5 Lessons Learned From My First Business

It seems like a lifetime ago that I started my first business, maybe that’s because it is.  I learned a lot of lessons from that first venture, most about what not to do.

My First Business

The year was 1984 and I was 7 years old. I was the sole proprietor of a newspaper distribution company, call it old media, but newspapers were my game.

This was back in old days, before the internet, when people would get their news by reading words written on actual pages – don’t laugh, but many people would actually pay to get their news this way, including my parents.

At 7 I knew enough to know that I wanted some money, I was sure if I could get my hands on some cash I’d be out on my own in a couple years living the good life.

I also knew that these things called “papers” would stack up for a couple weeks before my parents finally took them to the trash.

An Idea is Born

I thought if my parents were reading these papers, and paying for them, the neighbors probably were reading them too, but maybe not all the neighbors.

I asked my mom how much a paper cost, then asked her if I could have the old ones, she said ”you can have the old ones, but don’t go leavin’em laying around the house!”

My business is born!  I would go door to door with the old papers my parents had and see if I could sell them for less than a new paper to any of the neighbors.

I thought maybe they didn’t get the paper so would happily pay for mine, or possibly they missed an issue and would want to catch up. If they didn’t have this thing called a “subscription”, heck maybe I could sell them a paper everyday.

My distribution mechanism was simple. I loaded up the papers in a duffel bag and headed out, knocking on every door within the neighborhood within my limits.

At that time I had boundaries set by my parents that I wasn’t supposed to cross. I was the paper czar of nearly 5 square blocks – I was in business!

5 Lessons Learned from My First Business

So that is how I spent everyday after school the two weeks I was in business. Knocking on doors trying to sell yesterday’s paper (or sometimes yester-weeks paper).

As I think about it now, it seems silly. As adults, we all can spot the flaws in my thinking, and even though I wouldn’t try something similar today – I made money!

Being able to make money selling old news taught me a lot about business, here’s five things I learned:

Lesson #1: When You’re in Business People Buy You as Much as Your Product

I was a moderately cute kid, with tons of ambition, and nothing but confidence in my paper business. When I talked to people at their door step they felt that. When they bought a paper from me, they were buying me, not the news that happened 6 days ago.

This lesson is as applicable today as it was then. Although we may not all be fresh faced kids anymore, people will sense when you are passionate, confident, and believe in what you are doing – and that’s what they’ll be buying a good portion of the time.

Lesson #2: Great Entrepreneurs Think on Their Feet

I learned quickly that in order to sell these papers, that weren’t as desirable as I thought they’d be, I better have answers to their questions – which mean’t thinking on my feet.

I remember on that first day being asked, “Why would I want to buy yesterdays paper, that stuff’s already happened”…I replied with “Well, today’s paper is filled with stuff that already happened too, but mine’s cheaper.” He bought a paper. My mom said I was being a smart aleck, I politely disagreed.

If you want to be a great entrepreneur you need the ability to think quickly on your feet. Responding to demands, making quick (good) decisions, and dealing with the numerous curveballs are essential to success.

Lesson #3: Competing on Price Alone is a Tough Game

My only selling point, and the only way I could sell even one of the old papers was to give discounts. At the time I thought this was shrewd, now I think it’s dangerous.

I had no competition in my neighborhood, and probably never would have selling old news, but what if another 7 year old (or a super bright 6 year old) had of come up with the same idea?  We’re both knocking on doors, how do we compete with each other?  Most likely price, which means it wouldn’t be too long until the pennies I was making didn’t justify the trouble, and I’d have a hard time making it up on volume.

Same goes later in life. You may be the only game in town now, but what happens when you’re not. Will you be competing on price alone, or do you bring something to the table your competitors don’t?

Lesson #4: Think About Scale Early in the Startup

I gave this absolutely no thought. I just wanted to sell some papers, and beat myself ragged going door to door I guess. If this venture had been a huge success I would have had no way to meet the demand – shoot, my parents only let me go about 5 square blocks, I would have been sunk right there.

The lesson here is that early on begin to think about how you may scale up if you’re business becomes successful. How will you reach more people?  Who will do the additional work? Can you scale? If you charge per hour, there are only so many in a day – how do you get more revenue without raising your price? If you sell a physical item, how many can you get and how can you distribute to more people? Just ask yourself these questions early, and prepare for growth going in.

Lesson#5: It’s Hard to Overcome a Flawed Business Model

We can all see the problems with my business model. Yeah, I sold some papers, but long term the flaws were going to bring my business down. If you’re not going into a venture on solid business foundations, you’re house is going to start leaning, and eventually fall over.

The Long Defunct Newspaper Distribution Company

I’ve been out of the newspaper distribution business now 25 years, but some of the lessons I learned back then are still with me today.

The real lesson in all of this is it doesn’t matter if you sell newspapers when you’re 7, lemonade when you are 10, or run a multimillion dollar company when you’re 40, the fundamentals of business don’t change.

Keep moving forward while learning from the past and you should be okay. And for anybody thinking about it, I can’t suggest you getting into the newspaper distribution business!

Photo Credit: Meanest Indian

 

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