My Worst Mistakes in Business

12/03/2010 11:27 am ET | Updated May 25, 2011
  • Dal LaMagna Author, 'Raising Eyebrows: A Failed Entrepreneur Finally Gets It Right'

Now is always the best time to do something. Moreover, there has never been a better time to start a business. People are fed up with the large corporate take over of our economy. Given a choice, most would rather do business with their neighbor than some company that vacuums money out of their community. If you currently work for a company that doesn't care about you, work on getting your business going after hours and on the weekends. In fact, that is what I did with Tweezerman, the company I founded with only $500. I finally left the company I was working for when it became obvious that on a single Saturday, I could sell enough Tweezers to people working in beauty salons to survive. On the other hand, if you are currently unemployed, why not start a business -- whether selling an item you believe in or some skill you are good at?

The editors at the Huffington Post have asked me to relate some of the worst mistakes I made when I was starting or running my own businesses -- something I have done many times. As I recount in my memoir/business book, Raising Eyebrows, A Failed Entrepreneur Finally Gets It Right, where I tell the story of my life as "a compulsive capitalist," a great entrepreneurial idea often comes in unexpected ways. Here are some of the lessons I learned along the way to success...

Mistake #1 -- Starting without enough money: More than once I started a business that required more money that I had or could easily get. There was Keepers of the Night, a great movie screenplay. There I was pretending to be a movie producer, but I was $150,000 in debt and practically homeless. I spent eight years and never raised the million-dollars the budget required. After a year, I gave up trying to raise the money. What did I finally learn? Find something you can do with the money you have or can easily get. I started Tweezerman with $500. I had that.

Mistake #2 -- Procrastinating and losing the deal: You would think that if the Coca Cola Company wanted to license an idea I would had jumped on it immediately and got the contract signed. I didn't. Back in 1969, I was converting drive-in movie theatres into drive-in discotheques. It rained on the first six events. I ran out of funds. Yet the Cola Cola executives thought it was a cool idea. Coke is sold at movie theaters. They were ready to test the concept in a sunny place and agreed to pay me as much money as I had lost all summer, just for the test. Six weeks later cyclamates were reported to cause cancer in mice and Diet Coke had to be withdrawn from the market. The company lost a fortune along with their interest in drive-in discotheques. Why didn't I jump right into working out the agreement instead of delaying! Lesson learned: Move as fast as possible to close your deals.

Mistake #3 -- Picking the Wrong Business: Right up there with my big mistakes was running off to do some project with which I became enamored and then realizing I didn't want the life success brings. I took over the failing Orson Welles Restaurant in Cambridge Massachusetts back in 1971, and the more successful I was at turning it around, the more I had to work. Twelve-hour days, six days a week is not the life I wanted then or now. Think through the consequences of eventual success. Will you want that life?

Mistake #4 -- Not Having the Product I was Selling: There was LaMagna LaSagna Baking Pans -- a concept so compelling I convinced Globe A-1 Pasta company in Los Angeles to offer them for sale on their lasagna noodle boxes. I thought I'd just order pans from a manufacturer. Turns out the size I needed didn't exist. It would take $50,000 to pay for tooling and the pans. I couldn't raise the 50K and couldn't deliver the pans. Make sure you have or can easily get the product you are selling.

Mistake #5 -- Not be able to sell the product I had: In 1996, we introduced a hand sanitizer at Tweezerman just as the hand sanitizer business started. Why couldn't I sell it? Because I was paying too much for the stuff. While I was buying it from a laboratory that other similar laboratories were selling it to stores at the same price I was paying. Don't sell a product for which you cannot be price competitive.

Mistake #6 -- Investing in a project I didn't control: I risked everything I had at the time in a movie we called "Willy Milly." Although I had the title "Executive Producer," I had zero control over the business. The person who had control was incapable of making decisions. We investors lost all our money. Don't invest your time, energy, and money in projects you don't control.

Mistake #7 -- Gambling: How about this mistake for a doozy? In 1968, I lost my Harvard Business School tuition, which was a loan from the school, on the first day of class. Back then, the school policy was to send a check to the incoming students. I invested it (unwisely!) in the stock market. (As a result of my actions, the school changed its policy.) You can read the entire sad tale in Raising Eyebrows. The most successful entrepreneurs do not gamble; they take calculated risks.

Mistake #8 -- Being pulled into the orbit of powerful people: When I was young and broke, I was always on the lookout for mentors or people who would finance my ideas. I got involved in the empires of two different people, both of whom just exploited me. Build your own empire.

Hopefully, my mistakes will help guide you through the process of starting and running your own business. If you are an organized person who is capable of focusing and who is frugal and careful, you should be able to make a go at your own business. If you are willing to learn from my failures, you can find out how I did it in Raising Eyebrows, A Failed Entrepreneur Finally Gets It Right. Be prepared for some stories about the upside of failure, as well as what I hope will be essential advice and insights on financing your business idea, finding trustworthy partners, hiring and retaining talent, avoiding costly start-up mistakes, and building a business that benefits everyone.

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