The Mistakes Business-Owners Made in the First Year of Business—Plus, How They Recovered
Have you ever wondered how to turn your dreams of owning your own business into a reality? We can help. Each week, as part of our Self Made series, we showcase female entrepreneurs—as well as their quality, handmade goods—and share their best advice related to starting, maintaining, and growing your own business.
Even the best and brightest entrepreneurs have made mistakes. (Sometimes, big ones.) Here, seven of them share what mistakes they made in their first year of business—but more importantly, they reveal how they recovered so you can learn from their mishaps and missteps.
Not delegating when possible.
"Starting and creating a business can take a tremendous toll on one's life," says Ann Soh Woods, CEO and founder of Kikori Whiskey. When she started Kikori Whiskey, she says balancing work and life was tough: "I had young children and was definitely working far too many hours; I was losing sleep and neglecting other parts of my life," Soh Woods explains. "I thought it was all part of the entrepreneurial, start-up lifestyle." But soon, Soh Woods says, "I realized I could delegate more and I learned to focus on results. I took this advice to heart not just for myself but with my team: If there was competitive talk of who clocked the most number of sales visits, who worked the longest on the weekends, or who was quickest to respond to an email—even when a reply was not necessary—I did not celebrate effort just for effort's sake. I realized that effort is important, but the result is what matters most."
Not being prepared.
When Cristina Mariani-May, president and CEO of Banfi Vintners, first started in the family-run business, she attended a major conference on Italian wine varietals—and, while on stage, froze up when she didn't know the answer to a particularly intricate question. "I felt my face turn red as I knowingly answered the question incorrectly. To make matters worse, someone in the audience even corrected me. After that incident, I vowed to do everything I could to never feel that way again." She studied and took classes—and when the opportunity to answer questions presented itself again, she practiced her responses over and over.
Not finding trusted advisors.
"I tell folks all the time that we made every mistake possible in our first few years of business," admits Carrie Wynkoop, CEO and founder of Cellar 503. But, "the biggest mistake was not doing the research to find really qualified, trusted advisers who really 'got' our business. For example, we had retirement plan advisers who saw dollar signs when we walked in the door—and built us a retirement plan for some magical future with hundreds of employees, rather than seeing us as a small business with more modest goals. It took us a while to figure out that many of these folks weren't really our people. They didn't take time to understand what our business was about or where we were going. By the time we figured it out, we had a lot of mess to undo."
To get back on track, Wynkoop and her team "spoke with other small business owners and got referrals to accountants and attorneys who were small business owners themselves and who catered to businesses in our situation," she says. "They have been great partners for us since."
Not paying attention to the packaging.
When Jane Iredale, president and founder of Iredale Cosmetics, launched the brand, "I was so concerned with what was going in the products and their performance that I thought that was all that mattered," she says. "So, I chose very plain jars with white, plastic caps—they didn't exactly have eye-appeal. The result was we relied heavily on word-of-mouth as one consumer told another, 'ignore the packaging, the products work.'" And that strategy didn't work for very long.
"It took us years to get to the point where packaging became a positive rather than a negative," she says. "We recovered slowly and deliberately—one product at a time." For entrepreneurs who are starting product-based businesses, Iredale suggests they "look at the product as a whole—efficacy and design. First impressions are key. They are what initially attracts the consumer to the product. Some people will buy for the packaging alone! So, if I had to do it all over again, I'd find the money to hire a designer to give the brand a modern, cohesive look from the beginning."
Not taking an operating plan seriously.
"A partnership in business is like marrying someone, and an operating plan should really clearly outline how you are going to work with them," explains Michelle Cairo, CEO and cofounder of Olympia Provisions. And yet, when it came time for Cairo to create an operating plan, "I looked at [the plan] as a paper exercise that you would do in school, rather than taking it seriously."
And that mistake had a few consequences: "It ended up having clauses and explanations in it that didn't even make sense to me," Cairo admits. "It led to a lot of problems between my partners and me, and made it even harder for us to get through them." Of course, Cairo eventually rewrote the operating agreement once the dust settled, and now, she has this advice for other business owners with partners: "When creating your operating agreement, don't focus on other people's examples too much," she says. "Use them as a guideline, but actually work with your partners to figure out what works best for you. Take them through the worst-case scenario—like, you all end up hating each other—and figure out what would work best for all of you. And then have a lawyer read it to ensure it's not missing anything. Just make sure it's written in your language."
Assuming you can do it alone.
When Melissa Lorenzo-Herve, cofounder of Pirouette NYC, launched the clothing brand, she assumed she could "do it alone," she says. "Despite having two very young children and working a full-time job then, I thought I would have enough energy, time, and resources to handle everything necessary to get the company off the ground, from negotiating with vendors to funding every last expense. Looking back, it was a combination of ignorance and independence that led me to make that assumption because I had no idea how much sacrifice and money a startup requires. I figured that with my network of friends and colleagues, I could slowly-but-surely manage the seemingly never-ending tasks I kept confronting and leverage their advice to connect with the right people and make the right decisions."
It took Lorenzo-Herve about a year to realize she couldn't do it all without help. "I realized that things were only getting harder, and Pirouette was suffering because of my delusion that one person could somehow grow a company without significant outside help," she says. "Pirouette was not gaining the traction it needed to achieve even its earliest goals, and it was starting to feel like it never would. [So,] I brought on a COO [chief operating officer] … who managed everything having to do with logistics, marketing, and operations as I focused on designing, manufacturing, and branding." And she hasn't looked back. "Having a partner quickly provided the much-needed accountability factor, since I now had [my COO] to follow up with on everything I said I would do," she says. "That accountability is especially invaluable for a first-time entrepreneur, and helped me and Pirouette recover from my thinking that I could take on everything by myself."
Thinking you're the only one with the answers.
"The biggest mistake I made in my first year of business was thinking I was the only one who had the answers," says Sarah Worley, CEO and cofounder of Biscuit Love and 'za. "Slowly, everyone I had empowered around me in leadership became more and more hesitant to make decisions, because I had a terrible habit of not thinking they were doing it the right way. And within six months, I had completely destroyed the authority of the leadership around me and the entire staff looked to me for answers. I was overwhelmed, tired, and frustrated."
Luckily, Worley had surrounded herself with good mentors. "Finally, one of them brought my need for control to me as a problem that was perpetuating the issue within the business," she says. "I had to take a deep dive into what I was doing to cause the leaders around me to fail. And what I learned was that I was the major culprit. Even though it wasn't intentional, I had stripped them of their own belief that they could do the job. I spent all of year two really digging into leadership seminars, books, and podcasts that helped re-frame what good leadership is and learned that my main job as CEO was to support the team leading the real work—helping them to strengthen their decision-making skills, helping them to find their authoritative voices, and learning that just because something was being done differently, didn't mean it wouldn't work."