My Biggest Mistake in Business: How I Screwed Up and Lost $25K

I should really call this episode…

“My Big Dumb Newbie Mistake and How I Lost $25,000 Selling to a Big Box Store”.

No, it’s not a joke. My biggest mistake in business was when I screwed up an order with a major department store and it cost me waaaaaay too much money. And confidence. And shame.

It’s never fun when you screw up, and I’ve made a gazillion business mistakes during my gazillion years as  a business owner, but the mistake I’m sharing today is particularly epic.

This one hurts because it was avoidable. The mistake happened because I didn’t trust my gut, my instinct.

And not trusting my gut lost me $25,000. Here’s what happened…

Listen here – or you can scroll down to read the full story below.

You can also listen on iTunes and Stitcher Radio

Mentioned in this episode:

• The Chicago Tribune Series, My Biggest Mistake
• Jane’s biggest mistake in the Chicago Tribune
• Monthly business coaching with Jane, Imperfect Action
• Free Class: How to Create Content Calendar that Leads to Actual Sales
• Marshall Field’s and what it mean to Chicago: Smithsonian Magazine

After you listen (or read below) to this episode, tell me this…

Have you experienced something like this?

Can you give me a specific example (in the comments below) of a business mistake and what you learned from it? I can’t wait to read your comments!

Thanks for listening (and reading),

Jane

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If you prefer to READ the story of my biggest mistake, here it is in written form. 🙂

This article is adapted from the one originally printed in the Chicago Tribune.

I could title this story…

“My Big Dumb Newbie Mistake and How I Lost $25,000 Selling to a Big Box Store”.

No, it’s not a joke. My biggest mistake in business was when I screwed up an order with a major department store and it cost me way too much money.

One thing I talk about repeatedly is the importance of being a business person first, and a creative person second. That’s assuming you want a business that makes money. As a brand new fashion designer, I made tons of mistakes. One of the epic ones was when I didn’t trust my gut, and it ended up costing me $25,000 in sales. Here’s what happened…

I get my first big order

I was 25 and barely out of fashion design school when I started my own clothing line and began selling my designs out of my own women’s clothing boutique in Chicago. Just two months after I opened, a buyer from a major department store (Marshall Field’s/Dayton Hudson, now acquired by Macy’s) walked in, and soon I shipped my first order to four of their stores. I was thrilled!

Things went well and I remember the buyer saying my pieces had a better sell-thru than one of Oscar de la Renta’s lines. Sweeeeeeet.

I ran into trouble with the second delivery. I had ordered the fabric with plenty of lead time, but when it was two weeks late I finally heard from the fabric supplier. The black fabric I ordered was out of stock, and could they replace it with a “charming forest green”?? I had promised the store outfits in two colors — red and black — and I was afraid I’d lose the whole order if I only delivered the red colorway. Since there was no time to order this exact fabric in black, I sent a swatch of the green to the department store buyer and to my surprise, she approved it.

I get a sinking feeling in my gut

I was surprised. Because I had a sinking feeling in my gut.  There’s a reason why black is so popular. It’s slimming, hides dirt and goes with everything.  Women know this, I know this. I should have listened to my gut then, but I really knew things were wrong when I was packing the boxes of red and green — it looked so Christmasy — but after all, the buyer had approved the switch, so it had to be OK, right?

Well, my gut was right. The green did not sell. It was a disaster. The department store buyer told me I had two options —  I could take the green outfits back or I could give “markdown money.”

What is markdown money?

I was a new fashion designer and had never heard of markdown money, which is when the designer gives a credit to the store when the designer’s merchandise has to be marked down. I was horrified, but I agreed to it because I was afraid of losing future business.  I agreed to give a credit on a future order to the tune of $25,000. My business would take a major hit, and I was scared.

Learning to trust my instincts as a business owner

I was mad at the buyer — why should I give the markdown money when she approved the green fabric swatch?  She should have taken it out of her own check. Angry sigh…

But then I realized I was equally to blame, and I was just as frustrated with myself.  I KNEW that green color was wrong. I literally got a sick feeling in my stomach when I saw it. It just wasn’t right. But I was too excited and I wanted the order so badly.

The good news

This mistake didn’t put me out of business. I learned from it and now I don’t ignore that feeling in the pit of my stomach. Ever.

My mistake was costly and embarrassing, but I was – and still am – determined to learn from it. My wholesale line and my brick and mortar store both survived.

It’s not fun to lose $25K but it wasn’t a dream killer.

So tell me this… Have you experienced something like this?

Can you give me a specific example (in the comments below) of a business mistake and what you learned from it? I can’t wait to read your comments!