It was the late 90s and I was still in high school. I had started a business that took scratches off compact discs, DVDs etc. My customers ranged from a NY Times reporter, to a Hollywood producer, to individuals and video stores all over the country. The entire operation was being run out of my bedroom in my parents house. The amazing thing I learned was that people could care less.
I eventually sold the business because of how labor intensive my poor quality machine made the process. I would often have to redo the work many times, and I just got sick of it. Plus, digital music had just come out and I saw that digital files would probably one day render discs obsolete and kill the business. Though the business didn’t turn out the way I had hoped, the experience wasn’t wasted. I learned some very valuable lessons 15 years ago that are still helping direct me today. Here are seven of those lessons.
1. You don’t need a physical storefront. The marketplace is changing. Every year that goes by, people are becoming more comfortable purchasing goods and services online. If you are spending thousands of dollars per month on a shiny storefront, then you are probably charging your customers too much. Why? Because people want to save money, and they would rather not have to pay for a shiny store. (expenses will always be passed onto them) I operated a business out of my childhood bedroom. People could care less where you’re based out of (in most cases), as long as you produce a quality product at a good value.
2. Value your customers time. If you don’t, you will end up with no customers. People have extraordinarily busy schedules coupled with ten thousand distractions. If your business doesn’t value their time more than your competitor does, they will leave you. Time is money, and often is even more valued than money. People stopped going to Blockbuster video because Netflix valued their time more. (offering a less expensive product also saves people time)
3. Let people stay home. Don’t require your customers to come to you or your store. If you offer a service, start offering it remotely. Soon everything will be delivered. As delivery becomes normal for a particular industry, anyone not able to profitably deliver their product will be out of business. The same goes for services. Eventually things that used to be done in person will be done remotely. Even health care is moving in this direction. Refuse to change and your competition will put you out of business.
4. Make things simple. If things are complicated, people will go elsewhere with their business. My disc website had three pages: services, pricing and an order form. You need to make your product or service as easy to access as possible. Sometimes you have to work really hard to make things simple, but it’s worth it.
5. Produce a quality product. It’s easy to get a customer the first time, but it’s much harder the time after that. You must deliver a high quality product or it will kill your business. If I didn’t return a customer’s discs in a timely manner, no further discs would arrive in the mail from them. It was like magic. If you don’t produce a quality product in a timely manner your customers will disappear.
6. Save people money. Figure it out. Use the power of your imagination and creativity to figure out ways to save people money. Reduce your overhead as much as possible. Reduce expenses by cutting out services that people don’t want.
7. Get customers first. Find a need that isn’t being met adequately. Then, before you build an entire business around the concept, go get some customers first. This is what I did with the disc repair business and it worked great. On many of my other ventures, I didn’t follow this advice and I’ve wasted a tremendous amount of time and resources only to find out I couldn’t get any customers.
Some of the points on the list above I learned by accident. Most I learned the hard way. I think it wise for a person to not only learn from their own mistakes, but from the mistakes of others. Hopefully this list will help keep you from learning some of these lessons the hard way. Best of luck with your businesses!
What business lessons have you learned the hard way? Do you have any tips that have really helped your business?
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