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My 2 Biggest Business Failures and What I Learned From Them

It is very tempting to ignore the failures you have in life. Whether they are in business or in personal relationships, there is usually a lot of pain associated with them.

But, if we are going to be honest in our dealings with other people, we have to be open about our failures as well as our successes. In this post I'm going to share two of my biggest business blunders. I survived both of them, but at great personal and financial cost.

My first foray into the business world was going in with two buddies and starting a carpet cleaning company. This was no little endeavor; none of this grab a portable carpet cleaning machine and throw it into the trunk of my car. No, this was a big deal: with full size vans and professional truck mounted carpet cleaning equipment; tens of thousands of dollars went into each rig.

Next, we established a 'phone room', with two crews of phone salespeople; operating from 9 AM to 9 PM each day, five days a week. Each truck had a crew of two carpet cleaning technicians, and our trucks were on the road from 8 AM to 8 PM six days a week. We cleaned carpets in over 3600 homes a year, many of them on a 'repeat' basis.

To be honest, there wasn't a lot of profit with all of the startup costs involved. But we figured the profits would come once the business was established. What came however, was the recession of 1982. During the recession people tightened their belts, quit cleaning their carpets altogether, or rented some cheap ineffective carpet cleaning machine from the local hardware store.

We tried to survive: we let all but one or two of the phone salespeople go (they concentrated on calling our previous customers, trying desperately to drum up work); and then, one by one, we disposed of each of the truckmounted rigs.

Business number two was a discount grocery store offering slightly dated or about to go out of date grocery items at a 30 to 50% lower cost than retail. While there was some capital investment such as shelving, grocery carts, cash registers, etc., the building was rented. There were two problems with this business:

1. keeping the shelves stocked ( it was hard to find a consistently good supplier),

2. the bigger problem was that this was a passive business. on a day to day basis, we did not know if we would be busy or bored. On a really good days we would make enough money to cover overhead and show a nice profit. Then we might have two or three days with nobody coming in the store.

It is no wonder that most new retail businesses fail. We kept the store 'alive' for three years, mostly to keep our hard-working employees getting a paycheck.

LESSON TWO: never start a business where you wait for your clients to come in the door.

The upshot of all this was that my next business venture was a commercial office cleaning business. With this business I have avoided both the pitfalls:

1. The startup costs are low,

2. You acquire the clients, and having done so, provide a quality service and they will continue to generate revenue for years.

In fact, this business was so well-received, that we added a house cleaning business, a lawn care service, and a window cleaning company; all from contacts made in the commercial office cleaning business.

John Maxwell, in his book Failing Forward, says that failure is a natural thing. We all fail, the question is whether or not we will learn from our failures.

I've leaned a great deal from mine and now enjoy a six figure income. How about you? Are there some failures in your past? What can you learn from them?

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