7 Business Mistakes That Nearly Broke Me… Literally

homer simpson d'oh

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.

Download this cheat sheet and 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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Comments

  1. 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!

        • Articles Spinning :

          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. πŸ™‚ I love it!

        • 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.

  2. 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.

  3. Vince Blackham :

    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 πŸ™‚

  4. 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.

  5. Manisha Shahane :

    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.

      • Manisha Shahane :

        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)

          • Manisha Shahane :

            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.

  6. Phelan Riessen :

    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. πŸ˜‰

      Hit me up the next time you are in the OC. We should meetuup.

      • Phelan Riessen :

        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.

          • Phelan Riessen :

            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.

  7. Franki Nguyen :

    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. πŸ™‚

    • 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!

  8. 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.

  9. 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

  10. Tom - StandOutBlogger.com :

    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.

  11. Aman@BullsBattleBears.com :

    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.

      • Aman@BullsBattleBears :

        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.

  12. 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 πŸ˜‰

  13. Really great article that puts a lot of things into the proper perspective – thanks!

  14. Professional Lab :

    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!

  15. HOBO(nickname) :

    Its all about ones CONTROL.
    The question is : You are driving the Car or Car is driving you.

  16. Credit Card Offers :

    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.

  17. 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.

  18. 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.

    • 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.

    • Aman@BullsBattleBears :

      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

      • 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.

      • Kim Williamson :

        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.

    • Jquery Slideshow Scripts :

      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…

        • Jquery Slideshow Scripts :

          I just don’t understand the logic by doing something so idiotic.

          Yelling would definitely be a good option.. So would legal threats πŸ˜›

          • Aman@BullsBattleBears :

            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…

          • Too many people think with emotions which is what causes illogical thinking like this.

      • Premium Links Directory :

        Surround yourself with positive people that will go to battle with you. You win as a team.

  19. Dan Massicotte :

    Thanks to Twitter, I found this post. And thanks to boring class time, I read it. Thanks for sharing.

  20. 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.

  21. 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.

    • Phelan Riessen :

      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.

  22. 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!

  23. 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.

  24. 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.

  25. 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.

      • Neil, this blog is something that i will keep reading all over my business life, soo helpful and accurate, its not about content writing stuff, its real time life saving tips you came up with (and always do).

  26. Articles Spinning :

    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, πŸ™‚ 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.

          • Articles Spinning :

            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.

  27. StartBreakingFree.com :

    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/

  28. Sean Nieuwoudt :

    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.

  29. 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 πŸ™‚

  30. 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.

  31. best post yet. really helpful, thanks for sharing.

  32. Miguel Salcido :

    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.

  33. 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.

  34. Jquery Slideshow Scripts :

    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.

    πŸ™‚

  35. 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! πŸ™‚

  36. 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.

  37. jj-momscashblog :

    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.

  38. Hey Neil

    Certainly, it is difficult to find the right type of employees.

  39. 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

  40. 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.

        • Articles Spinning :

          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.

        • 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.

  41. 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.

  42. 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

  43. 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.

  44. Neil, thanks yet again for for your great incite and sharing your experiences. These are some great tips to apply to any startup…

  45. Custom Silicone Bracelets :

    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.

  46. 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

    • Custom Silicone Bracelets :

      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.

  47. definitely be careful who you trust.. a bad partner can make a potential success go down the drain FAST

  48. 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!

  49. 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.

  50. 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.

  51. 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.

  52. Jason Bartholme :

    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

  53. 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

  54. I agree there is a grain of success in failure and on the contrary a grain of failure in success.

  55. Awesome. I am saving this somewhere easily accessible.

    What’s better than learning from your mistakes?
    -Learning from someone else’s.

  56. 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. πŸ™‚

  57. Custom Web Design :

    “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.

  58. 4x4 Pickup trucks :

    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 πŸ™‚

    • Always try to improve your business and yourself. Sooner or later you’ll end up with a lot of experience under your belt.

  59. Motorcycles for sale :

    Thanks for this post dude πŸ™‚ 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.

  60. 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!

  61. Ken @ Work From Home Secret :

    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.

  62. 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.

  63. Money Academy :

    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 .

  64. Kenney and Kim :

    @Money Academy: Hope you stay around too. But these tips aren’t just about blogging, but also business small, large, and medium.

  65. 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.

  66. 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 πŸ™‚ 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.

  67. 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.”

    • Articles Spinning :

      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.”

    • Well bad clients can hurt your reputation. Because of that I would never recommend servicing bad clients. It is always better to just fold.

      • Articles Spinning :

        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 πŸ™‚

        • LOL. People like screwing others over… what can you do. πŸ™

        • Big truck trader :

          “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

    • 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.

  68. 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.

      • Danelle Ice (Homemaker Barbi) :

        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.

          • Danelle Ice (Homemaker Barbi) :

            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.

  69. 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?

  70. Danelle Ice (Homemaker Barbi) :

    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.

  71. Articles Spinning :

    ‘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.

  72. 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.

  73. I used to have trouble with the ΓƒΒ’Γ’β€šΒ¬Γ…β€œCollect your money on timeΓƒΒ’Γ’β€šΒ¬Γ‚Β 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.

  74. 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.

  75. 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.

  76. 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.

  77. 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.

  78. ZK@WebTrafficROI.com :

    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.

  79. 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?

  80. 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.

  81. Underarm Sweating :

    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…

  82. online social networking :

    Thanks for offering free help.Really all these mistakes counts big failure these definitely be avoid

  83. newport website design :

    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.

  84. 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.

    • Martin Fister :

      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.

  85. 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.

    • Martin Fister :

      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 πŸ™‚

  86. 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

  87. 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.

  88. 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. πŸ™

      • 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.

  89. 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.

  90. Martin Fister :

    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.

  91. Meeting rooms :

    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

  92. Interview Questions :

    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

  93. 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.

  94. paula harrison :

    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.

  95. The Work At Home Blog :

    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.

  96. cash loans uk :

    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.

  97. 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.

  98. Online College :

    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.

      • Online College :

        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.

  99. 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.

  100. Arihant Kothari :

    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.

  101. Portland window cleaning :

    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.

  102. 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?

  103. 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!

  104. Sınavlar :

    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!

  105. How to WordPress :

    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.

  106. Ishan@ILoveFreeSoftware :

    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.

  107. 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.

  108. 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.

  109. Mehndi Designs :

    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.

  110. 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.

  111. 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.

  112. lung cancer survival rate :

    Everyday I am learning and motivate myself and hopefully I can achieve my target I wanted.

  113. 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.

  114. 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.

  115. Sâzlük :

    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.

  116. 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

  117. Textbook Rental :

    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.

  118. 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. πŸ™

    • 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.

  119. Voyage Montreal :

    Money was my biggest issue

  120. 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.

  121. Dr. Michael Haley :

    I wish I knew those things 15 years ago when I started my business… it would have save me thousands!

  122. Dr. Michael Haley :

    What an important article for new business people!

  123. Man Neil….. Just going through your pages of course picking up some SEO info from you….
    #2 for Business Mistakes on this article…. You kill it man!

  124. Getting Ranked on Google Guide :

    Neil you said you should only pick an LLC when you’re making 200,000 dollars plus, but if you pick LLC and get taxed like a partnership – you get taxed only once and it’s not as bad as a C Corp.

  125. No problem, I suggest you do the same with the people you talk to.

  126. Danail Donchev :

    I took your advices from this articles over a year ago and thank you very much.That’s the way to manage a business.

    Regards

  127. In business you can learn a lot as you go. Best of luck and hopefully you are successful.

    • Thanks Mike.. mistakes are amazing, fun, and something I look forward to. If I make them early on, I can rest assure that I’ll have a stronger business later.

  128. Time is money, money is time – Great advice!

    Great blog

  129. Watch Season :

    Wooow $100k lost just like that. How much would it cost to hire somebody to get the money out of them legally? Probably not worth it in US.

  130. Some very good advice, thank you…

  131. Jeen Hao | Earn Money Online :

    The points are solid enough. Indeed these are mistakes that we have to avoid, or else we might face a lot of difficulties or even fail in internet marketing…

  132. I think making a few mistakes along the way is no bad thing as long as you learn from them and the great thing is Neil, is that as someone who has a pretty good reputation yourself, you have no worries about putting this out there so that others can see that you too have made a few wrong turns along the way.

  133. And always stay true to your word. If you find a partner that you want to work with then stick with them regardless of whether you or they came up with the opportunity. If you say you are partners then you are, full stop.

  134. Thanks for the Liquid Planner link, that’s a great idea.

  135. Not everyone turns out to be a mannered client, and not everyone bad client can be saved.

  136. George Thistle :

    Really good advice – thank you.

    The rules are slightly different in the UK regarding incorporation, etc, but this is all still totally valid

  137. Buy Facebook Fans :

    Great Article Neil – you ARE kind of a big deal, lol. A few of the things plague me in my own business, and while they haven’t become a major problem yet they need to be corrected before they do. I’d say the biggest is collecting payments on time. I always give people a little too much leeway to make payment which ends up costing me in time at the end…if time is money then I’m losing out. The other would be spreading myself to thin between multiple projects and the result ends up being some of them suffer or none of them get done as best as they could have if I’d focused on one, carried it through before I moved on to (or outsourced) another.

    • You need to become a stronger person and bring out the hammer. Remember to provide amazing customer service, but at the same time, you’re working for someone and you’re doing it for a paycheck. Be straightforward and upfront.

  138. “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 wonÒ€ℒt help you much if the company doesnÒ€ℒt have money.”

    LOL!! πŸ˜‰
    I think western world is well civilized when it comes to recover money. If above sentence was said for India the I would agree but it doesn’t well suits for Western world or does it?

    I’ve been doing business in the UK for past 6 yrs and I tend to not to accept money upfront. There have been few instances where I ended up dragging clients in the court but at the end all money was recovered.

    Contracts work very well too. A written document is all what it comes down when you have to land in the court. So I would recommend to always have a contract written down signed and saved safely electronically as well as on paper. Not to mention keep the e-mail communication with client as well.

    I fully agree with bankruptcy part. When companies go bankrupt you can’t do anything.

    May be I’ve been too lucky or had good clients!!

  139. hi, I agree with you on this points.. business requires a a time and we need to make to sure about we never make mistakes.. having started a business, I also committed lot of mistakes, the point is that.. we need to learn from our mistakes, and never repeat it again.

    • It would be great to not make any mistakes, but the truth is you will.. and that’s great. Making mistakes help you grow.

  140. Do you have the same types of incorporated company in the states? i.e. Limited and Public limited, or do yo uhave more than this?

    • It varies from state to state, so I would always check with a lawyer before you make any decisions. You can also speak with a company like legal zoom.

  141. Very nice post and right to the point. I don’t know if this is in fact the best place to ask but do you people have any ideea where to get some professional writers? Thx πŸ™‚

  142. Singapore SEO Guy :

    I got myself in into point 1 (DonÒ€ℒt spread yourself too thin) and point 3 (Be careful whom you trust), although at the lower scale compare to yours.

    Now that my business is in a position to hire people, point 4 & 5 seems to be hitting me now.

    I’m in the middle of developing a social review site, and point 7 is surely on the card. Time is definitely not on my side.

    I always tell myself if only I have a mentor who can guide me, I would not have got into the sort of business mistakes that I made. I’m starting to fall in love with this blog!

    Excellent real life business advices.

    • I think what can really help you would be to find a mentor you trust to advise you. I know that’s helped me drastically. You’ll also get a different perspective, because it’s to easy to get caught up.

      • Singapore SEO Guy :

        I would love to have a mentor to “guide” and offer a different prospective. However, I do not know of many people in the online / digital world that can offer me advices – That is my biggest challenge.

        In your opinion, does a mentor needs to understand the field that you are doing? If not, what you are getting would be generic business advices right?

        • Yes, a mentor should be someone who is doing or has done what you’re trying to do. If you don’t many people that are doing what you want to do, then go out there and find them ;). Hit up mixers, seminars, etc.

  143. Jack Johnson :

    I’ve read a few of your posts now and quite honestly, I think that you are a fucking idiot, and that your employees must be miserable. It seems like you treat them like children. Furthermore, your grammar is atrocious, and I am shocked beyond belief that anyone would ever give you a loan or invest in any company you had started. While some of your mistakes are classic, most of your advice is either copied from other blogs or the worst advice that I have ever read. I would end this with a statement telling you to go to something else with your life, except that I cannot imagine a single thing that you would be good at. Cheers.

  144. “Dont Spread Yourself Too Thin” – great point Neil – couldn’t agree more. This was a lesson I learnt very early in my career (the hard way). Always good to see the “pros” sharing their knowledge online. Keep it up.

    • It’s a problem that everyone faces… even me πŸ™‚ But sooner or later you start to realize it quicker.

  145. Mr. Rechnung Bezahlen :

    All youve written is so true…

    Especially the part about who to hire as an employee. I really had bad luck with some employees. And i didnt got paid too – after half a year without payments you shouldnt expect anyone to pay.

  146. cholesterol lower diet :

    Pretty good post. I simply stumbled upon your weblog and wanted to say that I’ve really loved reading your weblog posts.Any method Ailing be subscribing to your feed and I hope you post again soon.

  147. It’s sad to hear from your experienced, yes I agreed with you what matter you had done you cannot depend 100% on your staffs, keep watching and involve even small things in your business !

    • Yeah, integrated them into the business is the best way to improve productivity, and a team spirit.

  148. Microsoft Contact Management Software :

    We all made mistakes, and it’s a normal part of life. The only thing we’ve got to master is how to make use of our own mistakes in order to strengthen as up. By the way, about what you said at “Be careful whom you trust”. It is really hard to trust someone else in business. You don’t know which one should you give in and which one shouldnt. Great post Neil.

  149. Don @ Social Profit Formula :

    Making mistakes is absolutely fine as long as you learn from them; if you think that you aren’t making mistakes then you’re probably aren’t doing anything. For me mistakes are additional motivation, after I have done something stupid I have a tendency to work twice as hard to make up for my mistake, taking the responsibility also helps, back in a days I used to blame it on somebody else but me, but that wasn’t helpful, after I started accepting the fact that I was responsible for that and it is my job to solve it, things seem to improve significantly.

  150. Malignant Hypertension :

    Wow, I hope you donÒ€ℒt get bombarded with requests for too many free advice, LOL. Anyway, just kidding. But seriously, thatÒ€ℒs very generous of you to give free accounting help. I am sure lots of people will benefit from your help. ThatÒ€ℒs spreading very good Karma, by the way. I love it!

    • Thanks,
      I don’t mind giving advice. I try and help when I can and hope people will benefit from it.
      I appreciate the kind words. And hope you were able to benefit from it as well.

  151. Spreading myself too thin I think is my biggest weakness. So many ideas, I want to tackle them all at once. Still learning to prioritize.

  152. Nice article on collaboratoio tools thank you very much, consider http://www.kpi.com as well

  153. Best Make Money Online :

    These are very good warnings and also very humanizing of you to show us how you are doing whatever possible to learn from your mistakes and help others avoid at least those if possible.

    • Awesome, as long as you’re learning about what to avoid and what it takes to make something happen I am happy.

  154. Amazing post Neil. It’s really motivating.
    You said that some companies still owe you over 100k$. How would you give them 100k$ services without getting paid for any?
    Yeah that was a hell of a mistake;)

  155. Online Mastering :

    “spreading yourself too thin” certainly deserves the top spot. narrowing my services and focusing on mainly one of them was the best choice i ever made with my business

  156. Not getting paid is unfortunately one that I had to deal with recently…this one is especially bad when you are really in need of the funds to grow your business..trust me, I did not have to pretend to whine…I was whining for real…did not work!

  157. Thank you for this sharing Neil…Many entrepreneurs do not want to share their mistakes but keep them secretely

  158. Mirko Ceselkoski at TrainBodyAndMind.com :

    DonÒ€ℒt spread yourself too thin was my initial mistake….I shave sold many sites to concentrate on a few ones and make them authority, but I’m still struggling with this issue!

    So tempting to start something new and add it to your daily problems and duties :))

  159. Thx for the C Corporation tip. I filed as an LLC because I assumed that was for small businesses…

  160. After Reading this one…I will not wait to implement my ideas. I will just go ahead and start with my the plans I have in mind and with the planning I have done already.

    Thanks for sharing the insightful experience…

    I hope none would mind If I talk about something I learnt :

    As an entrepreneur at young age we all are a little lenient on employees because we want them to work like us: “Dedicated by will and not by force”.

    I was 17 and running a manufacturing unit with 30 people. We made Hand-Crafted Designer Leather products. All can see the website and understand that it is a very creative job to do(www.stalliontack.com)….

    I was not able to discipline the employees to be punctual and regularl and at the same time give them their Artistic liberty. I was way young and too inexperienced than most of them(they had children same as my age). To make the company more disciplined I took the following steps:

    – I made sure that I was always on time and regular

    – It was a rule for people to come in my office and sign their attendance.(they were proud artists and did not liked that it comes to the notice of their boss that they are not punctual)

    What you think I learnt from this experience ?Most will answer that i learnt ‘How to make people come on time for work’ but thats not entirely correct. I learned a deeper lesson :”Know the people you work with”. If I know them then It gets easier to gets thing done from them. So making them come on time is a very small objective to accomplish.

    I like to know every person I work with and who works with me at my compnies. I insist my managers to have a professional cum personal relation with their subordinates.I have been helped a couple of times financially when My company Was going through a “Lean Period”.

    I count my biggest success as a Entrepreneur when I was running my leather work factory a litle too tight on Money and my employees took Personal Loan to help the company.

    A strong belief in what you are doing should always be there.It is the Job of the Leader to do so.It is easy in a small enterprise like mine to instill this pride.

  161. RichPeopleThings :

    I like the tip on spreading yourself too thin. I used to do that but now I concentrate on one venture at a time.

  162. Online Business :

    Great advice for everyone. Thanks for sharing your Exp.

  163. If your business is struggling try getting some advice before its too late

  164. Anyway, I will figure it out. IÒ€ℒm sure there will be times when I have the Ò€œdohÒ€ moment.

  165. Neil,
    Haven’t used liquid planner, but currently working with Exepron for critical chain project management – also in the cloud. Would be interested to know if you’ve used them or have an opinion.
    Jeff

  166. It is true that unless the entrepreneur himself does not take interest, the business is going to be doomed.

    However this handicap can be overcome by using the delegation technique with accountability and you should be ready to accept some element of error and avoid zero error syndrome. Better make use of the Pareto’s principle or better known as 80:20 rule.

    Regards

    • I have always followed that rule. It’s all about finding people with the right expertise to help do the things that you aren’t the best at. Great minds working together can achieve great success!

  167. Great post and contains more useful information. nice to read this article.thanks for sharing this article…

  168. Neil

    Thanks for sharing your ideas. Indeed they were very useful.

  169. Jeremiah Ngalla :

    Thats a great article, touching the most common business setbacks. With this information the next startup does not have to start from scratch!

  170. Hi Niel,

    I am a SEO- Executive in a company. Mujhe apki life ki ye biogarphy read karke bhut motivation mila h. Recentely my company ne 10 employees niklaal diye h β€œye bolkar ki hum off-page task close kr rhe h”. Sabhi bhut depration me h. Maine apki ye biography unke sath share ki h..So they are motivated now.

    If you have any suggestion for us for the future planning. Please share with us.

    Kind Regards,
    Avtar Singh
    Chandigarh

  171. I think go to market without perfection is the best advice. There is a saying “Don’t let perfection be the enemy of good”

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