Ragged Riches

When it comes to being an entrepreneur, having a dream is just not enough to make things work. You need to have a good product (or service) to sell, the right mindset, and the right knowledge to make things work.

I truly believe that most people can make a business work, but only under certain circumstances. Remember, it’s a well-known fact that 90 percent of businesses will fail before their 15-year mark. You need to be doing quite a bit right to make it past those years.

As a person who’s had a writing company and blog for tons of years, I noticed what makes and breaks companies. These, in particular, are the worst offenders.

#1. Your product costs a lot to make, but you don’t have a lot of funds.

Oof-da! This is the worst mistake you can humanly make and it’s also one of the most common. You need to have enough money to run your business without a profit for at least two years before you actually begin—at least, in high-cost industries.

If you don’t have enough money to run your business for at least a year, your budget is too high and you will end up taking out loans you won’t be able to pay back. Do not start a business in hopes of getting an investor to push it along. Investors aren’t saviors.

If you can’t do that, take out a loan and work with partners who are very experienced in your field. Listen to the person who has more experience. More often than not, they can guide you when you don’t know what to do.

Some of the most promising companies I’ve seen ended up closing shop because they kept banking on an investor who never pulled through while burning the candle at both ends. Those that had partners often scuttled them away, refusing to listen to advice that could have saved the company

Your best bet as a baby entrepreneur is to start small, lean, and clean. Instead of renting a factory to make bread, start baking at your own home and let word of mouth get out. Instead of diving head-first into car dealership work, start by flipping cars off Craigslist to see if you have a knack for it.

#2. There’s no real rhyme or reason to your business.

I had one friend who wanted to start an art gallery. So, of course, she opened up a legal assistance enterprise that also had a modeling school attached to it. The art gallery and modeling agency did not go anywhere.

Truth be told, that business was a ball of chaos for a while. I worked there as a modeling instructor. During that time, I saw…

• My friend get kids who belonged to construction workers to be babysat by me while she did her taxes.
• The office adopt a stray cat that kept having kittens, and the office also buy a duck from the back of a truck. (I’m okay with this, but this gives you an idea of the chaos that was there. The cat pissed on a wall and sparked smoke. Me, her, and her kid all had to line up out of the building with a cat, a duck, and a kitten in our hands while they explained why the smoke was coming out of an electrical socket.)
• The taxes and paralegal work took center stage, but I was quickly trotted out as a “social skills” teacher. This is awkward because I am on the spectrum.
• The school portion became an accredited construction work certification company.

Yep, no gallery in sight. Had my friend not gotten a mentor and ally who offered them commonsense advice, her place would’ve shuttered being neither a gallery nor a tax place. Most other places that I worked like that ended up closing not too long after.

#3. You’re not actually *doing* anything.

How many friends of yours talked about starting a business, only to do nothing with the idea? If I had a dollar for each time I saw people talk up a business (and sometimes even go so far as to buy supplies) only to do nothing, I’d be able to pay my tax bill for the past five years.

Some of my former friends had the funding and connections to kickstart businesses that would have easily cleaned house. They did nothing with it, even when I begged them to. It was even their idea. I just needed them to start it so I could earn money at the time.

As of right now, their connections soured and their funding evaporated. Inaction is the mortal enemy of progress. This is just as true with business as it is with politics. The window for that business opportunity has also closed.

A good rule of thumb is not to indulge people who say they’ll start businesses only to do nothing.

#4. Your partners or staff members are inept.

I’ve seen a lot of good business owners have employees that couldn’t guide their butts out of a paper bag. All of those business owners kept those employees on until the business tanked. A business is only as strong as its least capable and reliable employee.

Employment is a major investment. Don’t keep people on just because you feel bad. Conversely, there’s a mirror opposite side of this that other managers make the mistake of.

#5. You don’t listen to employees who are highly skilled in their field.

The converse of point #4 is that employers absolutely should listen to employees who have a past track record of success. If you don’t listen to the people who have years of experience or are actually seeing the issues in your company from the ground floor, you are going to have a bad time.

Contrary to what many entrepreneurs believe, most employees care what happens to the business they work for. A dead business means they don’t get paid, either! Besides, working for a defunct business is never a good look on a resume.

If all of your employees are begging you to listen to them about an issue, please listen to them. There’s often a good reason why.

#6. Your product sucks.

It’s possible to sell a bad product and still keep afloat. However, it’s nearly impossible to sell a horrible product and keep afloat. Even with the best skills in the world, a bad product will eventually get a bad reputation.

That’s precisely why hair companies like Monat are struggling right now. When you have lawsuits that involve people’s hair falling out, others will take notice. The same can be said about those stupid 5-on-1 luxury buildings. We all know they’re poorly made and overpriced. No one wants them anymore.

#7. The product or brand you have is a “flash in the pan” type of deal.

Does anyone else remember when vaporwave took over the internet? I do. There were about 50 different companies all showing designer vaporwave gear, trying to show they were the “hot guys on the town.”

Now, there’s only about two left. Both of those companies also expanded from vaporwave to synthwave, outrun, 80s nostalgia, and A E S T H E T I C subcultures. They’re also present at almost every major internetcore show you’ll see.

The others are gone. Because you really can’t grow a business on a trend that will die in six months. If you’re not thinking long-term, you are going to fail.

#8. You’re disorganized.

This is what ended up causing me to almost shutter my business. I was disorganized with taxes and filing. I am still paying for that lesson today. Investing in organizational software, planners, and more is a must if you want to stay afloat.

You can have the best possible products out there, but if you’re so disorganized that you can’t hold water, you will be in trouble. Take it from me. Organization and planning are key.