Nobody likes to make mistakes, but sometimes they have such a big -- and eventually positive -- impact that we're actually thankful for them, despite the immediate pain or problems they might have caused.
Here are the stories of two small-business owners and the mistakes they're most thankful for. Their errors provide cautionary tales that could benefit anyone who is starting a business.
Failed Negotiation Becomes a Bonus
Edward Hechter, cofounder of PartyPail.com with his wife, Lisa, tried to drive a hard bargain with a landlord during his company's rapid growth, but he lost. Or so he thought.
They started the party-goods business in 2007 using their two-car garage as a warehouse. Daily orders quickly grew from two to 20, so the couple rented a unit with 1,500 square feet of warehouse space.
"Over the next year, as we grew from 20 orders per day to 50 orders per day, we realized we needed more space," Hechter said. "The unit next to us became available. I played really hard in the negotiations to get tenant improvements that were probably unreasonable. I lost the unit to another tenant."
He and his wife made a "painful" decision to relocated once the lease was up, and they planned and carefully executive the move over 90 days to avoid disruption to customers. As they were finishing the move, they learned that their former landlord had sold the building and all the other business tenants had only 30 days to vacate.
"Had I not made a mistake in the efforts for tenant improvements, I would have ended up renewing and extending our lease, and been in a pickle for a location to operate from," Hechter said. "I learned a lot about controlling our destiny a lot via the terms of our leases, and the provisions therein."
Know When to Fold 'Em
Kim Michaux started her first business, One of a Kind Kid, as an online store in 1999, selling high-end gifts and clothing. She hoped to make a little extra money while staying home with her children. She opened with little money and a digital camera, and soon sales grew to a few million dollars per year.
Her "mistake," she said, snowballed from a few poor decisions. "We were under-capitalized, grew very quickly, and didn't have the systems in place to handle the growth," she said. "I tried to do everything myself and was overwhelmed, stressed out and worked 16-18 hours a day, 7 days a week on a regular basis."
Then the economy tanked. "After being on track for a record year in 2008, our sales nosedived in September, and we just couldn't survive without the 4th quarter sales we expected.
"One of the worst mistakes I made was not closing in January of 2009 after that horrible quarter. Instead I spent a year trying to fix it by opening a brick-and-mortar location to sell the excess inventory," she said. "We lost another $90,000 in 2009 and finally closed in 2010."
She has since opened JK Boutiques LLC, which includes the Monogrammed Martini store, in Midlothian, VA, and its online site. "I have learned from my past mistakes," she said.
"I've outsourced many functions I used to do myself. Outsourcing has worked fabulously -- we have expert third parties working on SEO, PPC, email marketing, graphics, and promotions. I've also outsourced the tasks I truly dislike because I know from experience that those tasks are always the last ones I'll do."
Michaux said she is now more organized, with clearer goals and more balance in her life.
"My new venture fits my life, and I run the business instead of the business running me. I'm having fun again! What's not to love about that?"
- The 4 Gutsy Trade Secrets to Increase App Downloads Entrepreneur