I don’t know if I’ve told my first business story on here. I owned a disc jockey company for ten years.
That was where I learned how to do everything wrong.
Sometimes, getting it wrong is okay, as I wrote recently on my personal blog, Stacking Benjamins. (Read: Messing Things Up? So Am I….And I Like It).
But it took lots of mistakes for me to learn. The problem was that I was hard-headed and didn’t change quickly enough. Over the years of being a business owner I’ve learned a few things:
1) I didn’t change directions quickly enough. Often I’d make changes only after someone told me several times they didn’t like something. I always treated the first person who told me they didn’t like something as an outlier. Now I treat the first person who tells me they have a problem as honest and forthcoming, something I’m learning most people aren’t when it comes to telling businesses what they love or dislike. (I love this piece at CreditUnions.com: Change Before You Have To, Or….Change NOW)
2) I borrowed too much money and from the wrong places. When I was behind on my bills and chasing money, I didn’t pay enough attention to the terms of the loan or the interest rate. I just knew that I was in a cash crunch and needed money fast. Big mistake. That one cost me that original business and probably made it so I had
3) I didn’t have a repayment plan. Whether it was for installment loans, credit cards, or otherwise, I didn’t have enough foresight or business knowledge to focus on cash flow and what bite that loan was going to take out of my hide. Instead, I’d have rosy projections in my head. Then, when something didn’t happen the way I’d hoped, I’d be behind the eight ball, hoping to get out of trouble.
4) I didn’t focus on keeping overhead low. I had a storage unit, a truck, hired DJs and gave them paid training sessions that were goofy, fun and expensive. I dreamed about “company outings” that were lavish and celebrated the fact that we were awesome at our jobs. All of this cost me money that I couldn’t afford. I should have been much more frugal about the entire operation.
To some degree, I still am not frugal with my operation. I spend money on professional products….but only those that’ll help me get ahead faster. Different than in the past, those products I’ve already tested for to make sure that I really need them. In the next month, I’ll be purchasing Scrivener (to complete my book), a pre-amp for our podcast operation (Stacking Benjamins), and arms to hold microphones for OG and I. (If you saw “the basement” (my office), you’d know how important this last one really is).
5) I didn’t learn the basics of building or running a quality business. Sure, I read lots of magazines like Success and Inc., but I focused on the “fun” areas like creativity in business and having a fresh, new take on business than on how to build a stable, well-honed operation. It wasn’t until I read the E-Myth many years later that I saw the sexiness of having a straightforward, well-oiled machine.
Last summer I wrote about the magical company Cherry Republic. What I find fascinating about that firm is that, to the outside observer, they have all of the customer service in place that I loved when I began my business, yet they had the marketing and operational support to make this a reality instead of a cheap pipe dream like my disc jockey company.
What I Learned? Start With The Fundamentals
My view of how a quality business is built has changed dramatically over the years. I’m much more inclined to rely on systems and on smart business practices than I am on the sexiness of just customer experience and low prices. It isn’t that price and experience aren’t important. On the contrary, I only think that you can have a great experience and a good price point if the basic building blocks of your operation are sound.
Yes. Because it pays to be knowledgeable before starting your business.
I would not have guessed in a million years that you were a disc jockey Joe! Great points all around and some points I am learning the hard way in my own business right now.
Nice article. Personal experience is always a good – but hard- life instructor. The part about financing and borrowing money is so true. Borrowing too much or too fast is a sure ticket to problems. I see it all the time. Not reading the fine print in the loan documents has cost many their business, their car and even their house. Thanks for sharing.