In today’s episode, David will share his failed business experience and the lessons he learned from it. He realized later on, which you should realize as early as now, that just because you can do something doesn’t mean you should do it. You should consider this thought especially if you also want to fire the man. David is willing to try this business again, though, but this time, he’ll do some things differently.
Listen to this episode and learn from this failed e-commerce business!
[00:01 – 01:52] Opening Segment
- We introduce our topic for today
- Key lessons in a failed business venture
[01:53 – 10:19] Woodworking Business
- How did David start his woodworking business
- Don’t miss this pro tip from David
- The biggest investment in David’s woodworking business
- Why was this business model not enough to fire the man?
- Great hobby but not a great career
[10:20 – 21:07] Lessons from David’s Failed Business
- “Having fun” and “firing the man:” Can they work together?
- Points to consider
- Want some Amazon refunds? Check out Getida
- Promo code: FTM400
- Lessons David learned from his unsuccessful business venture
- “Just because you can doesn’t mean you should”
- Proof of concept
- Understand cash flows
- The true purpose of a hobby
- What David will do differently this time
[21:08 – 23:54] Closing Segment
- Will David try this business again?
- Connect with us. Links below
- Final words
“If your goal is to fire the man, get a good understanding of how much annual cash flow you’re gonna need or even monthly cash flow or weekly cash flow.” – David Schomer
“When you learn a tough lesson firsthand, it sticks.” – David Schomer
“I think when you get emotions into business, it’s to the detriment of yourself, your time.” – Ken Wilson
Do you have a similar experience? Send us a voice message and let’s see how we can help you!
Email us –> firstname.lastname@example.org
Real quick before we get into the show, I wanted to share a new service called Getida that Ken and I have been using that has made us over $10,000 in Amazon reimbursements. The service requires no monthly subscription, and getida collects a small percentage of the money they recover for you. It takes less than five minutes to set up and works on all Amazon marketplaces. Go to getida.com GETIDA, and enter promo code FTM 400. That’s FTM for firing the man 400 to get your first $400 in reimbursements commission free. How much money does Amazon owe you? How many of these could you make a year and you know, what’s that look like from a profit standpoint. And if it’s nowhere close to replacing your salary, or meeting your financial requirements, great hobby, not a great career. If your goal is to fire the man, get a good understanding of how much annual cash flow you’re going to need to bring in monthly cash flow or weekly cash flow. But that’s going to allow you to back into the feasibility, right. And I think that plays an important part in the proof of concept. So you know, if you know that you need $60,000 a year, and you’re making 10 bucks an hour, you better have a lot of free time. If you start off self manufacturing, doesn’t mean you need to end self manufacturing, you can make that pivot.
Welcome everyone to the firing the man podcast a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you were capable of more than join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts, serial entrepreneurs David Schomer and Ken Wilson.
Welcome everyone to the firing the man podcast. on today’s episode, we take a deep dive into my first ecommerce venture that failed, and discuss the key lessons and takeaways. We often hear crazy success stories, but often do not hear people talk about their biggest failures. That said, we believe there’s some valuable lessons that can be learned from these failures of others. And so that’s what we’re gonna do today is take a deep dive into a failure of my own. What’s going on Ken?
David, glad to be here in the studio taping another episode. This is a great episode. I think it’s a topic that’s not discussed often enough. And I think there’s so many lessons learned from, you know, trying something and it doesn’t succeed and moving on. So yeah, I’m excited to be here. And let’s get right into it. So tell us about the business and how you got started.
Absolutely. So this was a woodworking business. And specifically I made wooden cutting boards. I’ve always liked woodworking and it wasn’t until my wife and I moved out of an apartment into a house where I had a garage that I could actually do some woodworking. And I don’t know where I saw it. I think it probably was like a Facebook video or something. But someone was making 3d cutting boards. And which is kind of hard to imagine, but it has a bunch of geometric patterns that makes it look 3d, Ken you’ve seen them we have a couple at my house. And so anyway, I decided I wanted to make some 3d cutting boards. And, and so just made some on a cheap table saw that I had, and gave them away to family and friends and got really positive feedback. And it was like my token wedding gift was I would always make a cutting board in my woodshop. And I had a ton of people tell me, you should sell these. These are really good, you should sell these. And every time someone told me that I probably got a nice little dopamine hit, felt good about myself. And after enough people told me I decided well, I’m gonna make a run at this. I like woodworking in the evenings. It’s a nice relaxing thing to do. So I’m going all in on making cutting boards. And so that’s kind of how this this all started.
Sure. So I like that, you know, you started a business on something that you liked, you’re passionate about, you know, woodworking and stuff like that. So when you started getting those dopamine hits, people were like, Oh, you know, you should sell these, you should do that. What did you do? Like, did you get some equipment? What did it take to get this operation up and going?
Yeah, absolutely. So this is a pro tip for anybody that is getting married, or anyone that has been married knows this process. Typically you go and register for gifts. And typically that would be like towels, plates, wine glasses, like things for a house, which makes sense. Like, you know, we’ve purchased plenty of these items for our friends. Of course, I knew we were going to get some cash. And so I talked to my wife and said, Listen, you can register for whatever you want. I don’t even need to be involved in that process. However, I want to earmark $2500 of cash, and I want to buy myself a table saw with these wedding proceeds. And that was a great compromise, right? She got to register for all kinds of stuff. And I earmarked the first $2500 of cash for a new table saw. And I’ll tell you what this wasn’t any table saw, the brand is called sawstop. And it’s just an engineering work of art. It’s beautiful, I love my table saw. But the thing that makes sawstop special is you cannot cut your finger off or anything off, it senses moisture. And like you can cut through really thick wood all day long. But if you were to try to cut a hot dog on it, which would have like the same consistency of like your finger, the blade stops immediately. And so obviously, like I make a living with my fingers typing on keyboard, and table saws can be dangerous. And so my grandpa, actually he didn’t lose his thumb on a table saw, but lost it in a piece of machinery. And I’ve always been sensitive to the fact that I want all 10 of my digits, you know, up top. And so that really appealed to me. And on top of that, it was just like a really high performing tablesaw. So it probably sounds like I’m sponsored by them. I’m not, I paid full price. But sawstop if you’re out there hit us up. So anyway, we got married, I earmarked 2500 bucks, went out and bought a table saw. And then I went and bought some other just nice tools. So it was a router and a table and a sander. So I would say like in terms of equipment that I needed about 3000 bucks is what I spent. And so you know, not a huge upfront cost. I still own all of those items, and you know, enjoy using them today. So it wasn’t a total loss. But anyway, that was kind of how I got started.
Excellent. And yeah, you know, I have heard of that table saw or that saw brand. And I’ve seen some YouTube videos. That stuff’s pretty incredible how the blade just kind of stops right there. So that’s awesome. So you know, now that you have your equipment, you got the woodshop set up, you got clearance, you know, to make these cutting boards, how long does it take to make each board and what was your, you know, the business sense behind it, profit, margins, things like that?
Absolutely. So the biggest investment on these cutting boards was time. So the general business model that I followed was it would take about four hours to make one board. And I was selling these for about 100 bucks a piece. I mean, they were nice, it was a high end cutting board. And so after all my supplies, I was making about $40 profit per board. So in a roundabout way, I was paying myself $10 per hour, which is not bad, I’ve spent a ton of time woodworking for free. It’s a hobby of mine. And so that low dollar per hour initially wasn’t really surprising to me. But it just my goal was to fire the man. And this was very early on. But I thought to myself, you know, if I could do woodworking full time, people always say like, if you do what you love, you’ll never work a day in your life. And so I was thinking, you know, I would be happy to make a little less. But if I could do woodworking all day, this would be awesome. And so now I didn’t like map out that $40 per board, you know what it would take to fire the man. And that was a key mistake. And so, but let me just dive right into this. So I was working a full time job at the CPA firm, I had about two hours per evening that I could dedicate to making these cutting boards. And I figured you know, in a given year, I may have 250 free evenings that I could go out after my wife went to bed and do some woodworking. And I was making $10 an hour. And it was at that point that I did this math and realized, Oh, this only adds up to $5,000 annually, to where I realized like, Okay, this is a good way to maybe earn a little additional money on the side or pay for tools. But this is not a long term feasible activity to fire the man. And so that was a, like, incredibly valuable lesson early on, you know, people that are thinking about self manufacturing, you know, I would think about this very early on is how long does it take to make it? What’s your profit margin? And, you know, given all of your other commitments, how many of these could you make a year? And you know, what’s that look like from a profit standpoint? And if it’s nowhere close to replacing your salary, or meeting your financial requirements, great hobby, not great career. I mean, I hate to say that but like it’s not.
Yeah, I would definitely like to stop here and make a point of exactly what you just said, David, I’ve met a lot of people that bring me ideas and you know, or someone that has a hobby that they’re like oh, I can you know do this and make all this money and quit my job and you just highlighted a perfect scenario. So making these cutting boards is something you enjoyed right and you liked it and it was profitable, but at some point in time and it was likely that you know, you’re an experienced CPA and so in your head you thought What the heck this is not scalable the math doesn’t work out. And so you decided, Hey, I can’t do this. It’s not scalable. And it’s not going to get me to my goal of replacing my income to be a full time business. And so that is something that anybody that has a side hustle or, not only a side hustle, but a hobby, something you enjoy. And I think when you get emotions into business, it’s to the detriment of yourself, your time. And so you really need to maybe take a step back, if it’s a hobby, and you enjoy it, but it’s not producing enough cash either or it’s not scaling. You have to make that decision, okay, I can’t do this anymore. Or I can’t, it’s not a feasible business, I can’t scale it to accomplish of quitting my job. So maybe just table it or say, Hey, this is my hobby, I truly enjoy it. I’m gonna do this, whatever. But definitely, I mean, that was a great point where you bring up like, Hey, you saw the numbers, you saw the math and you’re like, it doesn’t work out, this is not going to accomplish me quitting my job. It’s not scalable. So excellent.
One thing I want to add to that, and you brought up the point of like having fun, and that is something I want to talk about that a little bit. So if I think about what I like about woodworking, typically it is that everyone’s in bed, it’s just it’s David time, right? I can just go out to my woodshop and work on whatever I want to. And I like that I can work on cool projects, I’ve got really no deadlines. Like I’ve got a number of like cutting boards. For instance, I’m going to a wedding in two months, and shout out Joe Kelly, you’re gonna get a sweet cutting board. And so I know, okay, I’ve got two months to finish this, there’s no rush. And so and I’m loving this process of building this. And but immediately when I switched over to the business mindset to where I was going to commercially produced these, it was no longer woodworking at my leisure, it was woodworking to meet certain deadlines. And so what happened was, I would get home from work, and I would have a couple orders that I needed to fulfill. And you know, I told you about that production time, you know, being three days. And so it was actually turning into an additional job. And I didn’t like woodworking as much. And so I’ve noticed like since I’ve taken a step away from this company, I fallen back in love with woodworking, but it was kind of a grind. And the other thing that I’d say is like I was not working on purely what I wanted to work on, I was working on what was being ordered. And so like I had this one board that was plain, it was just striped. And it was easy to make. It didn’t really challenge me in any way. But it was a lower price point. And it sold like hotcakes. And like some of my higher end boards that sell for like 200 bucks, which I loved making, they didn’t sell very often. And so I found myself stuck making the same thing over and over that I didn’t really enjoy making. And so anyway, that was something that, you know, the fun piece of it is, if you’re thinking about taking one of your hobbies and turning it into a business, think about like, would this still be fun to me if I had demands of other people if I had orders to fulfill if I had, you know, external pressures, because oftentimes, like external pressures don’t exist in your hobbies, you just kind of do them at your leisure. Right. That’s why they’re a hobby. And so anyway, kind of went off the path here, but I’m glad that you brought that up. Sorry to interrupt the episode, you may have heard Ken and I talking recently about a new tool that we’re using for Amazon refunds. Now I have used other refund tools like this. However, I can tell you in the first seven days, they scrubbed it, the back end of my Amazon account going back 18 months, and found $5,000 of refunds. And the nice thing about this is, it’s my money, Amazon made a mistake, and they are just auditing my account. The other thing I really like about this tool is there is no monthly fee, they only charge a commission if they are successful in getting you your money. Go to getida.com GETIDA and enter promo code FTM for firing the man FTM 400. This is an awesome tool. I can’t say enough good things about it. Now back to the episode.
So to kind of center back here, you know, whenever we try a new project or new business idea, and it doesn’t work out, you know, I learned more from that than I do when I try something and it works. Right. So can you run through some of your lessons learned for this business?
Absolutely. So the first lesson that I learned was just because you can do a good job manufacturing doesn’t mean that you should. And this is, you know, essential to this story is that I was good at manufacturing. I am good at making cutting boards. But I think that my time would have been better spent working on the business not in the business. And we say that all the time on this podcast. And when you’re doing your own manufacturing you’re really working in the business and so, not to say that you shouldn’t work in the business sometimes, but I do think that that was a key takeaway. You know, the second thing was to do a proof of concept much earlier in the process. For instance, I probably had made and sold over 100 cutting boards over the course of like three or four months, before I ever did that math of two hours per evening. 250 evenings, at $10 per hour. And I’m a CPA, which is embarrassing, really, you know, really, after my first cutting board, I could have timed how long it took me, I could have figured out what my material cost was, certainly after my first one, I could, you know, build in some, you know, efficiencies gained after I make a lot of these, but I would have known, you know, after my first board that this is a $10 an hour activity. And so I think that had I done that proof of concept and a little bit of mental math early on, that would have really helped me probably not dive all in on this, and probably would have kept it as a hobby. Because when I got into it, man, I was thinking about, you know, making six figures selling cutting boards, and if I were to do it full time, there literally would not be enough hours in the day, you know, if I was just making cutting boards and sleeping, I could not have made this work. And so anyway, that’s a proof of concept. Huge, huge lesson learned. You know, the third lesson that I learned was, if your goal is to fire the man, get a good understanding of how much annual cash flow you’re going to need, or even monthly cash flow or weekly cash flow. But that’s gonna allow you to back into the feasibility, right. And I think that plays an important part in the proof of concept. So, you know, if you know that you need $60,000 a year, and you’re making 10 bucks an hour, you better have a lot of free time, right to where you can dedicate to the side hustle, because it’s hard to replace that $60,000, especially when you’re working a full time job. And so my goal at that time was to fire the man to quit my full time job. And had I kind of done this mental math earlier, I would have been a lot better off. And one final lesson that I learned is, if you have a hobby, like really drill down into what you like about it. And you know, using this example of cutting boards, obviously, I really liked making a beautiful product that would stand up for a long time and be durable. That was probably half of it. But the other half that I loved was giving it to family members and friends. And just you know, as a gift, or you know, just giving it to them, I love that. And it would be really cool, you know, a couple months later to go back to their house and it’s presented like they have it on their counter, like as a decoration, or they have it above their cabinet, it just like brought me a sense of pride. And so that’s what I liked about it. Now, in a customer facing environment, you strip away half of that enjoyment. So right, you’re no longer giving away your products. Generally you don’t know your customers, you’re not going to see them, you’re not going to go to their house and see the cutting board on their island. And so all of a sudden, you know, half of what I liked about this whole process disappears. And you know, I didn’t think about that on the front end. But that was a really valuable lesson learned.
Yeah, absolutely. So no, those are great lessons learned. Yeah, and thanks for sharing, because, you know, you often hear about everyone’s success stories, but you know, hearing about, you know, times when you struggle and what you’ve learned to improve and move on. And that’s really valuable. So David, knowing what you do now, do you think you could make this business successful? Now?
I do, I do. And I’ve intentionally chosen not to just to kind of protect this hobby, it’s something that I love to do. But there are definitely things that I would have done differently. And, you know, the first thing starts with the self manufacturing. So what I could have done is made a really sweet cutting board, that was like a really nice end product, and documented the process and then taking it to somebody, perhaps a retired woodworker that would be happy to work for 10 bucks an hour, that you know works in a shop for free every day. So 10 bucks an hour would be great. You know, I could have like outsourced manufacturing. And I think that that would have allowed me to continue to work on my business, not in my business. But, you know, to the extent that we were like launching a new product, I still could have been in the woodshop like creating prototypes and doing what I actually like to do, which is the creative part of this. And so I think that was you know, if you start off self manufacturing, doesn’t mean you need to end self manufacturing, you can make that pivot. And I think in a lot of ways you may be at an advantage because when you self manufacture, you see all your mistakes. And you know, when you get products back from a supplier you’re sensitive to those mistakes, you know, where they generally appear. And so that was one thing I probably would do differently. You know, the other thing that I would do is I would’ve just priced my boards higher, what I did was I made some really nice 3d ones that weren’t selling. And so I started creating lower priced boards that were easier to make. And those margins were generally like tighter margins. And so, I’ve heard someone talk about, there’s this tattoo artist out in LA, he’s got like a four year backlog. And he’s super expensive. And one thing that’s unique about him is you don’t choose the art, he chooses the art, you just sign up with him. And then he’ll tattoo you. And you know, if you look at that business model, he prices his services incredibly high, he only does really high quality stuff. So for instance, if you wanted three leaf clover or something like very basic, he would not do it, he does not have a low price point option, it’s only a high price point. And so that would have been a move I would have made differently is I would not have introduced the lower price boards, I would have just stuck to my guns and stuck with the higher end one because that’s what I like to do. And two, they definitely have a higher profit margin. And then the last thing that I would have done is I would have looked for cheaper materials, which in this case would be wood, you know, I was just buying from a local supplier, I wasn’t buying in great enough quantities to you know, buy an entire truckload of wood. But after the fact, I have found lower cost suppliers, and I would have shopped around. And I think like to our listeners, if you have an active supplier relationship, it doesn’t hurt every so often to see what else is out there. You know, because you may find a cheaper option with the same or better quality. And so, you know, I had my one place that I went to get wood, and I just never deviated from that. And so, and that was my biggest input cost aside from my labor was the materials.
So to kind of wrap this up, you know, that business venture that you started wasn’t super successful. You know, the classic question is, if you had to do over again, would you?
Absolutely, absolutely, you know, in total, I probably lost a couple 1000 bucks in this business. However, I would say I probably learned somewhere between like 25 and $50,000 worth of lessons, which have paid dividends in other businesses that I’ve started. So that’s one thing that you know, at meetups, people say like, what if it doesn’t work? Or what if I fail, I can guarantee you, you will get something out of the process. And like, I’m glad that I had this failure, because I got all of those lessons. And I can tell you, when you learn a tough lesson firsthand, it sticks it has some real sticking power. And so yeah, I absolutely would have done this. If I could go back in time, I would have repeated this, I don’t view it as a mistake. I view it as just part of my windy path to where I am right now. And so I would say don’t shoot for failure. But if it happens, embrace it and take away some lessons because what’s happened has happened. It’s in the past and all you can do is move forward.
Yeah, absolutely. You know, I really appreciate you you know, sharing your experience this business venture with the audience. You know, I’ve learned from it. I hope everybody else that listens learns something from this. It’s not often that people share their, you know, their failures or their mistakes or lessons learned and it’s truly valuable. For any of the listeners out there, if you have a story that you want to share with a business venture that failed. You know, hit us up, shoot us an email, we’ll get you on the show to share your story because I think it’s very valuable email@example.com. Thanks, everybody for tuning in. today. We’re out.
Thank you everyone for tuning in to today’s firing the man podcast. If you liked this episode, head on over to firingtheman.com and check out our resource library for exclusive firing the man discounts on popular e commerce subscription services that is firingtheman.com\resource. You can also find a comprehensive library of over 50 books that Ken and I have read in the last few years that have made a meaningful impact on our business, for that head on over to www.firingtheman.com/library. Lastly, check us out on social media at firing the man, and on YouTube at firing the man for exclusive content. This is David Schomer
and Ken Wilson.We’re out.
Before you go we wanted to share a new service that Ken and I have been using called getida that has made us over $10,000 in Amazon reimbursements. The service requires no monthly subscription and getida collects a small percentage of the money they recover for you. It takes less than five minutes to set up and works on all Amazon marketplaces. Go to getida.com GETIDA.com and enter promo code FTM 400. That’s FTM for firing the man 400 to get your first $400 in reimbursements commission free. How much money does Amazon owe you?
Transcribed by https://otter.ai