I was not broke, I did not have more money issues than the average folk. I just wanted my own thing. It was my expression somehow. I was reading a lot of MBA books, Harry Beckwith, Paco Underhill, HBR you name it. I did not read these for the sake of reading them. I was intrigued by the whole premise. My academic career was also failing so I mustered up enough willpower and started working on my business plan.
I intended to; find niche products, import them in micro scale, and sell them for a profit. The gist was, I was going to allow people to order stuff that was not on my website at all. I categorized items into 3 groups. Ones I had in stock, ones I could get my hands on in 20 days if ordered, customized orders which are only processed after a customer pays a percentage of the cost.
I hired an accountant, a co-working office, and opened a business bank account. I handled the website, got all necessary permits, purchased an e-signature, managed to get my electronic POS system set-up in whooping 3 days; I was even offering installations.
The problem with establishing your own company is this: There is not a guide around and no one warns you of anything. You are completely free falling. Bank asks if you want to offer installations but they do not mention you need to have an e-signature ready. The accountant tells you that you need printed invoices but he does not know the full scope of your operation and does not advise you on which one to get depending on the business model; there are just too many details that need to be handled by you and you alone. For instance, you are required to be registered to certain institutions to gain commercial import rights and they need their stamps on your invoices and these may differ depending on the products you are planning to import.
Strike 1 : I Did not Compartmentalize
I was jack of all trades and master of none, which works for entrepreneurship but you will soon realize you do not excel on all fronts. I was not a photographer, I wasn’t a lawyer and I was not the most literate when it comes to customs regulations. I was a good designer, I had an eye for aesthetic and employed the power of minimalism. I designed my logo, business card and website on my own; being a people person I managed to get people to work for me and get my approvals to get going, I hit the jackpot with my packaging and all.
The problem was more fundamental, I was alone. This diminished my ability to make decisions, decreased my productivity, and no need to mention it stressed me out. You can be a rockstar on many aspects of a business but you are not on a payroll, you are on your own. You need to expect the unexpected, you need to rely on the fact that every week you will have an event that is going to try to bring your business to a screeching stop. This introduces anxiety into the mix. You feel drained doing all the mundane stuff. Stress, anxiety, and knowing that there is no safety net manifests itself as decision fatigue coupled with loss of willpower.
Solution: You need to act as if you are playing different characters on a show. I suggest that you even go ahead and create different computer accounts, different emails and even reserve different desks for every department in your company. It may not be effective but it will save you the trouble of being mentally torn into pieces. You then assume the role of the creative, web-designer, accountant, legal department, and so on. These roles are then can be easily filled by people you hire if things go well which is a plus.
Strike 2: Sunk Cost Fallacy
All the articles and books had taught me to avoid Sunk Cost Fallacy. In the end it did help me survive but I want to be straight, they do not tell you that this requires applying in all stages of your business. My goods were being held at the customs because apparently it is against regulations to have multiple items of different natures in the same package. It can be done but it costs you a lot. You need an official lab to approve of any device that is going to have electricity going through it and when you do the math unless you are going to be ordering the same stuff in thousands it was not going to worth it and I had just 5 items of same nature in there.
Flashback to a few days before: When the customs officer first called me he did not mention the regulation and said all I need to was pay the fee via an agency and they will sort things out for me.
So I was already invested in this. I wanted my merchandise.
For that 5 items which only worth about 10% of the whole shipment I needed lab work done which would cost me 25% of the shipment and I had already paid fees, hired agencies, and even sold some of the products. It was a dead-end and I ignored the sunk cost fallacy. I went all in, lab denied the products. I ended up with no goods, no profit, and lost capital.
Solution: Plan ahead. Have a worst-case scenario and the best-case scenario. Define “LOSS” before you act. Think of it as an algorithm, put up some thresholds. This will also save you the trouble of making a decision, you will be able to automate the process.
Strike 3: Deviated From My Plan
You are devising a meticulous business plan, you make room for error, make calculations and think of almost every aspect of the execution beforehand and yet when things get going these plans usually just collect dust somewhere. Do not let it happen to you. If you are not checking your route every day, either your route is false or you are too caught up with and need to slow down.
Solution: Planning is everything. Do not take flight blind.
I had taken hits on every front. I was at war on multiple theaters. My accounts were depleted, I was not willing to fund from my personal account. My willpower, enthusiasm and overall mental status was a wreck. I was decision fatigued. You can only make so many decisions each day. It is called the decision fatigue and it is a real thing I tell you. At that point I remember having an epiphany as to why successful people wore the same outfit every day. Steve Jobs, Mark Zuckerberg you name it, these people just don’t want to “decide” what they want to wear every day.
The last and biggest hit was realizing I was wasting my time. When you are running a business you often forget that you are employing yourself as well. You need to account for the salary you could be paid if you were employed. It is called self-employment for a reason. I sucked it up and shut my business down. 15 days later my market is collapsed due to a political crisis. I was not dropshipping but my means were similar. Currency fluctuations killed almost every small player I knew, customs regulations, and fees skyrocketed. It was not feasible for anyone anymore.
I wasn’t clairvoyant but I felt that gods of entrepreneurship had a sadistic sense of humor.
I was beating myself for wasting a big chunk of my time and capital on such an endeavor. I was frustrated and donated every business book in my library. My academic career was now a ruin and I had responsibilities coming in my way.
I scanned the web and found an odd job offer. I knew that software company but I wasn’t sure if they were located in my city at all. I sent my applicaton that day. They called me hours later and hired me the day after. Months later I found out that I was the second applicant and they absolutely fell in love with my entrepreneurial spirit. After a successful pitch I held with the most important potential customer in the company’s history; boss called me in to congratulate me, I joked about not having a degree, he told me that he didn’t even know I wasn’t a graduate yet and he couldn’t care less.
I have met the greatest people one can meet in that place. I have befriended people all over the world, seen the cogs and gears of a successful company.
I don’t think binary definitions success and failure suffice to analyze the outcomes of a person’s business endeavors.