Today I’m going to share with you how I lost $50k in my first brick and mortar business.
I hope that you can learn from my mistake.
The year was 2002. I was 25.
After attending all kinds of seminars, I thought I was ready to conquer the world.
At that time, I was very interested in the power of the subconscious mind. I got to know a product called Mind Machine. It is a gadget that can help people to relax their minds into the alpha state, a state that is optimal for affirmation and visualization.
No idea what I’m talking about? You’re not alone.
That was how hard it was to sell the product.
Anyway, the point is, I thought it was an untapped market and had huge potential.
With my superb persuasion skill, I convinced an old businessman to partner with me.
Each of us invested $50k. My $50k was borrowed.
I rented a sales office in a prime area, spent $30k renovating it, and employed a full-time staff to mind the sales office.
To get people to buy, I advertised in the local newspaper. I still remembered each ad cost me $700.
I didn’t advertise for the mind machine because that wouldn’t work. Instead, I advertised a free seminar to teach people how to use the power of their subconscious mind.
I got some response.
People came to listen to my free seminar. Some bought the mind machine. But the sales were barely enough to cover rental, advertising and staff cost.
As I was the only person capable of doing the sales, I often had to talk to prospects till late. By the time I reached home, it was often midnight.
Soon I became exhausted, both physically and mentally. I realized that that was not the life I wanted to have.
6 months later, I stopped the business. I had to pay a penalty for early termination of the rental.
In total, I lost about $50k.
After this business, I told myself that I would not go into brick and mortar retail business again.
Here are some of the disadvantages of brick and mortar retail business:
– The upfront cost is high because you need a presentable sales office.
– The working hours are opposite to the norm. You work when people rest.
– A full time staff is necessary, because someone has to be at the shop during opening hours.
– Also, since I am the one closing the sales, I need to be in the business all the time. The better my business is, the lesser time I have.
In the next episode, I’ll share with you my second business. Stay tune…