How long have you been in business?

[jovangetty]

Can you tell us a time when your business got good for you? I have freelanced for years and made it a business in the last 5 years. I went through many years of famine until I learned about contracts in my field. Most businesses fail in 6 years and those who succeed reach the 10+ year mark. I have been holding on to the 10 year mark. Somewhere around that time you should have it ALL figured out to be very successful in my opinion and experience. 

[MudFire_Dex]

I started a business in 2008 - and it grew for about 3 years and then we made some critical errors in discounting, hiring too fast, and stocking too much inventory (too much variety). Another company/competitor that had been in business longer engaged with our suppliers offering to order more than we did etc and encouraged our suppliers to raise their minimum order requirements and we got locked into the cycle of ordering too much or were forced to discontinue product lines. So in year 5, we moved to downsize but that effort was not successful and in year 6 we closed. In 2013, because I could see the first business in a failure to thrive cycle I purchased another business and we have been successful in operations with increasing membership and revenue - this will be year 9 for us and we are pursuing a second location this year with fully cash-positive operations looking ahead to year 10.

[jovangetty]

This is a great post! I have heard about having too much inventory variety causing error and possibly discounts too. Those competitor's though wow. It's nice to see that you have come out on top closing in on ten years! I also don't believe in failing, you just learn from the mess and move on, even if it is on to something else, the mindset stays aiming for more. 

[MudFire_Dex]

Yeah, too much inventory was a killer because all profit went back into stock leaving nothing for the low-sales months. In high-sales times we bought more and then discounted too much to be competitive. A huge problem for us was that online stores didn't have to charge sales tax on large ticket items that were thousands of dollars (for us kilns and wheels). Tax laws now will make that easier for some folks because we were always losing the tax in an additional discount (7 or 8% to make the sale). I now use a "profit-first" savings account where a certain percentage of everything that comes in goes directly into a business high-yield savings account that I never touch. https://profitfirstbook.com/ was a game-changer for mindset too - it absolutely recognizes failure as a step along the way. I am always happy to talk about how and why my first business didn't succeed 🙂