Forum Moderators: LifeinAsia
Starting out in a new business, everyone has their horror stories. Mine start with my first business partner who had a knack for pissing off the very people he needed to make "nice-nice" with in order for the business to succeed. Needless to say, he and I aren't in business together anymore. Wish I'd realize what an idiot he was before we incorporated! :(
So, what are your business start-up horror stories? What did you do wrong and what would you differently if you were starting a business today?
I'm just starting a new business (my third) and I'd like this one to do better than the previous ones. ;)
We partnered up with someone who ended up lying, cheating, changing the agreements midstream, etc. If we could do it all again we never would have partnered with him. We are still feeling the repurcussions of bad decisions made 4-5 years ago.
In the second, the partner was never available when we really needed it. Would show bursts of interest, and then the project would falter again and again and again. It's still in a kind of limbo. We are still feeling it financially - although its good in a way, we're way more honed and moving faster than ever before. Good can come of any bad situation.
I love working with different people. It's really hard for me *not* to be involved in 100 different projects - and maybe if I was financially independant, I'd do that. But no more partnerships for me, next time I'll just hire the person, or we won't move forward no matter how good the idea is.
I'm ridding myself of several "demons" in terms of mistakes I've made on some of the other threads. I'm just one of those people that look as a mistake for what it really is - a great opportunity to learn!
The other didn't understand the importance of contracts and I won't even mention the whole tax thing. He seemed to think cheating the government was a good idea whenever possible! I'm glad the partnership ended before anything came up legally. I'd probably be in jail right now, and wouldn't be surprised if he isn't there cooling his heels right now.
Partnerships aside, there were other problems too. None of us were really good planners, and I think that if we'd thought things out before we got started, maybe even put things on paper, it would have made a big difference. Perhaps a partnership or two wouldn't have ever even happened. ;)
Second thing that I would avoid doing would be, to bite off more than I can comfortably chew. I took up a BIG web application development project at an early stage of my learning curve .. it was very tense period of my life... though the application got done quite well .. still.
Approached by a small business with a potentially very hot product... very "new", excellent ROI (ours), minimum competition, large market and the business had very limited budget.
Charged the guy $100.00 upfront 50% net return per unit (about $80/sales would be my share. "Net" however was verbally agreed upon and not specified in contract.
About two months after site launch most engines crawled, went top page of a few dozen terms.
That month had over 5000 units sold (my merchant account) and at months end, the accountant cut a check, for which paid for the guys lawyer.
"Breach of contract", his lawyer citied the guys fixed costs included 5 years of research and development costs making "net" approximately $0.50 per unit of which 50% was mine.
Lawyers bills went to $10,000... and the guy obviously took his very successful product elsewhere (now that he could afford it).
The bright side... my lawyer successfully protected me from great losses since then, so the lesson was quite valuable being early in the game.
I was obviously blind to the fact that I was running a business, and not a hobby site.
I threw Good money after bad, until finally there was NO money left, and I realised what an Idiot I had been.
Shak
