Why I Walked Away From A Million Dollar Business
Hello all. I have been thinking about writing this post for some time, but finally got around to it. If you have been around here, then you know that I used to own and operate an online e-commerce store. It was built when I was in college and I ran it for about 3 years after I graduated. It was one of the best experiences of my life. I learned so much and made many mistakes. I feel that I am a better person because of my business and I wouldn’t take back anything. Let me give you a little background of my business.
Hmmm…I’m Going to Sell Electronics!
I have been a big fan of electronics for years. I am probably a little too infatuated with them, but oh well. You probably don’t even want to see my Amazon orders 🙂 . When I was in college, the only place I could get electronics was from Walmart. NO!!!! I am not a fan of that place for electronics. There is little selection and most quality is sub-par. If I needed good electronics, then I would have to drive about 2 hours to the nearest store. Not a fan!
As I was a business major in college and have always had a hankering for business, I decided that I would start up my own electronics store, but do it online. I wanted to learn more about e-commerce and running an online store. If I knew of the adventure I was about to partake on, then I might have thought about it just a little more to make sure I was ready.
I took about 2 months of researching and calling to find distributors and getting my appropriate licenses together. It is much harder to deal with in a small college town, but I got it done. Now, off to the races!
The Growth of My Business
The first year was a tough one to say the least. I designed the website from scratch and it looked terrible. I didn’t even know what I was doing. I was learning just by doing it. I wanted to make it work, so I was going to make it work. Looking back, my first website was embarrassing. Oh well.
After the first year, I moved my business to a shopping cart platform that allowed me to expand what I sold and how I sold. It was a big turning point for my business. The first year in business, I sold about $20,000 worth of merchandise. I was on top of the world. The second year I brought in about $100,000. My third year was close to $600,000. My final full year I sold over $1 million worth of product. That was my milestone. I had grown my business by myself with my own hands all without carrying any inventory. Yes, I was a drop shipping business, but I found the right distributors to do it. They even sold products to the big brands like Best Buy and some to Amazon. I was proud of it and just wanted to keep it going.
Long Hours, Stress, and Customers
Those of you that have run their own business know that it can be stressful. There is not doubt about it. The biggest issue with me is that I was trying to build my business only being part time and save on business expenses. I still worked full time and then went home and worked more on my business. I would wake up at 7am and go to bed at around 3am. I didn’t get much sleep, but I was driven by the thought of success.
When you run a business, especially in retail, you are going to come across a wide range of customers. Most were nice and courteous, but then there were the ones that made you want to pull your hair out. My main goal was to please my customers because they were the ones that ordered. I had to please them, but found out over time that you can’t please everyone. There were also some “customers” that just wanted to buy your customers data. You can read about that story and I hope it doesn’t shock you too much.
There were so many facets that I needed to take care of with the business that it was taking a toll on me because a business is not passive. I understand why some small business owners look like they haven’t slept in a couple of days. They probably haven’t! I did attempt on different occasions to outsource some work, but that always ended with me doing more work than before. Someone would always mess something up and it could either cost me money or cost me time. Outsourcing just wasn’t an option.
This all doesn’t even include the mistakes I made during the course of business. I sold a lot of products on Amazon. It was one of my biggest revenue drivers. Having said that, when you don’t sleep a lot and are working too much, you make mistakes. One such mistakes cost me around $10,000 worth of sales and it got me kicked off Amazon. I was able to get back on, but mistakes slowly got more and more as I had to take on more things. One man can only do so much.
The Hardest Decision
I was running on fumes for months. My hardest part of the year was coming up and that was the holiday shopping season. There is nothing that I can compare this time to. There were times that I didn’t sleep at all in order to deal with all of the orders and customer service. I was starting to get ready with my distributor to find out which products would be the hot sellers and get setup with some inventory. I had so much going on that I needed to get away from the computer for a bit.
I went downstairs at my house and spoke with my wife. She can always be honest with me and that is one of the many things that I love about her. We had a very stern conversation about how this business was affecting me. Here is how it broke down.
- Stress – Holding the reins with everything was causing a lot of stress on me. I was constantly thinking about my business, no matter if I was near my computer or not. I was always connected with my smartphone, so I just never took a break.
- Health – With the lack of sleep and running at a feverish pace, I was becoming unhealthy I was gaining weight and my blood pressure was rising. I’ve never felt that bad before.
- Relationship – This is a big one. My relationship with my wife was taking a turn for the worse. She stood beside me each and every day, but I was not giving her the attention she deserved. I was causing our relationship to get sour.
After talking with her for 2 hours, I made the very difficult decision to shut down my business. That’s right, I decided to shut down my online business. Why would I do that? There was one simple answer:
There are more important things than money
Yep, I was running a business that was making money, but that was not what it was all about. I wanted to be my own boss and control my own destiny. The problem is that I was affecting my personal life and my health. My destiny was becoming consumed by my business. It just wasn’t worth it to me to destroy my new marriage and fall on poor health just to make an online business work. There are many more things that are far more important in life than just money. I had started to become driven by money and the outcome was going to be bad. I didn’t want that to happen.
I worked on my site for one last week and then pulled the trigger on stopping the ability to order. I knew that I would still have to deal with customer service, but that would be a lot less since I wasn’t selling anymore. I finally closed down my business by November 2009 and it was the best decision I could have ever made. I wouldn’t change that decision for anything. I still feel that way today.
While the business taught me a lot of things, the biggest thing it taught me was to take care of my personal life first and then worry about making money and running a business. I am an entrepreneur at heart and probably always will be, but I won’t let my business ventures get in the way of living my life. My wife, my son, and my health are far more important than business success. They are my success.
So, there you have it. That is my business story and why I shut it down. As an important note, I did sell pieces of my business and got some profit from it and was able to enjoy some of my hobbies with it. I apologize for it being so long, but I could talk about this for days. Not that it matters at this point, but I would love to know you opinion on this.
I have since started a new business (including this blog) that helps other bloggers with their sites. It’s basically a blog management service with a large service offering. I learned so much from my first business and am seeing a lot of success with this one. I also learned to bootstrap the business and funnel the money back in. I haven’t used credit cards unless I had the money to pay it off. That fact alone has really changed the growth of my new business.
Would you shut down your profitable business to salvage your relationship and keep your health?
Wow, that is quite the experience. I’ve never found much success with any business venture I’ve tried on my own, but I have sure learned a lot from them. Usually took more work than I expected and sometimes success didn’t come even when offering the best product or services. Glad I tried them, but sure had to go through some heartache.
It’s so refreshing to read about people who have their priorities in check, especially when the world seems filled with status-driven, consumerist zombies. Great job focusing on the positive lessons learned from all of your hard work.
This is a great article and a perfect one for me to read before I start my own online business (I have about 3 in the works starting with my own blog by November 15th)
I write this comment with my wonderful wife of 4 years sitting next to me and knowing that she is the reason that I’m trying so hard to get as much success as possible with working online not just to make money but to spend as much time as possible with her. What an encouragement you are.
I wish you the best of luck with your business ventures Tyler. Just remember that online businesses can be one of the hardest to keep a handle of your time commitments. You can work on them at any time, so you find yourself working after dinner and through the night. Just remember to spend time with your wife and take some breaks. They are extremely important!
I run a small web design business and also actively blog. Used to run 40 web sites back in the day. Your problem (and mine) was we both failed in delegating. I am sure that a million worth of merchandise sold in an year business does allow one to hire 2-3 people at least: VAs, a good customer service person etc. If you did this, you’d probably still have the business and do great.
It’s my issue as well and I’ve taken some steps to make it work better for me as well. I am now delegting some of my stuff and it allows me to ‘breathe’ more and get more stuff done. Wished I did this 6 years ago, I’d probably have at least 4-5 high revenue web sites right now.
Oh, well… that’s life 😉
Happy to see you are doing well. I do agree that family ALWAYS comes first, it’s good you finally found your success and life balance.
That’s a tough story. We are always focused on building the business and moving forward, it seems. So much so that we don’t think about the time suck and what we are doing to our family. Then we come back to the thought in our head that we are doing this all for our family, and get sucked in again.
It takes courage to shut down a successful business. Way to stick to your guns. I will take this lesson with me, thanks.
Thanks for your comment Brian!
When people dream of ditching the man and running their own businesses they seldom anticipate the side effects of a successful business. It sounds like it was a part of your life that you appreciate having and has helped you to get to where you are today.
Congrats on your past and future successes!
I would agree with that. Too many want to jump into self-employment without knowing what it’s truly about.
Thanks for sharing Grayson. There’s definitely nothing passive about retail – online or bricks and mortar!
I’ve been running my own online retail biz for a number of years now and it can take up huge chunks of time and sometimes for very little financial reward. I’ve been very tempted in the last year or so to just clear my inventory and walk away but… Blogging for a year has taught me a lot and I’m about to apply that knowledge to a business relaunch that will (hopefully) include some semi-passive income streams as well.
For some of us, learning from our mistakes is far more valuable than learning from our successes. 🙂
Thanks again for sharing your story.
If you had help with your business early on would you still be working for your company?
I probably would have still left that business. While it would have been later than when I did, consumer electronics is a crazy business with low margins. I have thought about getting back into ecommerce again, but don’t know what to do.
I had same problem ..I was making lot of money with electronic business but that stress was killing be to the point I couldn’t handle ..feel tired all the time and get depress couldn’t focus any more I quit 2 years ago and was in dent almost 10 000 …
Did you consider quitting your main job instead?
I can totally understand why doing both a main job and your own online business on the side is unsustainable, but from what you wrote, if I had a choice of one or the other, I’d kill the main job – that is unless you enjoy your main job much more than the online business.
I am 27 and have an offer to go to a top 5 business school in the world, yet I feel more like using my savings to quit my job and build an online business so I can live from anywhere. Hence I am really curious why I preferred the corporate option to your own business.
Yes, I considered it quite a bit. Unfortunately, the growth of the site wasn’t going to fund much for me. While I was doing a million in sales, the profit margins were super small for electronics. It wasn’t so much about having two jobs, it was I no longer had passion for the business and it was killing me. Online retail sucks and leaving my main job for it wouldn’t have given me much. Looking back now, I made the right choice and I would do it again in the same situation.
Grayson – Thank you for your article. I’ve had an online retail business since 1999 and been in business since 1987. I’m in the process of slowly shutting down the business with a close date sometime early Spring 2017. Some people I’ve spoken with think I’m crazy for shutting down a successful business, but retail isn’t what it once was. I used to enjoy the customer service aspect – helping people find what they needed. But now I’m tired of the rude customers who seem to multiply daily. Good luck in your future endeavors.
Thank you for your comment Joady. I hear you completely on the retail landscape. I wouldn’t get into it again unless I used the powers of Amazon to fulfill my orders and handle customer service (aka Amazon FBA). People expect so much for so little and you can’t possibly keep up with it.
I completely understand your decision. Rude customers are emotionally draining. Best of luck to you in the closing process and whatever you choose to do afterward.
Grayson – As far as I am concerned, you definitely made the right decision, both to start the online business (try something you like when young) and to throw in the towel when wisdom calls for it (i.e, not so much because the going gets tough but to salvage what’s more important in life). The stress and health issues could have been fatal (as is the case for some). So happy that you got out of it! Thanks for sharing – a timeless, needful reminder for all to heed, especially in our millennium online craze…
Thanks for the comment JL!