Tales from the Trenches …
by John Ingrisano
[If you have a story of business success or failure – how you did something amazing right or downright stupidly wrong, and would care to share it – send me an email with as much detail as possible. If your tale is chosen, I will feature it here and send you a copy of my book, The Back to Basics Book of Selling.]
A long time ago, during my wanderlust days, I started a Jimmy Buffett store, The Last Mango in Paradise, on St. Thomas in the United States Virgin Islands. It had winner written all over it.
Though the choice of St. Thomas was not perfect (the island is rife with racial tension and has a very bad business climate), the business plan was rock solid. I projected that we would be in the black and making profits by the end of one year, and from there I projected profits growing by 15% or more a year. It was a winner, with a terrific and multi-generational market, based on the ongoing popularity of the singer Jimmy Buffett.
However, I made two mistakes, both involving personnel: First, in a long moment of mental stupidity, I made my wife (a second wife, with no financial stake in my life) at that time my equal business partner. I did this even though (1) she had zero business experience, other than as a clerk in various retail stores; and (2) the investment capital consisted 100 percent of my money. (See this one coming yet? I didn’t. Oh, but there is more.)
Second, I hired my wife’s daughter and – just to prove how stupid a person can be when he puts his mind to it – the daughter’s boyfriend.
From the beginning, right after all the legal documents were signed, I knew I was in trouble. As a businessman, I know that running a business involves continual (if not continuous) attention to detail. Once we had the store up and running, I devoted my days, endlessly, to finding ways to increase sales by a percent or two here and there, as well as cutting expenses by a few cents here, a dollar or two there.
Meanwhile, my wife (ex-wife today and long gone, by the way) thought that running a business meant sitting behind the counter and ringing up sales. Just as bad, we ended up padding the daughter and boyfriend’s hours. Why? Because they needed the money. In the end, challenged at every turn, I watched the business go under, right when it should have begun to take off and make money.
The moral to the story: A business exists to make money. It is NOT a social (or family) welfare program. If it had it to do over again, I would have hired the wife as an employee (if at all) and never have hired the daughter and boyfriend … except maybe from time to time, on a part-time basis.
So, lesson learned. Several hundred thousand dollars poorer, but a lot wiser … and still kicking! It was a great idea, one destined to make lots of money for someone. However, I made several important decisions for the wrong reasons. They cost me big time.
When it comes to your business, be hard-nosed. No matter what friends, family and the social engineers may say (none of whom is going to risk a penny of his/her own money in your business), a business exists to make things and to make money.
So work hard, make money, have fun … and keep control of your business.
John R. Ingrisano The Freestyle Entrepreneur john@TheFreestyleEntrepreneur.com