I had a friend who was a budding entrepreneur while I was in my twenties, and he had such contagious excitement for beginning his own firm that I was frequently convinced to join him in his ventures. We never became the billionaires we thought we could be for some reason we didn’t realize at the time and looking back now, I can see why.
Because we both worked in the automobile repair sector and knew the market, all of our company ideas revolved around trading in used cars, therefore that wasn’t the reason we failed. But now when I think about what we didn’t do, I see why we did. So, here’s the story of our failing business, in the hopes that you’ll realize where we went wrong.
It would always begin with a phone call from one of my friends informing me of a car that the main buyer at the used car lot where he worked had discovered for a low price that we could purchase. We’d combine our funds and buy the car, then spend the following week cleaning, repairing, and repairing our business investment. We knew the resale value of every vehicle we acquired and always had the chance to make at least a 50% profit, and we’d rub our hands together thinking about how much money we’d make. We’d place an ad in the area’s leading used car classifieds publication and even pay extra for the paper’s professional photographer to shoot some photos. On Thursdays, when the paper was published, we’d sit by the phone and wait for it to call.
We usually get a few calls by Saturday and conclude that our pricing is too high, so we drop it for the following week’s listing. In retrospect, this was our second business blunder; the first was our ad wording in the newspaper, which was terrible and the reason we didn’t get any calls, not because the price was too high. So, once we dropped the price, we received calls and viewers for our now-affordable automobile. Almost without fail, these potential buyers would come to us and offer us a much lower price than we’d advertised because they were mostly small traders who knew the business better than we did, and had spotted the same car listed two weeks before, as well as the price drop, and could recognize desperation when they saw it.
Drop The Price
We’d always decrease the price to the point where we were just breaking even by the third week of lousy ad copy, price drops, and failed to negotiate. Someone would find a bargain, which would generally pop up on a sales forecourt for even more than our first price, or, even worse for our bruised egos, back in the same paper we’d used at a higher price than we’d dared to hope for, but not for more than two weeks.
And this was done multiple times over several years, with the same outcomes for our huge auto company ideas: no sales, no millions, and we were still repairing cars for the benefit of others.
What Went Wrong?
This is when hindsight reveals our business errors.
With our very basic and uninteresting ads, even with a photo, we had little chance of obtaining any calls on our fantastic autos. The words were simply unappealing.
When you start lowering your prices, your potential customers will see that you don’t believe strongly enough in your company’s products or services, and why should they?
We had no business plan, and despite our enthusiasm, we had no firm plans. Even if our first automobile had sold, we would have failed since we had no preparations for the future.
Our firm suffered from a lack of professionalism, as well as terrible newspaper advertisements, due to the fact that we were two enthusiastic amateurs with no phone manner and poor salesmanship. We also lacked the confidence to hold our rates and stick to them until it was sold.
Impatience is, in my opinion, our most serious business mistake, and one that I see all too frequently among online entrepreneurs. Your business will suffer as a result of your impatience. My buddy and I, as aspiring entrepreneurs, didn’t want to wait for our gains; we wanted fast results, which is impossible to achieve. Any “overnight success” will tell you that they only became successful overnight after years of striving.
Continually doing the same thing and expecting different outcomes. We never modified our pattern because it didn’t work; instead, we continued to do the same things and fail in the same ways. Instead of testing and modifying our sales approaches, we used the same ad type, in the same paper, and decreased the price in the same manner each time.
So, take a step back and examine your business operations; do you find yourself doing any of these errors?
Are you hoping for a quick buck from your business? Do you think lowering the price will result in more sales? Do you think your ad copy could be better? Is your company presenting a professional image? Do you keep doing the same thing and expecting different results?
Be honest with yourself, look for any faults you may be making, and don’t make the same mistakes over and over again. Hopefully, by learning from my business blunders, you may improve your own company and make it what you want it to be this year.