1. Allowing belief to override the business plan
Owning a business is not for the weak in spirit. You need a strong mind and heart to face the day-in and day-out work. In the early days of the dream, it’s easy to be so excited and enamored with the idea of “your” business that you fail to grind out a proper business model.
When I approached my bank with my business plan in a thick three-ringed binder, I thought the president might just hand me a briefcase of cash. No kidding. Then came reality: Within two minutes the bank president asked me several questions my plan couldn’t answer. Still, that didn’t faze me. I lifted my chin and stated with conviction, “This will work.” I left without the briefcase of cash. Belief overrode the business plan, and I exited penniless.
2. Listening to customers instead of spreadsheets
“Famous Health Club just went out of business,” my soon-to-be business partner Mike said. “They left all the equipment,” he told me excitedly. “We can go in and start quickly and not have to buy everything. However, they scammed their people, and no one wants to sign a contract.”
No problem. We won’t do contracts, I thought. And we didn’t. But we should have. Because, six months later, a giant fitness chain came to town and told members they could sign up for two years and pay via automatic draft. And people signed up in droves. Our “we won’t sign a contract” people left for newer pastures.
The lesson is, you’ll be tempted to set up your business in the way your customers say they want. And, sometimes that will be fine if it fits your model. Otherwise, trust your spreadsheets. Make sure the math works before giving in on every demand in hopes of making the sale.
3. Miscalculating the time needed to launch
Since those former fitness club tenants had left their equipment, Mike and I figured that we could open quickly. It was already December and we believed we could open by January 1. Just in time for the New Year’s “resolution” crowd. Timing-wise, we thought we’d won the lottery.
But, three days prior to opening, we knew we were in trouble. I still can’t remember if we slept those last three days. We pushed hard to open the doors. And they opened, but not without our first suffering stress, tears, fears, panic, anxiety and delusions of the greatest business failure ever known to man.
So, set your own grand opening inside a buffer zone. Plan to be ready 10 days ahead of “the” day and you just might open on time, without dread and anxiety.
4. Equating personal experience with business expertise
I began working out at age 12. I was competing in powerlifting and body-building competitions by age 18. In addition to that, I was a personal trainer at a local gym. Certainly all that experience would translate into running a fitness center of my own, right?
Not even close. I knew how to train people, but not retain people for the purpose of growing a membership-based business. You might be a great cook, mechanic, web designer or artist, but that doesn’t automatically translate into business acumen.