As an entrepreneur, the most important skill to hone is your ability to learn quickly. When you start a business, there will be a million things you don’t know — and a million more you weren’t aware you didn’t know.
When I started my first company, I made a lot of mistakes, and those mistakes cost me a lot of time and money. But I quickly decided I was going to make the cliché — “Never make the same mistake twice” — my mantra. Learning from the business mistakes I made early on has saved me from similar stumbles with my second company.
Never Make the Same Money Mistake Twice
The best thing about being an entrepreneur in the 21st century is that you don’t necessarily have to learn everything from scratch. There may be some hard lessons you have to learn on your own, but thanks to the Internet, you have access to the entrepreneurship lessons others learned before you.
In the spirit of paying it forward, here are the top three things I’ve learned since becoming an entrepreneur:
Invest in your own business.
These days, being an investor is pretty glamorous. Once you reach a certain level of success, you might decide it would be wise to diversify and invest in other opportunities. Don’t do it — at least not until your own business is successful. In the early days, I had some opportunities to invest in outside ventures, and I ended up losing hundreds of thousands of dollars.
I had no control over the companies I invested in, but when they went bust, my money went with them. That capital would have been much better spent on investing in my business — the one I controlled on a daily basis. If I had put that money where it should have been, the company could have grown faster and bigger.
Don’t spend a lot in the beginning.
Some industries require a lot of capital, of course. But you’ll soon realize that nothing replaces going out and talking to people. You might spend money just to spend it — you’re not sure what else to do. While you shouldn’t hesitate to spend where it matters, be brutally honest with yourself about where it’s needed.
The more money you can save at the beginning, the more you’ll have to spend in the growth phase. As you’re learning the ropes, do everything on a smaller scale to verify what works and what doesn’t. Only then will you know what to spend money on in the first place.
Cut bad advertising quickly.
At first, you probably won’t know what advertising will work. Most people start paid advertising by throwing things at the wall to see what sticks. One of my first advertisements was on a billboard passed by 143,000 cars each month. I thought I was golden.
After six months, however, I had only recouped half the cost of the advertising, and it took me a long time to figure out it wasn’t working. When you start advertising, the best thing to do is start small. Make small bets across several media platforms to see what works. Then, double down on the best results.
You might say you won’t make big mistakes, but in the end, it’s best to have someone to bounce ideas off of — someone who’s smarter and more experienced.
A business coach or mentor can save you a lot of heartache (as well as time and money). Whether he or she is an investor or an uncompensated friend, running your ideas past someone who has been there is very beneficial. Mentors can help you avoid some of the mistakes I mentioned above.
At a minimum, consider talking to a business consultant or a budget specialist. You need to understand how today’s investments will impact tomorrow’s bottom line, and these professionals can help you see that connection clearly.
You have plenty of your own business mistakes to make, but if you make an effort to always learn from them, you won’t have to worry about failure.
This article has been edited and condensed.
John Stevenson is the founder of John Stevenson Consulting, a Las Vegas-based consulting team that specializes in providing local businesses with customer leads and business coaching. John’s expertise in consulting, business planning, and management was developed during his tenure as president and CEO of J&J Window-Wash. Connect with @stevensonrealty on Twitter.