How To Lose A Business in 24 Hours

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Losing a business in less than 24 hours is easier than you may think. Just to clarify, I’m not talking about a business that is defined by simply printing up business cards with a company name and a fancy, impressive (albeit fake) title. I’m talking about a living, breathing, revenue-generating business with actual sales receipts at the end of every day.

 The second business I had (just like the first), was a fashion brand in the urban contemporary market. One year, in preparation of the holiday shipping season, I decided to double down on my advertising to increase my exposure in the market. I borrowed $100,000 in cash from my finance company (the company that was financing my orders) to pay some of the advertising money up front. The balance of the advertising dollars the magazines gave me a line of credit for… about another $200,000. So, altogether, I had scheduled four months of advertising at about 75,000 per month (300k in total) in anticipation of delivering the product to the stores.

 As it turned out, everything paid off. Or so I thought… I wrote a ton of business, opened up several hundred more locations than I expected and it looked like holiday was going to treat me very well.

Taking My Eye Off The Ball

 That season we were shipping a lot of denim. Back in those days we had to make jean jackets to match every pair of jeans because that’s how everyone wore denim back then. We had some factories in China, and some in Korea that were making all of our products for the season. The vice-president of my finance company was overseeing the production of our tops and bottoms as he had relationships with the factories for many years.

To make a long story short, the jean tops arrived first and they looked great. My partner and I had ordered about 15,000 pieces of the tops that we sold for 40$ to stores (who then retailed them for 80$) so this represented $600,000 in revenue for our company for the season on that category of denim.

When the ‘matching’ denim bottoms came in however, the leg opening on the bottom of the jeans (where you put your feet through) were so small not even a kid could fit their feet through them. Some way, some how, there was a major screw-up.

Vested Interest in Both Success & Failure

The problem was that the vice-president had approved the production, so there was no recourse with the factory as he has signed off on it.

Here’s the key point… the vice-president of our finance company worked for the finance company, not our company. While he wouldn’t make money on a screwed up order, he wouldn’t lose any money either. Truth was, he had caught the mistake but did not want to get in trouble with the finance company for picking a bad factory since he worked for them not us… so he tried to dump the problem on us. And he did.

Double Damage

So here we were with 15,000 jeans that we could not use. These jeans were also 40$ wholesale so they had also a value of $600,000 just like the tops… But we were not only out $600,000 because now that the jean bottoms were of no use, the jean tops had no value either. The result? A 1.2 million dollar hit. My margins at the end of the day were around 30% so I was expecting to make $360,000 out of that $1.2 Million. I was planning to use that money to pay the $200,000 balance to the magazines and I would still have money left over to pay my other expenses and still take a nice profit at the end of the season. But that is not how things went down…

What went down was that lawsuits came flying, and the vice president of the finance company did not come clean with the President about the mistake and the finance company dropped us like a hot potato… and I was out of business in a day.

The Moral Of The Story

Only give decision-making power to someone who has a vested interest in both your success and failure. If their interest is with some other company other than your own, then that is the side where they will be making their decision from, not yours.

Have A Great Day!

MJ

 

How Authentic Leadership Can Build a World-Class Business

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Learning what it takes to be a great leader is easier said than done. I believe that motivating your team and developing a mutual rewarding and beneficial culture within your organization is one of the key traits of great leadership.

During my career, I have been fortunate enough to have worked for not only myself but for very large corporations as well. In 2006 I grabbed the opportunity to run a division of JC Penney and, to take a line out of Floyd Mayweather, with hard work and dedication, I ended up running 5 divisions and increased overall revenue in excess of 500 Million Dollars per year.

I have created this video below to give you my personal philosophy of leadership and what I think are the key components to being a great leader.

After you watch this video and if you enjoyed it, I suggest you check out the post 5 Must-Have Ingredients To Be A Transformational Leader as well as The Key Ingredient Of Effective Leaders

Enjoy!

Have a great day!

Gary

 

8 Reasons Why You Need To Hire a Brand Specialist

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In this latest extended video module, I discuss the necessity of companies to hire outside a brand specialist to provide creative business insights that will help them grow. As a brand specialist for a good part of my career, I have noticed that internal employees have daily challenges that inhibit high performance from being achieved.  This module discusses in detail 8 such benefits. Enjoy!

The Startup Entrepreneur Guide To Starting A Business

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If you are a startup entrepreneur and were not aware (or are new to Hustle Branding), I wanted to let you know that Gary & I created 4 free video training modules to offer help for entrepreneurs that I think may be of significant help to get you started with your business.

The videos are  over an hour in total and we spent quite a bit of time preparing them so I figured I should bring this to your attention in case you haven’t seen them.

Again, this video series was created specifically with the startup entrepreneur in mind who may not be aware of what to do or  where to start. I think they are also very useful for existing business owners that may be running into some stumbling blocks or looking to raise more money.

When you go to the page, entitled, The Startup Entrepreneur’s Toolbox, you will see the intro video which I have put below. After watching the video , if you want to watch the 4 Free videos, simply enter your first name and email in the sign up box on the page and we will email you the link and you can start watching immediately. We feel these are 4 crucial steps every startup entrepreneur should find very useful.

The  four sections include:

1)  DIFFERENTIATION:  Research And Set Your Idea Apart From The Competition!

2)  BRANDING:  Build And Communicate A One-Of-A-Kind Story For Your Idea!

3)  BUSINESS PLANNING:  Develop A Roadmap For Your Idea To Reach Its Destination

4)  TIPS FOR RAISING CAPITAL:  The Pursuit Of The Deal

To enter the startup entrepreneur’s toolbox page to get your 4 free videos click here. Please feel free to take advantage of this opportunity and we hope you enjoy the video!

 

 

Have a great day and HUSTLE HARD!

 

MJ

 

The 3 Key Components To Designing A Brand Identity

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Today I am focusing on the 3 Components of Designing A Brand Identity, which is an extended video training module I have created to further our discussion on building brand equity. In the module, you will notice I have used many brand strategy examples that you should be very familiar with in hopes to give you a better understanding of what these companies are doing that set them apart from the competition. Enjoy!