"If you want to succeed in business, you're going to have to make a lot of mistakes."
That's true. But...
it's not the mistakes themselves that matter.
Many business owners make lots of mistakes, and don't survive them. In fact, that's true for the majority of small businesses.
They make pricing mistakes; they order too much inventory; they shoot for the moon with their restaurant design or gym equipment. Then they run out of money and it kills their business.
The more fragile your business, the more impact a single mistake can make. In a book that I wrote for gym owners ("Start A Gym",) I wrote that every mistake made at startup requires at least six months to correct...and, sadly, many gyms can't survive long enough to fix their mistakes.
The key to success isn't making mistakes--it's learning from mistakes, and never repeating the same mistakes twice.
The US military calls this the "OODA loop". In previous articles, I've referred to it as the Audit Cycle. Business schools call it the "Evaluation Process". My seventh-grade teacher called it "The Scientific Method" and my high school teacher called it "Evidence-based decision making."
It goes like this:
Of course, this system only works if you measure your results.
If you try something -- like running Instagram ads -- and you get ten new leads, then you don't really know if the advertising was successful until you compare it to something else.
Did you get ten new leads without the ads last month?
Could you have earned twenty new leads if you'd done the same ads on Facebook instead?
Would you have earned twenty leads with a different Instagram ad?
Would you have earned twenty leads if you'd doubled your ad spend with the same ads?
You don't know--yet. But measuring the efficacy of the first ad means you have a baseline to compare against.
The next month, you can change one of these variables, and measure against your baseline: ten leads.
This is how science works. This is the process of empiricism on which empires are built.
Now let's apply this to making mistakes.
Let's say you have people coming into your shop, but they're not signing up.
Are your prices too high?
Does your service not solve their problem?
Did you not explain your service in a way that evokes value?
Does your advertising attract the wrong people?
Your hypothesis is that your prices are too high. But you don't know until you measure, because your first attempt at pricing your service was a straight-up guess.
First, you measure your close rate.
Then, you look at the variables you can control: your price, your advertising, your sales process, your sales skill.
Then you choose one--and only one--variable to change. Since changing your prices carries the largest risk (if you're wrong, you're underpriced; if you're right, you have a different problem), you change your sales process.
You try a new sales process for the next ten leads, and measure the change.
If you sell more of your service, great - you keep the new sales process going.
The next test might be upgrading your sales skills. You work on those, and track the results over the next two months. Did your sales improve?
Real business "experience" has little to do with how much time an entrepreneur has spent owning a business, and everything to do with how many mistakes they've corrected.
The biggest challenge in entrepreneurship isn't that our first decisions are guesses. Of course they are--and most of our guesses will be wrong. We're going to make mistakes. What kills businesses is when entrepreneurs compound their guesses--and compound their mistakes.
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