In a recent interview with Business Insider, she highlighted two of the biggest gaffes she’s ever made — both of which occurred early on in her entrepreneurial career.
Frankel opened a pashmina and a cookie business before hitting it big with Skinnygirl. Both of those original companies failed, Frankel says, because first, she spread herself too thin, and second, she did not stick to a concrete business plan.
In the case of the pashmina business, Frankel explains that she became over-confident due to her initial flush of success. She began adding pajamas and ponchos to her lineup.
Then, the bottom dropped out. More and more people began to sell pashminas and the once rare and expensive scarves dropped dramatically in price.
She says that she lost US$50,000 from the venture. According to Frankel, sticking with a business plan would have allowed her to budget and spend more thoughtfully during that time.
“I think that in business people don’t realise how expensive things are going to be,” Frankel says. “It’s like going to a mall. You end up buying a lot of little cheap things and you come home and you don’t have much as anything, whereas if you said, ‘OK, I’m going to the mall and I have $50 to spend. I want to buy one good thing.’ It would be better than buying a lot of little crappy things. I think you have to just be aware of how you’re going to spend and what your plan is.”
However, Frankel warns aspiring entrepreneurs to not fall into the trap of allowing a business plan to completely paralyse progress.
“People sit in and want to perfect their business plan,” Frankel told Business Insider. “That’s just a piece of paper and some numbers. Really being able to get out there and execute is the thing.”
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