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Seven incredible business mistakes that nearly meant shutting up shop

They say business mistakes are a big part of the entrepreneurial journey, but how do you recover from spectacular ones that threaten all of your hard work?
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J&J gin

What works for one product doesn’t necessarily work for another, as John Burke and Jon Hulme found out

Launched in 2015, Craft Clubs has 18,000 active subscribers and has sent over 90,000 surprise monthly booze boxes. John Burke and Jon Hulme answer our questions on business mistakes.

Business mistakes example

We learned the cost of underestimating the complexities involved in entering new markets.

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After having been so successful in gin, we rather naively assumed we could just copy and paste the model into sparkling wine and everything would work out just fine. We soon discovered our lack of prior market research would result in problems.

Impact it had

It meant we were much slower out of the blocks that we had hoped. To start with, growth came slowly and hitting our margin targets proved difficult, both of which meant revenue forecasts were missed.

In retrospect

Hindsight is a wonderful thing, and looking back now we did seem rather naive, so yes, we should have seen it coming. That said, the only way to truly understand about a market is by “getting onto the pitch”, so there was also lots gained by moving as quickly as we did.

Avoidance technique

We should have taken time to talk to more people in the wine industry in advance, particularly people in our supply chain – winemakers, importers, agents and distributors, to really understand the mechanics of the industry and the particular peculiarities of the market.

Resolution effort

We had to adapt and learn as we went, which made for a tricky start, as we were conducting research on the hoof, at the same time as undertaking real-time purchasing negotiations. We also had to tweak our product offering slightly as we went, according to what we were learning both about the wider industry and our particular consumer base.

Mistake learnings

We learned that booze retail is more complicated that we had imagined, and that success in one category doesn’t automatically mean you can be successful in another. You need to invest time and energy into really understanding what make each product category tick.

Next steps

Building and growing successful companies is all about taking controlled risks and making mistakes is a natural part of that. Going quickly means we will always get things from wrong from time to time – the trick is to recognise your failures quickly and to change course before the costs of any failure begin to rack up.

Read on for a first-hand experience of how new technology platforms can cause more damage than good.

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About Author

Hunter Ruthven

Hunter Ruthven is the editor of Real Business. He is also the editor of Business Advice, a title focused solely on a section of the business community currently underserved – micro companies. Alongside this, he is part of the team that hosts the Growing Business Awards, First Women Awards and Future 50 initiative.

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