You know that moment when you realize you’ve just made a huge financial mistake? Those are the moments we wish we would not have again.
Fortunately, as humans, we learn from our mistakes and can avoid them in the future. In this blog, I am going to share with you 5 money mistakes which I made in the past. I hope that I will be pointing out to you what you should not do either.
Money Mistake #1. Stop scaling business when you see a lot of “red flags” around
What do I mean exactly? In the past, we scaled one store to over six figures in a month. In the 1st month we scaled to 150 thousand, and in the 2nd month we were already close to 300k. We started to prepare to scale to over half a million instead of slow down and making sure that everything is going well. At least we had to make sure that customers were getting the items delivered and all the shipping was correct. Instead of focusing on customer support, we were focusing on the numbers. Let’s scale, let’s scale, let’s scale… And we failed.
Suppliers screwed up and never shipped the items to our customers, referring to the factory issues. They didn’t inform us that half of the orders for the total revenue of 150K had not been shipped the previous month. We got over 40 thousand dollars on hold from the payment providers PayPal and Stripe.
It was a painful experience, and an expensive experiment for us. So to avoid the bigger issues than those 40 thousand of loss, we started texting to our customers by ourselves and offering them a 50% discount on the items which were delayed. Some of them had been refunded because they were really mad, for an obvious reason. Some of them were OK with 50% discount, some of them were OK with an extra gift from us.
So make sure that you focus not only on the numbers, but you also pay attention to what kind of issues could potentially happen by taking care of your customers and of your shipments on time and in the right way.
Money Mistake #2. Wrong partnerships
Another money mistake which I had made was the wrong partnership. I’ve created a new Shopify store with a man who seemed to be serious. He came from a different industry and told me, ‘Let’s start a business. Let’s work together. You will handle the advertisements for the store, and I will handle customer support and the store itself. Let’s go,’ he said. We started running ads the next day, and we discovered a suitable product very quickly. But when we began to scale the store, I realized that something was going wrong.
For example, when I asked him about the shipment or the supplier’s responses, he always said ‘everything is fine.’ He always dodged the questions and avoided the answers. Some time later, I found that my partner was interested only in numbers of orders, and did not think much about clients and shipping. A few weeks after we finished our partnership, I discovered that we had opened PayPal and Stripe tickets, because we had not shipped the items. He didn’t complete what he was supposed to after we stopped working together. Make sure your partners are responsible and takes care of what they are supposed to, because irresponsible partner can destroy your business.
Money Mistake #3. Not to check restricted Facebook Business Manager accounts
To be honest, one of the dumbest mistakes I’d ever made was not turning off ads in a restricted ad account. In our agency, we had a problem with our Business Manager. When we opened a new ticket, it was never replied to as usual on Facebook. So we just created a new Business Manager and started advertising. Suddenly, in six months, the Business Manager was reactivated. One day, we noticed that money was coming out of our card in larger amounts and more frequently than normal. We didn’t scale the ads, so I began to examine them.
The Facebook was charging us three times as much as we’d received on our receipts from the BM. I began to wonder, ‘Hmm, what’s up with those old ads from the past?’ If you get disabled ads accounts and BMs, you can’t turn off the ads. You can’t do anything with a disabled account. So when I opened the old ad account, I saw that ads were running. For a few weeks we were spending money on the old ads. Here is my advice – remember that you can’t turn off the ads on the restricted accounts. It is possible that one day Facebook will return the control to you, and you will get not only a working ad account but also a lot of money spent.
Money Mistake #4. Not to double-check information before investing your money
It’s another mistake which I had made in the past. I bought a course from one guy who was actively advertising on Instagram. I followed him for some time, thinking he was awesome. The data he offered looked quite intriguing. I bought a course from him for $3000, and we started studying. It appeared that all the information I had learned was copied verbatim from a course I bought four months before. I do not recommend you to do the same. You should only follow the genuine professionals and ensure that you have vetted everything before you spend your cash.
Money Mistake #5. Not to choose contractors wisely
Another money mistake that I had made… I spent over 25 thousand dollars on the ads and made about 5 thousands only. In our agency, we decided to employ a contractor-agency to handle lead generation. This agency had the best reviews. They were nice, and we knew that they were making millions a month on Shopify. Testing Facebook for three months cost us $25,000 and generated only $5,000 in revenue, which wasn’t as good as I expected. I realized that lead generation and e-commerce advertising had different angles and the agency was not experienced in both. That day I realized that professionals are excellent at what they do every day. They can’t be proficient in multiple things.
So if you are in dropshipping space, in e-commerce, I highly recommend you to hire a narrow-focused agency, like Golden Stream Media. We are focusing only on e-commerce, dropshipping and the branding of Shopify stores. This is my biggest advice for you.
These money mistakes could cost you a lot of time. And time is money. As soon as you find out what’s working for you, you’ll start making money faster.
Hopefully, my experiencewill be helpful for you, and you won’t repeat the same mistakes which I’ve done.
Watch the video, if you think you missed something.
Short summary: You need to be careful when you’re investing, you need to be careful when you start working with someone, and you need to understand that professionals are usually focusing on the one thing only.
The video provides more examples and covers the subject in depth.