4 Helpful Lessons to Consider Before Starting a Business

0
14
4 Helpful Lessons to Consider Before Starting a Business

I ended up paying $200K for a failing business. But I turned it around

4 Helpful Lessons to Consider Before Starting a Business
Photo: Pexels

It’s 5:30 am on a cool November morning in Milford, Ohio, in 1987. I grab my skateboard and begin the 2-mile trek to my cousins’ house. I was 12 years old, and it was my first day working at his home bakery. I was a curious kid, always looking for a creative way to make a buck. And when this opportunity presented itself, I jumped at the offer!

I was making $3.15 per hour. My job was to make the graham cracker crust, mix the batter and bake the cheesecakes. All at 12 years old!

We continued baking the cheesecakes out of his kitchen and in the garage for six months. He then moved to a brick-and-mortar location a mile away. It was an excellent location because I could walk over from school. I could not skateboard any longer, though, because it was on a busy road. Instead, my cousin or parents would pick me up.

It took some adjusting. I was used to going in, baking the cakes and leaving. At the storefront, we had walk-in customers and hours; that was all new to me. It taught me discipline and structure in a sense. Except my cousin didn’t run the business that way, and I was free to come and go as I wanted.

As time went by, we started making wedding cakes. I decorated my first cake at 13. At this point, I baked every cake that went out. I knew my cheesecakes, and people loved them! We went from 25 wedding cakes a year to over 300 by 1989. We were the go-to spot for wedding cakes, especially the cheesecake. At the time, all the bakeries in Cincinnati were owned by women.

So they would always refer their brides to us if they wanted a cheesecake wedding “tiered.” Building one of those bad boys was a process. Some of the more enormous cakes consisted of a lot of wood, drills, and a hammer! The cheesecake wedding cakes could weigh upwards of 70–80lbs and sometimes tip at 100lbs.

As time went on, I noticed my cousin’s struggles. I thought, what in the hell is wrong with him? This place is killing it. We are constantly busy; the holidays were excruciating. There were lines out the door, and we sometimes had to stop taking orders to catch up. It appeared to be a gold mine.

I couldn’t be sure, though. His record-keeping was terrible. He was never at the business unless he was needed and he had high school kids pretty much running it daily. It was a great business but horribly managed.

By 27, I had my fill. It was completely unorganized. I always thought I would own it one day and turn the tides and make a run at it. But I had a more lucrative opportunity appear in the Sports Arbitrage business. I married, quit the bakery, and moved to Scottsdale, AZ., to pursue the Sportsbetting gig.

I was doing very well out in Scottsdale. But as “conditioning” would have it, I had no discipline, a lot of money, and a lot of distractions. There was always more money to be made for whatever I blew. Then everything collapsed, but it was a slow bleed until the day it happened. It was called Black Friday in the offshore world. They passed a revised version of the Patriot Act, which made it illegal for banks to transfer to and from Neteller. Neteller was the primary source for moving large amounts of cash in and out of Central America. Neteller stopped doing transfers back in 2007, but now it was illegal for banks to accept any transfers from the offshore world.

I was in shock; my money tree was GONE! My income making $10k-$30K a month sitting around in my boxers clicking a mouse pad had come to an abrupt end. What was I going to do? I had $80K sitting in Neteller at the time, and my account was frozen. I couldn’t transfer it to a US bank account.

Luckily I knew people who knew people, and I trusted a guy that could get me my money. He was a Canadian, and he did what was right. He kept his 5% of the $80K, I transferred it to him, and he sent me a Canadian check.

Around this time, my cousin was looking to sell the bakery; I was 31 years old with about $150K cash. I met with him, and his numbers were way the hell off.

He had no idea what he was making but threw a number at me. My only problem was it’d been four years since I stepped foot in the place. I had no idea what was coming in anymore. I met with an advisor at the SBA; looking back, he was worthless and gave me horrible advice. He bought a bookstore, not a bakery.

While I get “business” is business, these were two different animals.

After we reviewed the books, he gave me a price of $200K. I accepted.

Looking back, that was my first mistake.

And this leads us to the first lesson:

What is the purpose of your business, and why do you want to start it? This is key. So many start or buy a business for the wrong reasons. I went into it for money and an escape, in a sense.

I thought being the business owner meant I could do whatever the hell I wanted. Like my cousin did when I worked for him, I was NEVER there. I couldn’t imagine getting a 9–5; I never had one and never worked for anyone other than my cousin or myself. So why not? Let’s buy the bakery!

What a mistake.

The second lesson is crucial, who and why will someone work for you? What makes a great employee? But even more important is what makes you an excellent employer?

Give a person a reason to want to work for you. Give them a reason to want to wake up. Make them not dread another day at the “grind” with an asshole boss and negative-ass co-workers. I get you can’t weed out every lousy seed that comes in.

Manipulation runs hot and deep in today’s market, but be aware of who you are hiring or who you put in charge of the hiring. Your employees make your business “thrive or dive.”

Find the good ones and treat them with the utmost respect, pay, and show appreciation. Or, as the saying goes, don’t say it; show it.

It means the world to employees if you show them you appreciate their loyalty and hard work.

I know it won’t be perfect, but you are in control of the working environment. Own that shit.

Three is a pretty big one too. Since then, I’ve had a few other “jobs,” and what a shit show they were. You have bosses barking impossible expectations. Do you know why they are impossible? Because of lesson number 3.

I don’t care what business you are involved with — if you are the business owner, you work every damn position in the company.

Not for 1–2 weeks, but for 6–8 months. You get a feel for what you are asking of your employees. So when they come to you with suggestions or issues, you know how to address them because you were in “their” shoes.

Never discount a suggestion someone gives you. Especially if they are in the position 40 hours a week, you might learn something.

Be open to constructive criticism. Involve key employees in decision-making. Not all, but you get my drift. Once you have your customers pissed and your employees pissed, well, it won’t end well. Look at Uber. I drive for them, and what a piss-poor managed company!

Finally, my 4th and most important lesson, I don’t care how successful or what type of money you are making — good money management is essential.

If you are horrible with money and know it, find someone who isn’t. Learn from this person, or find someone to manage something you have no idea about.

Don’t be afraid to ask for help; lose the damn ego, or the ego will lose you; please believe that. Reinvesting in the business is essential for growth. If you don’t do that, welcome to the rat race of “wannabe” business owners that close shop within 2–3 years of opening — if you make it that long.

Go to Publisher:

Entrepreneur's Handbook – Medium


Author: Chris Freyler