Episode 10: My Biggest Business Mistakes

[Music] you are about to step into the barrel Solomon podcast show no fluff talking about greatness talking about wealth talking about house becomes the number one man or woman in your space let's roll buddy was followed by businessman welcome welcome ladies and gentlemen to the barrel Solomon's Show today we're going to be discussing the biggest business mistakes that I have made in my bidness career all right and we're gonna go intimate you could judge me all you want but I don't care because I'm real and honest and you should be too we're gonna start with my very first business when I was six years old I would notice that there was a problem in when I would go to Florida with my family for winter vacation and at the pool downstairs there was always a problem that there's too many people for too few chairs and people on their vacation had to go downstairs and they had to reserve pool chairs so I said hey instead of you waking up at 6 o'clock in the morning I thought as a six year old why don't you pay me a dollar I'll go downstairs with my floaties with whatever I had and I'm gonna reserve the chair for you'll pay me a dollar a chair and I'm going to make sure you have a nice vacation and you could relax so I got like 20 customers and my biggest mistake that I did in that business was I was too shy to collect the money ladies and gentlemen if you work you have nothing to be shy about you should be proud to ask for your fee when your waiter comes to you at the end of a meal and he hands you your bill he's not tried to do it you ordered something it cost it costs something and you pay it gladly people out there number one mistake that I see in business is people a are too shy to ask for what they feel if they're worse so they under sell their value and B is whatever you now charge don't be scared to ask for the money be proud to ask for the money because you're doing the service to those people and they're winning so that was my first business when I was six years old next business was lemonade's then biggest problem biggest mistake in that businesses there's not enough money I was charging 25 cents to a dollar per lemonade cup after my lemons after my labor after my rent of my stand no I'm just joking we didn't rent the stand but after after everything on walk away at the end the day with like 11 bucks and I'd sit sweating in the Sun all day and the problem was there was not enough money in that business in order to make it a good business so number two biggest mistake that I see people making in business is you're choosing businesses ladies and gentlemen that there's not enough money in I'll give you a perfect example of a horrible business the restaurant business horrible business for all of your restaurant owners that are watching this I'm sorry I love you dearly but you're in the wrong damn business okay you have to own it you have to rent you have to rent a restaurant if the pay waiters you have to pay for the food if there's one mistake that day you get one broken air conditioner you get one client that gets food poisoning you get one on a flood fire your your whole entire month's profit is gone it's a very tough business very small margins a lot of hours very very tough you have to be there people steal cash there's not enough money there's not enough meat in the bone but if you look at a cousin of the restaurant business the food business I have friends there some of the wealthiest people in the city of Montreal they distribute meat so they'll sell truckloads of meat to different to different grocery stores and they're making I don't know what their margins are but I guarantee you on a quarter-million-dollar truck of meat those guys are making 20 30 40 50 grand per truckload that's a good business low low high my margins and and low cost you cannot make money if there's no money you can't squeeze water from Iraq Moses did but you can't all right next so we had the what do we just say where was it that was okay next business that I was in after the lemonade stand was as I got a little bit older I got into the fake ID business when I was 15 years old I thought I was brilliant III got a I got a laminator I got a professional camera we would charge forty dollars per person cash no tax take that Prime Minister Trudeau and I would make fake IDs by the way I wasn't always religious I wasn't always a man J good guy I wasn't always god-fearing there was a time when I was a little bit on the wild side we're gonna get to that when I used to sell weed for a living which by the way is legalized in Quebec and Canada now so I'm not such a bad guy but again now that I values and I fear God I would never sell weed or fake IDs but fake ID business good in the short term cash intensive cash heavy imagine I was like a 15 year old pitcher I had 30 or 40 clients times forty bucks I was making like sixteen hundred bucks a week at 50 year at fifteen years old you know what the problem is you ruined your reputation when you do illegal things you ruin your reputation very very quickly everyone knew I was the fake ID guy I had I was always paranoid that the police was gonna bust me I was always paranoid my friend my parents are gonna find out fast cash high-risk illegal cannot scale out cannot go big cannot become a long-term thing so as much energy that I invested in that I could not last in it so illegal businesses biggest mistakes that I've made don't go into legal business illegal businesses it's just not worth the money better to build long-term next lemonade stand pool chairs chocolate bars my school when I was in elementary school that give us chocolate bars to sell and I remember that I would buy the bag of chocolate bars and I would my father instead of you have every bag that you bought you had to sell right you took a bag you had to commit to it you had to sell it my biggest problem was I relied on my father at the end of the chocolate bar sale to just give me the hundred bucks or whatever it was for the bag and I was lazy and I didn't go out and sell so my biggest mistake there was not was relying on was relying on the on the comforts that I had comforts are a good thing but comforts also make you lazy I see so many of my friends there parents are rich their parents have money their parents have a business and they are the laziest people on planet earth and they just rely on mom and dad or whoever it is that has the money they have a PhD Papa has dough don't get comfortable don't rely on your parents don't rely on anybody else except for your own efforts that was my biggest mistake there so now we're moving up and rely on what's that relying on God yes thank you yes of course thank you all right chocolate bars next as I'm getting older fake IDs is off there then I started to sell weed when I was like 17 years old I wasn't a bad guy again I didn't have I didn't have God's principles they should not sell drugs or do drugs I know that you know Prime Minister Trudeau made it legal and you should be ashamed of himself because weed is a very big problem that people do not really take into account it's a very slow spiral downward and I wasn't trying to be a bad guy just all my friends smoke weed I knew someone who sold weed and I was a business man and I just said okay I have a supplier I have customers let's make a marriage problem was when I was 17 years old or 18 years old I had bought a pound of weed and which is like $3,000 and somebody found out and as I was opening my trunk to put it into my trunk I turn around and I get smashed in the back of the head by a gun and as I turn around they smashed down my front my front tooth they stole my keys in my watch and left me on the floor to die because again it's a shady business it's illegal it's not clean you ruin your reputation it's fast cash but short term short term not a good business you guys should all stay away from legal illegal businesses it is not worth it don't sell weed bar mitzvah deejay again similar problem I was in the ice I saw that you know I was a cool guy I knew all these people doing bar mitzvahs I was like 14 years old I said to myself well let me start a bar mitzvah DJ company I could charge a couple thousand bucks / / / / / project / / event I bought all the equipment or found the equipment by anything i found a piece together piece of equipment i spend so much time on the marketing of the company and and the concept I never went out to sell so my biggest mistake in that business was not focusing on the sales and more focusing on the concept and the and the company itself and trying to make an idea work when I didn't even go into the market I was too scared to go into the market so I'm gonna cut that one out don't focus too much on the equipment on the concept focus on the sales minimum viable viable product and then go into the market and see if the market is receptive to your product next business by the way everybody hears about the I'm getting to where I'm a little bit older and I actually started coming up with like real businesses where I'm like 21 to 26 in this in the next few examples but everyone knows barrel Solomon as the business guru business genius everyone knows what wealthy commercials is so successful you didn't hear about the ten businesses that failed before wealthy commercials you only hear about the good thing I failed many many many times before I clicked on something that works next business that I thought of soup kitchen business again great concept poor execution I wanted to open up soup kitchens all around the country I want to open up a thousand of them buy old produce from guys please on Facebook and Instagram start answering your questions because gonna I'm gonna get to them at the end I promise you I will get to every single question grace if somebody has a question in the meantime please let me know I thought I had a great business and I did again no execution all concept all ideas zero execution ideas are great sorry ideas are worth nothing if you have no execution execution is everything I've known people who are really not smart but really good at execution and those guys are the wealthiest people that I know it says that King David says that God gives you blessing on what you do not on what you think about it's what you do that's where the blessing is all right next business is when I was 26 years old and I was thinking about things that I could do outside of outside of my family business I went I wanted to start a closeout business so start buying you know when Walmart or whoever it is when they have talk that they can't move you could buy it for pennies on the dollar and I wanted to get into that business and then you go and sell it to dollar stores and whoever I got into that business the problem was I was so low-key about it that nobody knew who I was I was trying to do little deal and a little deal and little deal because I didn't want anybody to find out in case I failed so I was doing it very very small very quietly and the problem was because it was small and quiet nobody knew who I was nobody found out about it and the amount of deals that were coming into my pipeline was not enough to start a business on it was only I had I had after the three deals that I was working on fell through I had nothing left because no one knew who I was and I wasn't making a big enough impact on that industry my my it was called wealthy closeouts actually the problem in that business was I didn't go big enough I didn't go fast enough I didn't go loud enough I went too small and the problem is like a fire with a very very weak flame when you have a weak flame a very small amount of air a very small gust of wind blows that flame out if you have a raging inferno no matter how hard when you blow wind on it it actually gets stronger I went to small to quiet I got blown out next business that failed was the sunglasses business I went into a business where I was selling designer sunglasses my biggest problem in that industry was it was over saturated the market was so dense so many people selling on Amazon so many people selling on eBay and I was fighting with everybody on literally dollars so I would try to make a few dollars on a pair of sunglasses there was too many people fighting me I had not enough knowledge I had to have and my biggest problem in that business amongst anything was I didn't calculate my numbers so I bought fifty thousand dollars worth of stock of sunglasses but I didn't calculate how much money I was going to be I needed to how much my sales had to be in order for me to sustain the business let me give you an example Walmart has any Walmart store on average has two to five million dollars worth of inventory in each store so they're out of that two to five million dollars if their sales per day it's not they're not selling two million doll with the goods a day they're selling let's say an arbitrary number a hundred thousand dollars worth of goods a day so they know if they're selling a hundred thousand dollars of goods a day then they're able to it's cool to everybody around here actually I like this thing finally somebody's listening to me if they're selling a hundred thousand dollars with the goods a day they know if they subtract their rent their employees their electricity their cost of goods they're carrying costs their interest their insurance all those things out of that hundred thousand dollars with the sales they know that they have ten fifteen twenty thousand dollars a day left profit in order to keep the the the store going to keep the company going my problem was I bought fifty thousand dollars worth of stock of inventory and I was not able to questions by the way Instagram Facebook we're gonna get to them I'm on the last point here I only have five more minutes left of this episode but I promise you I will get to every single question before I do I'd fifty thousand dollars worth of inventory and my sales were about a thousand dollars a week so on that thousand dollars a week let's say I had three hundred dollars of profit on that thousand dollars I was losing money every single week if I had a million dollars worth of glasses then my sales per week would have been ten thousand dollars and I would have been able to sustain myself on that but because I went again going small and my inventory was so small I didn't calculate I didn't do the calculations you cannot go into business with your eyes closed and hope that things work you have to do calculations you ever hear the expression numbers do not lie you have to calculate a lot of people calculate they don't calculate profits but they calculate what is my cost how do I break even if you're always trying to break even you're going to be broke and in those businesses not only did I not try to calculate how to break even I was just hoping for the best you got a plan these things and make sure that how many Glatt how much inventory do I have to have to get the amount of sales that I need to sustain and support this business going long-term that was my big problem there the other problem was with that with that company was that I started it at the same time as I started a wealthy commercials and I was too focused III lost focused on wealthy commercials and I lost focus on the sunglasses business I was here and I wasn't there there were two completely separate businesses that required to completely separate skill sets that required two completely different sets of talents now I understand that in your business you should have multiple flows of income but it should be related to your core business so for example when we started wealthy commercials at least could give me one of those one cue pass one of our books when I started wealthy commercials I started off with like 2-minute corporate videos that's all I did I went from company in the company and started selling two-minute corporate videos now we have all kinds of other forms of revenue we do LinkedIn marketing for the videos we do Facebook marketing for the videos these are all new revenue streams we just started doing these which are really really fun they're they're called video brochures we do these for the nursing industry nursing home industry so we put the videos inside of these and now we're able to make money on the books as well we're able to make money by going to many many nursing homes and selling this concept and constantly upgrading it's not my poor business it's not the two-minute corporate videos but it's a cousin of what I'm doing and it's adding revenue and don't have to take my eye off the ball of my original business so when you when you open it up you could see here I know if you guys could see but the video starts playing like that it's super fun super cool super revolutionary for you guys on Facebook and Instagram we're the leaders in this industry right now we are killing it and it just took a little bit of thinking outside the box in order to okay thank you in order to get the thing going all right questions questions Facebook questions Facebook Instagram alright last thing that I want to go over with you I want to go over my main business mistakes and the main business mistakes that I see people making Ellie's how much time do we have two minutes okay cool great just to summarize main business mistakes that people make one is not calculating your profits you got to know how much product you have to sell in order to make a profit we're not here ladies and gentlemen to break-even we're here to make profits profits are after you have paid yourself after you've paid all of your staff after you've paid your rent your car insurance everything you can imagine what is left over then and another show we'll talk about what do you do with your profits because having it sit in the bank is not the answer we'll talk about that another time to going small it is more dangerous ladies and gentlemen to go small than it is to go big I've used it I've used this analogy a million times you have a rock you throw it at a cat it dies it's small the same rock third of an elephant nothing's gonna happen because it's big it could withstand the test of time it could withstand the blow you have to make sure that you go big don't go small don't be a wimp next choosing a saturated market that's a big mistake spoke about in the sunglasses business if everybody's selling the same product you get what's called commoditized meaning what you are selling is what everybody else is selling and the only reason why you're getting clients is because you're breaking your price breaking your price you guys saw that video brochure that I just showed you that is a non commoditized business corporate videos I'll tell you right now is a commoditized business but with a little bit of ingenuity you could create a product that you could demand and command more from the market for and break yourself from competing with everybody else taking too long to get to market as number four too many people tinker and and and think about their idea I know guys who have been working on ideas for three years if you're working on an idea for three years you suck okay it's not gonna work it's over just go home go work for somebody else if you're working on idea for three years it's gonna take another three years to get off the ground go to market ASAP with what's called an MVP a Minimum Viable Product whatever the minimum that you could do is bring that to market and have the market tell you if that is something that they like or something that they don't like don't wait until it's perfect to go to market with because you're gonna be sadly disappointed after three years that you're gonna have to sell your house flying under the radar don't go small go big tell everybody what you're doing if you don't tell the world what you're doing how they put how they're supposed to know I told somebody very very close to me this nursing home business and I'm doing with the with with the with the video brochures she said oh you shouldn't tell anybody then don't tell anybody how are people supposed to find out about me don't find under the radar fly it well above the radar and own your market which brings me to my last point which is compete do sorry competing and not dominating you want to dominate your market we don't compete in this business we don't compete to wealthy commercials we dominate our markets you ever see a dog go to a fire hydrant and he goes to the bathroom on the fire hydrant why because he wants every dog in the he wants every dog in town - no that's his fire hydrant don't touch it when I go to clients I put my arm around them and take a picture with them and I like the whole world know who my clients are why because I want everyone to know that's my fire hydrant don't even think about it come on Nate your markets don't compete we have questions before we end yeah what do you got how much time you have Ellie's guys guys why do you wait could you tell the call that we're gonna be five minutes late yeah okay cool who wants to know Alex who Alex first what I love you think of your comment lowest barrier to entry it's a very very good question Alex thank you for asking it let me just fix this up over here so it had a low barrier to entry so the dollars were high I was able to charge between ten twenty thirty thousand dollars for a production so the dollar amounts were high right it wasn't a lemonade stand and the barrier to entry so I'm just gonna put this as a barrier was low meaning I was able to hire I was able to hire people who were freelancers I didn't have to have my own equipment they had their own equipment a barrier to entry was low profit margins were high great question Alex what else you got you decided the business is dead when you're broke month after month after month after month after month and you stopped believing in it and everybody around you stops believing it when you're when you're broke get out of there now let me head let me give you a caveat is speak to somebody that you admire tell them your situation maybe you're in a great business but you're doing something wrong so you know you know you have the cut your losses when you see that everybody around you you know you're your mentors specifically don't listen to everybody by the way don't listen to your mother don't listen to your father don't listen your sister don't listen to your teacher for sure listen to a mentor that is has done what you want to do tell him your problem if he suggests getting out of that business get out go for it he's smarter than you or she's smarter than you get out what else you got single popcorn sizzle popcorn very good question in general I really don't care as long as the profit margins are high if you're selling you know if you're selling services if you're sell whatever service is out there and you're making a ton of money doing it go for it products a little bit difficult to get into the barrier of entry is a little bit higher for products because you have to have the capital to invest in the product you have to carry the product unless you're just brokering which is also a good way of doing it but I've been in the commodity business it's fun it's fun you pick up a phone call you pick up another one to organize the shipping and you make 40 grand like that which is really nice service business it's very intensive so I think they're both great just look at the profit margin we've got two more that are similar a dromedary and Panos elmo's ya know kind of how do you practice sales at the team or what kind of sales trainee are using for your staff sure so Pam is palos what's going on Avraham good men we use Grant Cardone here he's our guy he's our man most brilliant guy that ever met in sales God gave this man a blessing to be able to communicate sales success the guy is brilliant in every single way if you are not using grand car don't you are losing money every single day read my first book that if you never at any of his books I suggest reading sell or be sold will change your life and we practice a lot of times on each other we'll ask each other what will will protect I'll pretend like I'm the client and I'll grill my salespeople to pretend as if they are asking me questions and I answer all those objections so we practice before every single call and we train like heavy crazy people on Grant cardones training just read his books read people you got to read if you don't read you're stuck with what's in here and you were born with nothing if you don't put anything in you're gonna stay with nothing what else you got god bless let's make North America great again thank you for tuning in guys I really appreciate it [Music] [Applause]