As a business owner or entrepreneur what’s the most you’ve spent on a mistake?
I guess you could say it’s all relative to what’s a large sum for you; a big mistake I made early on in my entrepreneurial journey was when I spent 20K on marketing with zero return and while I had a big fat 0 for a customer base.
Now at the time, $20,000 was HUGE for our business. We’re talking a small bootstrapped start-up with little capital and no major client base. In short: no cashflow.
Having zero background in marketing [I was the queen of any freebie marketing masterclasses at the time], I knew that I’d need help. After all, like any of you know, when you start a business you wear so many dang hats. I just didn’t have the will or want to learn this beast of an industry called marketing all by myself at the time.
My HUGE business mistake
One of my husband’s clients, a very successful jeweller and businessman, was speaking about the power of radio advertising one day. He was expressing how the ROI [new and exciting lingo for me at the time!] was huge compared to what he was spending within his advertisement budget [$$$$$]. Note: this should have been my first red flag.
Two very key factors I failed to take into account:
This businessman had a well-established business and recognized brand
I did not have nearly the amount of money to “play” [his words] around with
Fast forward to a week later and I’ve convinced my business partner this is the way to go. I’ve been assured radio advertisements are great return on investment and I’ve assumed that it’ll take no additional work from us, the calls and emails will come flooding in once our ads are live.
The following week, we’re sitting down for conversations with these big media sales executives for the two popular local radio stations in our city. They’re showing presentations of KPI’s, ROI’s, key demographics, etc., you name it, they were selling it. And well.
By the end of their bedazzled presentations I was ready to hand over my money so that we could start seeing the return my jeweller friend was raving about.
We decide on one station. The cost is 20K. We justify that we have to spend money to make money. It’s a signed deal.
I can still remember hearing my very first radio ad – I was squealing and jumping up and down in front of my 1 year old at the time. It was so exciting! They were mentioning MY business on the radio. Unreal. In my mind, in this moment, I was completely and utterly satisfied with my purchase.
Now, before I go any further I should mention that the station we ended up working with did a wonderful job of teaching, guiding, overall great content creation, along with doing so much more to make us feel appreciated as clients.
A week goes by… nothing. Two weeks… a little foot traffic on the website but not enough to get excited about. One month goes by and this is when the reality of our commitment set in. We had made a mistake. A very, very expensive business mistake.
The issue wasn’t the radio station. The mistake made was in the idea that we could throw money at this massively important area of our new business and expect it to thrive and grow massively successful overnight from a couple of sprinkled radio ads throughout the day.
I love mistakes because to me I look at them as a mis-takes.
So that go didn’t workout so well. It sucks. Now let’s do it again, a different way.
This $20,000 lesson taught me that there are no shortcuts. Success is learned and earned from putting in the work. Throwing money at a task, issue or responsibility might seem productive in the moment but generally only acts as a bandaid to the gaping hole of lacking knowledge or competency in a certain area.
Even though we’re playing with different numbers now, I still always revert back to this valuable lesson. I’ll often ask myself why I feel like I need to spend money in an area and if I’m just trying to avoid doing and learning hard things.
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Always fail forward my friends,