I remember the day my first big order for The Enveloper came through. It was 2005 and I’d designed the product when I was still at university; it was a simple tool to help crafters fold custom envelopes.
When I pitched it to a shopping channel, they got super excited. They wanted 8,000 units and promised to make it the pick of the day. Incredible. Except I didn’t have 8,000 units.
I went off and got them made, handing the manufacturer a cheque for the order, because I knew the shopping channel would pay in 45 days.
But I hadn’t got a purchase order from the shopping channel yet. Days before we were due to go live with the product on TV, I called to confirm. “Yeah, about that….” they said.
The producer had got cold feet and decided to reduce the order to 1,500 units. That left me with 6,500 in my garden shed and no way to pay for them.
This is something that is common among new business owners and that we often see on Dragon’s Den. In your naivety, it’s easy to get caught up in the excitement of landing that first major deal and then forget about the details. None of it means anything without an actual order.
Luckily, The Enveloper sold so well on the shopping channel that they decided to order thousands more. And this time I got them to raise the purchase order and sign it on the spot.
But that mistake could so easily have gone the other way and would have been the end of the business before it even started – and other entrepreneurs aren’t as lucky.
Don’t be afraid to start small. The idea of the big order is great, but not if you have to take a big loan or remortgage to fund it. Starting on a market stall can be a great way to launch a product because you get immediate customer feedback.
The Enveloper became such a popular product in the crafting world that other companies wanted to make their own version. And that led me to my second crucial business lesson: it’s not personal.
A major brand got in touch asking to meet; they were interested in working together on The Enveloper, they said. In hindsight, I can see they were just rinsing me for information about the product, sales, opportunity and, of course, the patent. They realised that instead of working with me on my product, they could change it slightly and launch their own version.
In reality, that was just a product team doing their job – but I took it personally; it felt like they’d come after my business. But, while it might have been morally wrong, for them it was just a commercial decision.
Over the next five years, I spent hundreds of thousands of pounds in legal fees protecting my product from different copycat versions – six in total.
I won those battles and was not only able to protect my product, but to build myself a reputation as someone not to mess with. But if I’d lost, the fees could have killed my business.
When you realise that something is not personal, you can assess the situation with your head not your heart. By the time an American company breached the patent a few years later, I could make a commercial decision not an emotional one and decided that the potential cost to me wasn’t worth the small impact on US sales.
But there is one common mistake among entrepreneurs that I did manage to avoid.
When you’re a small business owner, you’re a Jack of all trades and there is a tendency to want to do everything yourself. It’s partly ego (all entrepreneurs have one) and partly that you think you’re the only one who can.
But needing every decision to be run by one person creates a bottleneck, and those businesses will never get beyond a certain size. The entrepreneurs that break through are the ones that aren’t afraid to bring in other people and offload some of the work and decision-making.
As my business started to grow, I hired people I knew – family and friends. Later I brought in specialists; people who could do certain things better than I ever could.
I remember hiring one person and paying him double the amount I was paying myself at the time, but I knew it was worth it and wasn’t afraid to hire someone who was better than me at something. Having that confidence helped me take my business to the next level.
Now isn’t an easy time to start a business, but that doesn’t mean you shouldn’t do it. But for anyone starting out, there’s no point thinking you can avoid making any mistakes – you can’t. And the most important lessons you’ll ever learn will come from those mistakes.
I’m a firm believer that you are where you are because of the decisions you’ve made, and you learn so much more from a bad decision than a good one. What matters is that you learn from them, move forward and use the experience to do better next time.
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