Sometimes, the biggest success stories arise out of major flops. Here’s how three flourishing entrepreneurs created major businesses after initially failing.
Don’t leave your day job
Jeff Proctor, of Blacksburg, Virginia, left his comfortable full-time job in 2015 to pursue entrepreneurship well before his business was generating any income.
“I had saved up enough money to theoretically last me a year, but I ran out of money after just 9 months,” Proctor says. He returned to a 9-to-5, this time making half as much as his plush previous job.
After grinding for another year at his full-time position while still chipping away on his business, Proctor finally felt like he could manage as a full-time entrepreneur again. Today, his business, a personal finance blog called DollarSprout.com, has four full-time employees and is on pace to make $2.5 million in revenue.
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His advice for others who are early in their entrepreneur careers: Don’t leave your full-time job without at least some income coming in. “I vastly underestimated the amount of stress this would cause,” Proctor says. “And that stress permeated through everything I did for the next year.”
By the time Proctor quit his job the second time to pursue entrepreneurship, his business was generating more than enough to replace his full-time income, which made a huge difference.
Also, he says, new businesses need to ruthlessly prioritize proof-of-concept and revenue generation at the beginning.
“I made the mistake of focusing on all the other little things during that first year, which cost me valuable time,” he says.
Looking back, Proctor says, he originally gave himself a year to make it work, but in reality, it took 2-3 years for things to finally pay off.
“If you are considering starting your own business, get ready for a tough few years, and be willing to do whatever it takes to get where you want,” Proctor says.
Focus and outsource
Daleep Chhabria, the cofounder of FreeMind, a guided meditation business – and founder of the consulting business Growth Forte – had many obstacles to overcome before launching his businesses.
They all had a common thread: his lack of focus.
He was working full-time while he launched an eCommerce business, and he failed to take the time to research his audience before deciding on a solution. Chhabria was working alone to launch this business and was working late into the night. He was also trying to save money – and he was doing this by not hiring consultants or outsourcing. Chhabria was bound for failure.
So when he did fail, he decided to take a completely different approach the next time.
“I partnered with two others to spread the workload and have the advantage of different experts who really compliment each other and the value we create as a team,” Chhabria says. “I’ve also learned to accept that it’s often cheaper to pay for someone else to do something for you where you are not an expert.”
Outsourcing has been one of the biggest sources of help this time, but Chhabria says he knows that it’s expensive, especially for new business owners.
“A smart starting point is to outsource the areas that are cheapest to do: social media posting, graphic design, bookkeeping – so you can do things that are most expensive to outsource or deliver the most value by doing those things by yourself.”
Sales is one of those pieces that he suggests learning. Whether you’re selling your own product or service, selling the opportunity to investors, describing a job opportunity in your business to a potential candidate … you are selling.
“The better you are, the better your results will be,” Chhabria says.
Spend the time to research your market
Gingerbread houses are a classic parent-child activity, right? So Tara Langdale-Schmidt, of Sarasota, Florida, and her partners spent more than $250,000 on an idea to sell gourmet build-your-own gingerbread house kits to sell in mall kiosks. It would be a slam dunk, she thought.
“There were many problems, but mostly, we failed to understand the market,” Langdale-Schmidt says. “Whether it’s computers or video games or all the other distractions, children just don’t do as many arts and crafts projects with their parents anymore.”
Langdale-Schmidt did take away a positive lesson from her experience, however. She learned to research her idea and her audience before she started. She brought this knowledge with her when she founded VuVatech, a company offering a patented non-prescription medical device for women suffering from pelvic pain.
“I learned how to find the right manufacturer, how to find a perfect investor, how to get great legal advice, how to market my idea and how to reach women who needed my product,” she says.
It wasn’t a surprise this time when the business succeeded.
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