The biggest mistake in business

1 Mar 2024 · 1 min

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In this concise business‑advice video, the speaker warns that the most common error entrepreneurs make is treating client acquisition as the primary goal. He argues that chasing as many customers as possible can erode profitability, especially when low‑price, high‑volume strategies lead to paying customers to take products. Instead, he recommends reducing friction in the sales process—such as offering payment plans—to attract higher‑value buyers, and stresses the importance of building a profitable business. He suggests aiming for a net profit margin of roughly 20‑30% after all expenses, and advises consulting an accountant to fine‑tune financial targets.

Chapters

There are ways to reduce friction in the sales process, okay? Because probably when somebody's buying a dress, do you offer payment plans and things like that for them? Yeah. Yeah. So, and for the ones who like want everything rock bottom prices, do you really want them as clients? Well, we want anyone as a client. The challenge is though, most people make the first sort of biggest mistake in business is that we think the goal in business is to go around collecting as many clients as we can possibly get. And actually that can be quite detrimental to a business because if actually you're not making any profit, eventually you're going to go out of business because effectively you're paying people to give your products to them, okay? So the goal isn't to go around collecting as many clients as you can possibly get. The goal is actually to create a profitable business. And the first number, without going into all the semantics like profit and loss accounts, the first number I want you to think about in your business— and your accountant can help you with this— is you want a net profit in your business of somewhere about 20 to 30% after you've been paid.