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OfflineNOUS333
Stranger Than You
I'm a teapot

Registered: 12/26/15
Posts: 2,952
Last seen: 3 years, 19 days
Seeking advice from anyone who has started a business.
    #27059950 - 11/27/20 10:29 AM (3 years, 3 months ago)

Alright.  So, mid August I quit my job.  Have money put aside for living expenses and additional money in savings/invested. 

Essentially went straight from working my job to building a business. Well, technically I built a smaller business and was pretty successful but there was too much risk involved as far as getting sued so I used the experience and started building another business, with much more potential for growth. I created a website, that is pretty much all set up and ready to go. 

I have many many suppliers who are going to be dropshipping products for me.  But, I also have many suppliers who are not willing to dropship, but they have products that are pretty much necessary for the entire vibe of my website to work. 

I am running into the issue of knowing I have to invest my money, which I knew I would have to all along... but I am FUCKING TERRIFIED.  I have invested a good 1-2k already, but it has been in small amounts here and there.  When it comes to inventory, we are taking $500, $600 for each company.  I'm looking at like maybe 7 companies that I will be investing $200-$600 in their products and I'm just nervous. 

On one hand I am telling myself this is what has to be done, it is the small leap of faith I have to take, but on the other hand I am terrified and feel guilty or something for fucking up my life... because that's kind of just how my life has gone in the past.. I never had a lot of money growing up and I tend to pinch pennies wherever possible... I'm terrified of going broke.  And Even if I lost all this money I want to invest, I would not be broke... Far from it.  But its the principle of the matter... and I am just terrified.  I don't want to be the guy who dropped $5k on inventory and then his store didn't take off.

I guess I'm just really wishing I had someone with experience to tell me I am not dumb for investing in my business.  And that this is okay and I shouldn't feel so bad about it.  I feel like this could really be the make it or break it moment for me right now.. getting over this hurdle and learning how to spend money with confidence. 

Really would appreciate any advice.. scared as hell and I am sick of this fear getting in the way of my progress.

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OfflinegeokillsA
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Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27060360 - 11/27/20 02:58 PM (3 years, 3 months ago)

Without knowing exactly what you are attempting to sell, through what channels and how you intend to market your store to potential customers, it's difficult to give you much if any specific feedback.  Nevertheless, I'll take a stab at it... :tongue2:

It is important to recognize and accept that without taking on some risk, you typically have very low odds of achieving a reward.  The amount of risk you take is generally, although not always, proportional to the reward you may achieve.  So if you're talking about investing an amount of money that is meaningful to you but won't break you if you lose it, and you have high confidence in your ability to make it work, just go for it!

I would suggest however, that if you are tentative about the prospects for success and are simply not comfortable losing the money you are proposing to put in, lean down your inventory to only those items that you believe will be the best sellers, are synergistic and/or are the most marketable.  In this way, you are reducing your risk, and focusing your product line(s) to a tighter niche that you can more easily market to.  If you carry too many things, potential new customers may not even take the time to look through your entire inventory, even if there may have been an item there that they were interested in... it just gets lost in the noise.

Stay laser focused to begin with, you'll be able to market more effectively and invest less initial capital.  Then once you have built up a customer base and reputation, you can expand to new products.  This also keeps your store feeling fresh, as you can send out announcements of the new arrivals to your customer list, or make it look exciting by running promotions on the new merchandise.

As an aside, my advice comes as someone who ran a web hosting company in 1999 that ended up failing.  More recently, I started an online retail subwoofer business out of my house, utilizing an OEM manufacturer 2 hours away to build my custom branded drivers, with an initial investment of around $10,000.  My company's reputation was growing well, sales consistently increasing and I was making some decent money for 3-4 years.  However, the OEM I was partnered with went out of business and I simply couldn't find another viable producer for a product of comparable quality at a price point that I could stomach.  Moral of the story: You just don't know what's around the corner, and you always need to manage your risk appropriately.  But if you don't take a chance, you'll never get anywhere.

Best of luck.


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··∙   long live the shroomery  ∙··
...π╥ ╥π...

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OfflineNOUS333
Stranger Than You
I'm a teapot

Registered: 12/26/15
Posts: 2,952
Last seen: 3 years, 19 days
Re: Seeking advice from anyone who has started a business. [Re: geokills]
    #27064070 - 11/30/20 07:18 AM (3 years, 3 months ago)

Quote:

geokills said:
Without knowing exactly what you are attempting to sell, through what channels and how you intend to market your store to potential customers, it's difficult to give you much if any specific feedback.  Nevertheless, I'll take a stab at it... :tongue2:

It is important to recognize and accept that without taking on some risk, you typically have very low odds of achieving a reward.  The amount of risk you take is generally, although not always, proportional to the reward you may achieve.  So if you're talking about investing an amount of money that is meaningful to you but won't break you if you lose it, and you have high confidence in your ability to make it work, just go for it!

I would suggest however, that if you are tentative about the prospects for success and are simply not comfortable losing the money you are proposing to put in, lean down your inventory to only those items that you believe will be the best sellers, are synergistic and/or are the most marketable.  In this way, you are reducing your risk, and focusing your product line(s) to a tighter niche that you can more easily market to.  If you carry too many things, potential new customers may not even take the time to look through your entire inventory, even if there may have been an item there that they were interested in... it just gets lost in the noise.

Stay laser focused to begin with, you'll be able to market more effectively and invest less initial capital.  Then once you have built up a customer base and reputation, you can expand to new products.  This also keeps your store feeling fresh, as you can send out announcements of the new arrivals to your customer list, or make it look exciting by running promotions on the new merchandise.

As an aside, my advice comes as someone who ran a web hosting company in 1999 that ended up failing.  More recently, I started an online retail subwoofer business out of my house, utilizing an OEM manufacturer 2 hours away to build my custom branded drivers, with an initial investment of around $10,000.  My company's reputation was growing well, sales consistently increasing and I was making some decent money for 3-4 years.  However, the OEM I was partnered with went out of business and I simply couldn't find another viable producer for a product of comparable quality at a price point that I could stomach.  Moral of the story: You just don't know what's around the corner, and you always need to manage your risk appropriately.  But if you don't take a chance, you'll never get anywhere.

Best of luck.




I appreciate your advice.  I thought about it some more and came to the conclusion that I have been thinking from a place of fear and that isn't what got me this far.  being optimistic got me this far and riding on total faith.  Being afraid to spend the money I was considering cheap alternatives that would of probably made my store look like shit and it would not have attracted the customers I designed the store for in the first place. 

You mentioned not putting up too much inventory and customers getting lost in the noise.... I'm glad you did.  I think this is something important I will need to consider going forward..  I just want my store to have the perfect look so I have been adding a lot of products but I also don't want customers to 'get lost in the noise'.

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OfflinegeokillsA
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Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27064163 - 11/30/20 08:30 AM (3 years, 3 months ago)

Definitely orders of magnitude more important to carry high quality products rather than a huge inventory of inferior items (unless of course your strategy is to make money through extreme sales volumes, e.g. dollar stores).  This is especially important if you are selling high ticket items.

As an anecdote... Retail costs on my subs were anywhere from $185 - $675 a piece, and my biggest growth driver was by far repeat customers and word of mouth, because the products were of a higher quality than what one could typically find in brick and mortar outlets, at a relatively low price point.  Of course, spending almost $700 on an undressed subwoofer driver that you still have to buy an amplifier and build an enclosure for won't be considered "low cost" by the majority of folks.  Hence the importance of being able to identify your target market and honing your inventory in such a way that it serves them specifically.  Don't fall into the trap of trying to please everyone, focus on your niche and strive to do that exceedingly well.


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--------------------
··∙   long live the shroomery  ∙··
...π╥ ╥π...

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OfflineNOUS333
Stranger Than You
I'm a teapot

Registered: 12/26/15
Posts: 2,952
Last seen: 3 years, 19 days
Re: Seeking advice from anyone who has started a business. [Re: geokills]
    #27064201 - 11/30/20 08:59 AM (3 years, 3 months ago)

Quote:

geokills said:
Definitely orders of magnitude more important to carry high quality products rather than a huge inventory of inferior items (unless of course your strategy is to make money through extreme sales volumes, e.g. dollar stores).  This is especially important if you are selling high ticket items.

As an anecdote... Retail costs on my subs were anywhere from $185 - $675 a piece, and my biggest growth driver was by far repeat customers and word of mouth, because the products were of a higher quality than what one could typically find in brick and mortar outlets, at a relatively low price point.  Of course, spending almost $700 on an undressed subwoofer driver that you still have to buy an amplifier and build an enclosure for won't be considered "low cost" by the majority of folks.  Hence the importance of being able to identify your target market and honing your inventory in such a way that it serves them specifically.  Don't fall into the trap of trying to please everyone, focus on your niche and strive to do that exceedingly well.




Well, the primary reason I might have too many products is due to the fact that I am dropshipping with quite a few suppliers in order to cut inventory costs.  I am buying physical inventory for those products I feel confident will sell, or that I think will sell more often.  But for many of these dropship suppliers they are only offering 15-30% commissions on sales, so I decided to carry more products from each of these suppliers in order to increase the potential number of sales I might make. 

Another reason I have so many products is this is sort of the type of business model I have chosen.  I cater to a specific niche that has unique variations of a specific type of item made by different companies all over the web.  It is hard for people to find all of these variations, and so many people are just repeat customers for one company they have developed loyalty towards.  The way I see it though, many of these customers would also spend money on other companies products and desire to try the different variations.  SO I am trying to offer all of the different variations within this one niche on my platform.

My long term goal is to become a sort of hub that companies seek out when they wish to market their products, and the primary vendor/name customers think of when they think of this niche.

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InvisibleLophosaurus
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Registered: 08/09/07
Posts: 8,744
Loc: CA Flag
Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27065303 - 11/30/20 07:35 PM (3 years, 3 months ago)

I have a very sucessful business.

Most businesses don't make money the first year after all the expenses of advertising, getting overhead, license fees , and all that. Make sure you have money saved to keep your business going until it is successful.

Get licensed and insured to protect yourself. Form an LLC if needed to protect your personal assets. That are people out there who are just waiting to sue you and bankrupt you.

Remember to take profits and don't give your profits away. By this I mean don't give customers discounts just because they ask and make sure you charge everybody and are fair to everyone. At the same time make sure your customers are super happy and would not think of going anywhere else. I advertised my first year and now I have more referrals than I can even handle.

If you can do something yourself then do it yourself. For example, if you can build a website then don't pay someone else to do it. If you can write thank you notes, or take you trash to the dump, instead of hiring out then do it yourself, until you make enough money that it isn't worth your time to do that stuff anymore.

The easy way is almost never the right way. Always do the right thing and work hard! It will pay off.

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OfflineSynKyd
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Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27102559 - 12/22/20 01:33 PM (3 years, 3 months ago)

You have to grow at a pace you are comfortable with, but inventory cost is part of doing business.  Don’t be terrified, your just exchanging one asset for another you’re not throwing money away.

Make sure you set up your business properly with a tax ID and get wholesale accounts set up.  Once you have supplier relationships built it gets easier and cost efficiencies will materialize.  They need your business to succeed, it’s amazing how hungry some suppliers are.

Like so many things in life, it takes work and focus and you have to visualize your path.  You got this-


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OfflineNarrator
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Registered: 11/30/20
Posts: 187
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Re: Seeking advice from anyone who has started a business. [Re: SynKyd]
    #27104401 - 12/23/20 03:30 PM (3 years, 3 months ago)

Watch some TED Talks on entrepreneurship! Watch YouTube videos about Lean methodologies!

It's possible to be successful building your first business by winging it, but people who have learned how to consistently create successful businesses would use proven teks.

At your stage, a serial entrepreneur might use the Get Out of the Building Tek for value propositions to validate (Validation Board/MVP teks).

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OfflineWizardSJ
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Registered: 08/20/20
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Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27104630 - 12/23/20 05:47 PM (3 years, 3 months ago)

Hey man, gonna throw some of my experience out there on risk taking. Seen you have identified your fear is a hinderance so thats a good first step. Ive built 1 business that ive been running for the last 3 years and am in the process of building a second.

Throughout my time with anything ive tried to succeed at ive failed way more times than i have nailed it. Many more business ideas that havent cut the mustard than have. But i still make desicions and take risks as if i cant lose, decisions that would make most people nervous. Investing thousands in a vision that only you can see with the confidence you can bring it home and it will pay off. Its a mindset.

Hesitating and allowing the fear of failure to hold you back will cost you more in the long run than being able to pull the trigger on the right oppertunity. Have complete faith in your vision and plan, if you dont, maybe it isnt the best plan, improve it. If you fail, you learn a lesson, enough lessons and you start making all the right decisions.

Where possible start reasonable and scale up over time, this can mitigate the initial risk somewhat and build your confidence in the process. But dont do this just to pander to your insecurity because this mindset will bite you in the ass. Do it because its a sound decision.

A couple lessons ive taken from experienced people that have helped me as somewhat of a perfectionist which you may be.

1.The 90% rule, get it 90% of the way done. whatever process, product, marketing etc and just get it out. Diminishing returns to time when polishing the last 10% where doubt and over analysing can set in.

This leads into point two, as you can be more productive and make more mistakes as a result.

2. Do it, pull the trigger, youve fleshed out an idea enough, put it out into the world, stock that product, run that ad, revise that process. If it fails, you learn a valuable lesson, if it works then great and sometimes it shines beyond your expectations.

Im very passionate about entrepreneurship because its nothing like standard employment and thats the point, more freedom, more risk, more responsibility, more gain. Its all balance. Find the part of yourself which is passionate about the mentality and the process and it will silence your doubts and drive you to succeed.

Good luck

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OfflineLoaded Shaman
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Re: Seeking advice from anyone who has started a business. [Re: NOUS333]
    #27106749 - 12/25/20 12:17 AM (3 years, 3 months ago)

I'm 5.5 years into my small business and I'll say this: almost nothing anyone else said worked or helped me, almost everything I just did via intuition and failing forward has increased both my confidence and knowledge of what the fuck I'm doing, ten fold.

I realize this is useless advice, lmao.

:pm: me I'll go into detail based on your unique situation, OP!


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"Real knowledge is to know the extent of one’s ignorance." — Confucius

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