3 Financial Mistakes Entrepreneurs Make

#WrittenInThePastPublishedNow

  1. Investing a lot in creating a new product

I have made this mistake many times, i.e. overly investing a lot of money in the development of new a product at once. Obviously ‘a lot’ is relative. My ‘lot’ can be less to yours.

The danger with this is, if the product doesn’t work, the loss is greater.

When developing a new product, entrepreneurs should strive for ways to do it in tiny bits and not expose all of their capital, and thus allowing them a safe feasibility test. Read more

How I Lost R90 000 in 2011 and Still Miss it When I Am Broke

I am on a promotion of fourth and latest book, ‘The Anxious Entrepreneur’. Do check it out.

When broke, don’t you sometimes ponder upon the monies you had in the past, the deals missed and those you said no to?

Today I am doing that. I am expecting monies to come through and even those funds are budgeted for different projects. I want more to put into current and others. What I mean here is I am future broke.

Money multiplies Read more

My Date Wrote on Facebook that She is on a Boring Date While Sitting across Me: Dating and Business Advice from an Entrepreneur

While we were on a date, she posted on her Facebook: “On a date, he is boring. I hate guys who cannot make conversation. This is a regrettable waste of my Sunday, the worst eveeeeer.”

I was a bore, I froze, and conversation wouldn’t come. We were connected by a mutual lady-friend, Thapelo.

The date was going wrong. To avert the silence, we both fiddled with our phones. That is how I came across her Facebook status.

“She is beautiful, single and looking”, I heard; she was. She wanted a man who is doing not so bad and is also ambitious. “I’m ambitious. I fit the profile – why not give it a try?” I thought.

After the date, I told my best friend Lesiba. “Don’t worry mfana, clearly she doesn’t know you well and never will”, he said. Thanks chief.

To skip the foreplay: If the starter meals are not your forte – Jump to section B!

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A.

We got calls from customers complaining that the t-shirts they had bought from us were shrinking after washing.

It was 3+ weeks after Gabble Heights Clothing came out – and it was an immediate hit. We had sold a bunch of stock and produced +-100 units.

Most people starting clothing brands buy promotional t-shirts, at around R20 a piece and screen-print them at about R30a tee. And they are in business.

My partner Lesiba Lekagau and I loved clothes, Diesel more especially. We envisioned a brand which could compete with them and company.

For 2 years I researched about making clothes: pattern cutting, fabric, stitching etc. I even travelled as far as Durban (from Joburg) as it has a lot of fabric and manufacturing factories. Our t-shirts sold at R350.

The detail of every angle was meticulously thought out. We came up with the phrase ‘gabble heights’;2 words which were totally never used together before – we gave them a single meaning.

Our garments were tailor-made with the finest burling fabric. This is the stuff high-end brands use (at that time).

We had our own font. Our very own f*#%*n font! Shout to out Bill Botes, he designed the font for us. When I tried to pay him for marvellous work he had done, he said “no.” Thanks a lot Bill, I learned a lot from you.

Since our clothes were made from scratch and were printed with suede flock (It costs over R50 per t-shirt), to make one t-shirt cost us over R100. This is more than double compared to using promo tees and screenprint.

The loss was a couple of thousands. Almost all our savings were put that order.

We discovered that our mistake was we didn’t treat the fabric before handing it over to the CMT (Cut Make Trim) we had outsourced. Treating it was supposed to be as simple as putting the fabric in water overnight.

A ‘yawn’ to Lesiba and Tiisetso!

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B.

The date situation and gabble heights Clothing incident were hurtful. But I regret none.

However, to remedy business risks such as those of gabble heights, I apply an approach which Richard Branson calls ‘protecting the downside.’ Some might even call it the ‘lean business approach.’

Because I am silly; below follows a ‘going on a date’ analogy to explain the concept.

Do not argue – Take it as I say it in order to understand.

Say you are a single guy and looking for a somewhat serious relationship.

You are in the market, browsing and surveying at a couple of opportunities (potential girlfriend). There are 3 ladies you have an interest in.

To try each, you are thinking of a date.

Let’s say a date costs R500. So for 3 dates, it will be R1500. You can’t take them out at once unless you are the Spinach King, I mean the Sushi King. The Sushi King says he is retired from dating an army of women (at the same damn time with their knowledge).

R1500’s weight is relative to different people. To some, it’s expensive, to some not and others- fair. Some ladies seeing this are saying “sies that is so cheap and insulting Tiisetso.”

The final goal is to get a girlfriend. Think of the dates as market exploration. If there is an option to cut down market exploration costs, it is a smart choice. 

Who told you a dinner date is the best market exploration. You can do a coffee date (Did you know that? There are always options). Why immerse yourself under the pressure of being interesting and with a hefty bill at the same time?

Let’s say a coffee date will cost R150 each. So, on separate dates with 3 women, it would be R450.

To apply the ‘lean dating approach,’ rather ask each out to a coffee date. Limit your time so you are not thought of as a cheap and easily available commodity; say to them you would like to do coffee in the week for an hour or so. It is a small ask, I am sure they would oblige.

Using a lean dating approach to discover who you like better from the 3will cost you R450 with a coffee date (versus R1500 with a dinner date).

Coffee date = R1050 saving. Booooom!!

Then after, you would know whom you like better. Then you can take that one on a R500 date.

In total, with a lean approach, it costs R450 (3 coffee dates) plus R500 (single date with the one you like better) for a dinner date. Equals R950.

If you did dinner for the first 3 dates, you would have spent another R500 or more on a second date with the one you like better. That’s like R2000 + to explore possible girlfriends (versus R950).

Even in business, don’t go all out at first.

Ambition and conventional thinking sometimes lead us to spend drastically without weighing options.

Protecting your downside is lowering possible losses. Entrepreneurship is risky anyway. You are trying to minimize the risk of exploring that particular business, by launching and testing it in different small inexpensive stages.

In the case of gabble heights, if I had to do it again, I wouldn’t print 100 t-shirts. I would do 20 just to test, and not pump almost all my savings into a venture – especially a business I am totally new to. The market will help me on how to proceed.

Unlike while on dates, the beauty of business is you can go home and think about. If not, it is a casino like gamble. Maybe you are being crooked.

Actually, she as well didn’t have conversation.

There is no shame in walking away with shame, I tell myself.

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Ohh, a coffee date is now called a ‘pre-date.’