Ten Things I Learned From Starting My First Small Business

I started my first on-line business with my wife in 2007. Divide and Conker started whilst we were doing a ski season in New Zealand.  Whilst this isn’t the business that keeps us fed and watered today, it was a profitable venture, and the lessons we learned are priceless.  Here are a few of our favourite ones for free!

1 – It’s Possible – anything can be done

We went from nothing at all to selling things to real customers within 6 months. That included designing our range of merino base layers and having them made to our specifications and building an on-line shop from scratch.

2 – It doesn’t have to be full time

We also went snowboarding a lot, travelled around New Zealand and Australia and took it fairly easy during this time. You could do it a lot quicker. We didn’t even have our own laptop. This means you can definitely do it whilst working full time.

3 – You don’t need perfection to start

In fact, you can never have perfection before you test it out. What seems perfect to you is probably not to your customers. Waiting to have everything just so in your eyes is pointless. Pushing yourself to launch before polishing is a huge advantage. Not only do you get to launch quicker, you will be less emotionally attached to the thing you’ve built that doesn’t work, and more able to change it.

4 – People do not behave as you expect them to

Test things in the real world. You are not your customer. They will behave differently to how you expect. Try things out, test, evaluate regularly. Surveys and market research can lie about what customers want. Customers’ money doesn’t.

We sold absolutely loads of merino beanie hats. They were an afterthought and we didn’t think anyone would be interested at the price we chose. We couldn’t have been more wrong, and they became a best seller.

5 – Getting the message out is everything

All on-line businesses work on a very simple formula: Visitors times conversion. If you have a 2% conversion rate and you have 1000 visitors, you have 20 customers.

You can only improve your conversion rate by trying things out on real visitors. So visitors, or traffic, is everything in the beginning. It feels wrong to work on attracting visitors when you might not think everything is perfect where you’re sending them, but it’s exactly what you’ve got to do.

I spent a long time learning to code a website from scratch, then a long time learning about Google Adwords. I should have absolutely done that the other way around. In 2013, with the widespread availability of e-Commerce software for free or cheap, it’s not worth spending any time building your shop, when you could be attracting the right customers to it.

6 – The relationship with your customer is hugely important

Think about how your product and overall experience can create a long term relationship. Can you can provide more than one thing which customers need, or something they’ll need regularly? Being able to serve a loyal set of customers well, is often easier than attracting the right number of new customers to keep your business going.

Listen to what your customers tell you, but not all of them. You can’t please everyone, and you shouldn’t try to. Delighting some is better than being so-so for everyone. Figure out who your real customers are work to serve them.

7 – You can be honest about size

Professional doesn’t have to mean big. When we started out, most of the advice was to give the illusion of size.  I don’t think that’s good advice any more. Small businesses can do things big ones can’t. Take advantage and give exceptional, personal service wherever you can. Customers don’t care how big you are if you meet their needs perfectly.

8 – You need to understand SKUs if you plan to sell physical things

A SKU is a Stock-Keeping Unit – an unique type of item which you sell. This is very detailed, and only significant if you want to sell physical goods, however, it can make the difference between roaring success and expensive failure. We thought we’d have a small range of goods to begin with. We started with 5 different items of clothing, which we thought was small, but comprehensive.

  • Then we realised:  5 for men, 5 for women = 10 different things.
  • 5 Different sizes for each and we were at 50.
  • 2 different colours = 100 different unique items which we needed to keep in stock.

Predicting how much of each to buy is incredibly hard, and when you sell out of something, you’re excluding a section of your customer bed on their gender or size. Not cool for them or your profits.

I’m not saying you shouldn’t sell physical things, but be aware of the challenge. Some are more tricky than others. I have a draft post in the works about choosing physical products to sell. Let me know if you want me to move it up the pile.

9 – It’s hard to sustain things you don’t have passion for

The process of setting up the business, which we found exciting and fun, was very different to the daily picking and packing, which we were definitely less keen on.  We had a clear plan for the set-up, but didn’t set out the ongoing goals well enough.

10 – You will never know if you don’t try…

And you never know where it will lead. Our first business wasn’t our long term venture, but we learned so much that it has lead us into places we could never have gone before starting. Keep the financial stakes as low as possible and look at your first business as a learning experience not just a money making opportunity. Do it this way and you can’t lose.


I’ll be speaking about some of these lessons, plus a whole host of others, at an Entrepreneur Roadshow next week.  It’s in Hampshire in the UK, so it won’t suit everyone, but if you happen to be in the area I strongly suggest checking it out the event. If you’re coming let me know – it would be great to say hi.

1 comment

  1. Gretchen Behnke

    This was a fantastic post that came at just the right moment for me. Your perspective from having been there before is hugely helpful. We hear the message “start before you’re ready” a lot and it’s great to be hearing the same thing from you with a concrete story behind it. These three points have been bumping around inside my head for two days since I first read this: 3.quicker launch means less emotional attachment, 4.you can’t know precisely what customers need, 5.attract the right visitors early. Thank you, Rob!

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