If someone tells you that they’ve never made a mistake in business, feel free to call them a liar. Everybody makes mistakes. If they’re fortunate, the errors are minor and can be corrected before they do too much damage. If they’re unlucky, their mistakes can cost untold amounts of money. From making the wrong call at the wrong time to failing to respond to changes in the workplace, every business and every billionaire you’ve ever heard of has got it badly wrong at some point in the past.
We don’t like to dwell on negativity on this website, but sometimes there are lessons to be learned from mistakes made by other people. We all beat ourselves up when we make mistakes, but the more time we spend beating ourselves up, the longer it is before we start correcting our course. By telling you these stories, we hope to provide you with a bit of reassurance that no matter how bad your mistake might have been, someone far richer has made a bigger business error than you!
Taking Bad Tax Advice
This is a very common and familiar mistake. There’s rarely a week that goes by without somebody somewhere being accused of attempting to avoid their tax responsibilities. For the sake of providing a specific example, let’s talk about Ty Warner, the creator of the “Beanie Babies” empire. He failed to report an astonishing $25m in taxes and was forced to pay it all back, with civil penalties on top amounting to a further $53m. Even after eventually paying everything he owed, Warner narrowly avoided jail. Like so many before him, Warner tied to pin the blame on bad advice from an accountant. That excuse doesn’t wash in court. If an accountant offers you a tax solution that sounds too good to be true, it probably is. As much as we all loathe it, we have to pay our legally mandated share. Not only will failure to do so cost you even more money in the long run, but it will also paint you as a villain in the eyes of the public.
Lack Of Research
This is business 101. Before making any acquisition, you should research the market and find out what the current trends are. Take computers, for an example. Anyone with a working knowledge of the computer industry could have told you that laptops were beginning to replace desktops as the most popular personal computers at the turn of the century. Children in high school knew that. Carlos Slim, formerly the richest man in the world, somehow did not know that. In 1999 he paid $800m to acquire CompUSA. If you don’t know the name “CompUSA,” it’s because the company hasn’t existed since 2012. Slim saw the value of his acquisition hit rock bottom within two years of buying it and started closing it down in 2007. Slim is no longer the wealthiest person on the planet. Perhaps he would still be if he’d invested in a company building laptops and researching tablets instead.
Cutting The Wrong Costs
Cost-cutting exercises have to be carried out occasionally, no matter what type of business you run. It’s like pruning a plant when it’s become overgrown. Knowing which costs to cut and which to maintain is the key to success. Hewlett Packard is one of the biggest IT companies in the world, but when Meg Whitman decided to start an enormous cost-cutting exercise in 2012. Aside from cutting vital funding for internal research projects, Whitman write down almost nine billion dollars of the value of British software company Autonomy, which HP acquired the year before. That saw her dragged to court in the UK in 2019, where she was forced to admit that she’d miscalculated costs. She was also named the worst-achieving CEO in the world by Bloomberg in 2013, further sullying her reputation. The net effect of all this is that HP’s stock price fell almost forty per cent in twelve months. Cut costs by all means, but don’t cut away at things your business is likely to need.
Putting All Your Eggs In One Basket
Microsoft is one of the richest companies in the world, but they could be even richer if they hadn’t allowed Google to become so powerful. During the early days of the internet, there was no clear “number one choice” in terms of search engines, so Microsoft could and probably should have established itself in that role. Instead, Bill Gates chose to invest heavily in piracy prevention. All investments come with risks, which is why financial advisors will sometimes mention online slots websites while describing them to you. It’s possible that you’ll come away from an online slots website far richer than you were when you logged on, but the risk of loss is always there too. On this occasion, Gates wound up a loser. Perhaps that’s why he never joined the supremely lucrative trend of opening up an online slots site of his own! Yahoo briefly became the go-to search engine, but Google ultimately established supremacy. By the time Microsoft eventually launched Bing in 2011, it was too late to topple Google. Even today, Bing loses Microsoft more money than it makes.
Letting Opportunities Pass You By
There’s a lot to be said for listening to your gut. When your gut tells you to do something, and you have the means to make it happen, you’ll usually do better by following it than ignoring it. In 2003, Google founder Larry Page knew that social media was going to be a big thing. MySpace had just been launched, and a now-forgotten site called Friendster was already popular. Page saw the value in Friendster and tried to buy it. His offer was turned down. He then briefly considered the merits of launching a social media network of his own but eventually decided not to proceed because he thought MySpace and Friendster already had the market wrapped up. Three short years later, Mark Zuckerberg launched Facebook. The rest is history. There was a gap in the market for a better-quality social media site, and Zuckerberg found it. Page eventually tried to give the world Google Plus. The world didn’t want it. If Google Plus had come along before Facebook, the world would probably never have heard of Mark Zuckerberg.
Aside from being big mistakes, the errors we’ve highlighted in this article are also basic mistakes. Anyone could make them, and some of us routinely make them all the time. The moral of the story is that the people who made these mistakes are still successful. However bad the mistake you made today might have been, remember that it could have been worse. It’s not like you’ve failed to become the new Google!