The non-complicated stuff is great, but it usually doesn’t make you as much money as the complicated stuff.
It’s all about the amount of risk you want to put in. The less complicated things might provide the same money short term, but often times it’s those larger, more complicated projects that build into your biggest assests.
A post that reminds me of so many events in my business life…Some of these even describe mistakes that I am recovering from as we speak lol!
Also, I have a very successful buddy who learned some things about taxes, corporations, and the irs the haaaawwwwwddd way.
So this look into 7 mistakes that cost you is definitely integral to helping us all learn how to deal with the ouchies that come with being an entrepreneur.
Great Content!
-Aaron B.
Just learn from them and don’t make the same mistakes over and over. That is what really killed me.
Ouch. I’m curious about what happened to your friend! The IRS is not the type of people you want to get on their bad side
Ok Neil, thats a lot of companies. But I think its most important to make sure you do your Due Diligence prior to discussing the actual selling of a dot com as a profitable entity.
Maybe its because of those very compromising photos that we’ve seen circulating around! lol
Yep, that is a big mistake I made. I never really did my due diligence.
Neil, you provided some incredible advice here. It’s really sad that so many companies were delinquent on their payments to you or didn’t even pay you at all. I’d venture to guess that none of these companies are still in business today though?
I especially liked what you said about making sure you don’t spread yourself too thin by jumping at every opportunity. That is very good advice for me, as I’ve done that on many occasions in the past and need to avoid doing so again.
Some are, but is the cost of doing business.
It is only going to harder from now on too. With he way the economy is going, more and more people are going to try and get over on each other,
Hi Dating,
I know you are probably right, because I am cynical by nature. I just don’t want to believe it. So much for Human Kind! So is the internet still an “undiscovered” country or the next frontier? Hummm!
Sadly it isn’t.
As Neil said, is isn’t and now since everyone has grown accustomed to getting things for free on the internet, I believe it will be all that much harder to capitalize and or monetize it.
Yep. Hopefully things turn around in a year or so.
Neil, haven’t seen you in a while on here… I hope you’ve got something profitable and exciting in the works!
Yea, I have been busy with my new startup. I will be doing a blog post tomorrow.
That is a good point Dieta. It is better to pay them a little more, but I also think its better to really be picky about who you hire as well. Utilize their references, and also treat them well. I know that this small food court spot in the mall I frequent went through employees like water. They said their manager treated them awful, so it goes to show. What person would continue to work hard if they are making bottom dollar and being treated like crap? Not many.
Solid post here. Trusting people is always dangerous when it comes to money. As much as it’s nice to be a good person, you never know a person’s motives and unfortunately, a lot of people out there are just trying to get the best of you.
Thanks! Hopefully I saved you from making some mistakes.
I can offer accounting help with UK businesses also, im in my final year studying accounting. so you can hit me up for free help in about 6 months
Thanks for the offer!!!!!!
Being in business for quite a few years myself “Time is not on your side” is probably one of the best advices anyone can give, now I’ve learnt to myself get things (even prototypes, demos) out there ASAP and start getting feedback, instead of waiting
It is all about making small changes that have a big impact on your business.
Love this old post. My fav is be careful of who you trust. Couldn’t agree more. Being a small biz owner who makes fortune cookies for a living the hardest part of my job is finding someone to do what I do AND TRUST THEM to do it.
You never know who to trust. I have gotten screwed by good friends.
My husband lost his business through some very silly mistakes but you know what? He learned from them and this seems to be accepted in the US but in the UK there is still a stigma about it.
Ah, I wouldn’t worry about it. They will forget about it over time.
This is the the thing that I needed to know about taxes. So making under $200,000 dollars a year profit you would want to go under a corporate C. I didn’t know it was that deep with taxes. The question I’m stuck with is who should I incorporate my business under.
Delaware. They are very entrepreneur friendly.
Thanks a lot Neil, you just saved me tons of trouble. I’m looking into them now
Just make sure you talk with an accountant and lawyer first. I am not the smartest guy out there when it comes to these type of questions.
One of the most important qualities to have along with what you mention above is perseverance. I am really amazed at the kind of effort you may be putting in replying to all comments that you get. I know its not a business but then you really want your blog to work and I feel similar kind of dedication is needed when one runs her own business.
That is a good one. Without perseverance I wouldn’t be where I am today.
Great tips. Have you heard of Eben Pagan? I was at seminar recently where he
said the way he manages 80 virtual employees is 1) to have a daily morning roundup
of what is planned by each employee for the day 2) at the end of each day the
employee lists what they have done and raises any issues etc. He also has 5
key metrics that he records daily eg sales / money out etc. It seems to work
as he makes $25m pa using these techniques
Re >>I started using project management software, like Liquid Planner,
and I made each one of my employees upload what they completed at the end of
each day. This way I could keep track of what each employee did.
We have incorporated this into Dooster our new online organising
tool for business admin and projects.
A project manager will be ale to tell at a glance how good an employee is at
dealing with their assigned tasks ie how late they tend to complete them etc.
This covers everything eg their returning calls to clients / suppliers and so
on. Most other project management tools only show a limited amount of history.
We show all the history – which makes a big difference. This is a great way
to find out who your real A B and C players are.
I haven’t, but even WordPress manages a lot of employees virtually. It is very doable for some companies.
Very good points, especially about getting paid before services are rendered. I can’t tell you how many companies have not paid me for my time. It is really frustrating too.
It can, so even if you are led to believe something, collect it up front. Learning experience nonetheless.
You are correct about the learning process. People can be very convincing and deceiving you at the same time. Collect up front always, especially if they are your friends!
Well, not necessarily ‘especially’, but in general, collect up front, and if they aren’t satisfied, have some type of money back policy. It shows professionalism, and also holds you accountable to provide fantastic results.
Making your employees accountable is a great way to improve your business. If they feel like the buck stops with them then they will be more likely to work harder and at a higher quality.
Accountability is actually the “key to success” because the more people who hold you accountable, the more “forced” you’ll be to get the job done.
Many of the above mistakes can be avoided if one is mature which comes with age and experience. What is the opinion of others?
Maturity does come from age and experience, but it can also come from learning from other people’s mistakes.
The inner workings of a business really make more of a difference than most people think. If you don’t structure your business right, it could crumble even if the other areas of it are strong.
There are way to many factors that determine whether or not a business stands. Like you said, 1 little thing can bring it down.
Thank you. Very inspiring. I decided I don’t want a real job anymore, and am determined to make it marketing on the Internet. It’s a trial and error process. Thanks again.
Good luck to you Ryan, it’s tough out there. I wouldn’t get rid of a 9-5 job unless you were making enough to pay your bills and then some, you know what i mean?
Collect your money on time.It is mission impossible sometimes.Sadly my firts SEO freelance back in 2005 is still unpaid.Months of work and no money.The deal was for about 10k US dolars.It was like:We can`t pay now.Next week?Ok no problem. I was too naive back than but I learned my leson.Get your money in advabce.
Yeah, it happens. 10k, wow! That’s a lot of money. You definitely a great example of why you should get it your money upfront!
For,really important point is “Dont give up”.But person should take some lessons from what he did wrong.Otherwise,you can just get nothing.Business life is a competition if person can not improve himself with failures,he will be become smaller.
Life is one huge competition and it’s more or less survival of the fittest. Focus on what works and stay away from what doesn’t, that simple!
I can definitely agree with the spreading yourself to thin remark. I’ve come to know the feeling when I try and wear too many hats that same time. It’s important to remember that one person is only capable of so much before you need to bring in some relief.
Sometimes it makes sense to wear multiple hats, other times you need to learn the art of delegation.
Very well post Neil. It is very hard for people to admit that they have made a mistake. However, admitting it just ensures that you won’t make it again.
I have made a few mystakes in past.Im happy it had happened.Im sure that it warned me enaugh so I could be more careful.
Good, that’s the most important thing and the best lesson to take from it.
Mistakes are bound to happen. Knowingly or unknowingly and learning from mistakes is called experience.
That’s absolutely true Arihant. Everyone will make mistakes sooner or later in life… it’s bound to happen. How you react to your mistakes is what’s important.
Its fact Neil, Quicksprout is really much informatic blog.
I too mostly visit it for the sake of knowledge.
Your way of reply to each comment is also much impressive.
Thanks Neil
Thanks Mehndi Designs… I like to provide my readers with information that can quickly apply in their business right away.
This blog has been such a great find – thanks for such great info! I so relate to the mistake of spreading myself too thin. In my first 12 months online so many ‘opportunities’ arrived in my inbox that I thought I needed to learn everything all at one. Sadly it got me nowhere fast! It took a while to find one thing that I enjoyed doing and stick with that. Now rather than looking at opportunities, I prefer finding gems like this that give you advice and share gems of experience.
Spreading yourself thin originally always looks or sounds like a good idea.. but really its just setting yourself up for a big fall.
Thanks Neil.
Steve Pavalina talked about business start ups in one of his blog posts. He mentioned letting a business idea get some traction, some results before worrying about entity type, even licensing….
I agree to a point. Timing is probably a key factor in determining business entity, but agreed, very important.
Your final point on never giving up. Thats big. If there were on characteristic that most all successful people, enterprises, and business start ups possess, it has to be persistance.
Reaching a number of points where I said to myself ” this is probably where most people would just quit ” was part of my first successful business. I have since worked at being at the front end, in the projection zone, of business. Its more peaceful, there are still surprises, but less extreme.
thanks for the great post.
The persistence someone has during their journey toward success is the “fuel” that helps them get there. Without the fuel, you’ll be stuck some where in between success and failure.
Everyday I am learning and motivate myself and hopefully I can achieve my target I wanted.
You absolutely can… you need to push yourself to your limits.
Yea whenever I do projects for freelancing I do a step payment plan. I will complete a process and I need to get paid or else I will not go to the next step.
100k not paid I would cry lol
lol… yeah that’s true but it’s different for different scenarios. That step program is a great way to protect yourself.
Your First Mistake was the one which everyone makes i suppose. Humans are damn greedy and too many opportunities don’t allow someone to think, all they want is to tap out as many as possible.
Practically it becomes impossible to be able to manage all of them, after all the age old theory, one task at a time will make it a success, comes in.
It happens to the best of us… but everyone just needs to realize that mistakes are simply a part of the game.
Just an inkling thought, How do we know if we are really spreading thin or just losing out an opportunity. BTW, the problem with wrong decisions is that they always seem wrong at hindsight….
If you find yourself on 4-5 different projects and not finishing anyone of them… your probably spreading yourself too thin. If you focus on the next venture etc… you may then be loosing a previous opportunity. Luckily… opportunities come and go so maintain your focus.
Its fact Neil, Quicksprout is really much informatic blog.
I too mostly visit it for the sake of knowledge.
Your way of reply to each comment is also much impressive
Thanks bud… if you take the time to comment, I’ll take the time to respond.
Thank you, my mom did something similar in business and gave it all away when I was studding in college I realized I could always learn specialized knowledge but it was the business expertise that would keep me in the game.
If you’ve been able to do it once, you’ll be able to do it again. True successful people can go broke and successful with ease.
OMG, I almost delay my product launching if I didn’t found this article. But trying to compare with yours, my main problem has no relation with perfection, I am just afraid whether it’s gonna have good response from the people or not.
Well that’s going to be a problem or issue anyone would have before they launch their “big” product. You really don’t know how it’ll do in the market unless you actually test it out first.
Money was my biggest issue
Well… you the truth is that it’s pretty much everyone’s issue. That’s what we’re are going after…
Thanks for this post, Neil. It jogged in my mind that we had not followed up on a receivable from one of our larger customers. Job now done. Many thanks.
Good for you, at least it was taken care of.
I wish I knew those things 15 years ago when I started my business… it would have save me thousands!
It probably would have made you millions
What an important article for new business people!
Yes, new and old. I found that many old timers were able to pick and choose some useful apps.
You see the power of a good blog like QuickSprout? I visited your blogtrepreneur.com blog and enjoyed the posts I found there. By the way, you have good posts and I even commented on a few. Keep posting good stuff, Adam.
Thanks for calling QuickSprout a good blog.
That’s fantastic. As long as your learning about what it takes to make something happen, I know I’m on the right track.