Seven famous founders share money mistakes, smart moves

Seven famous founders share money mistakes, smart moves
By Laura Petrecca

The crumbling of Wally Amos’ cookie empire taught him how to be a better man, and a better business leader.
The creator of Famous Amos Cookie Co. opened his first cookie shop in 1975. A decade later, the once-growing company faced severe financial trouble, forcing him to sell the company in pieces to outside investors.

USA TODAY reached out to successful business people to hear about their financial foibles, their best business decisions and their lessons learned.

Daymond John: FUBU

John’s apparel prowess began on the streets of Queens, N.Y. Shocked by the expensive prices of “tie-top” hats, he asked his mother to teach him how to sew so he could make his own hats and sell them. A banner sales day in 1992 — $800 in sales — further spurred his entrepreneurial drive.

He worked with a friend to create the FUBU logo (which stands for For Us, By Us) and began to produce sportswear from his home. FUBU is now an international clothing brand, and John is a celebrity judge on the TV show Shark Tank.

•Money mistake. John says he spent years “not understanding how little things financially make a big difference down the line.” Only about six years ago did he first begin to really grasp financial concepts. He made flubs such as not putting more company money in the bank to take advantage of compounding interest. And personally, he learned not to spend his money on “frivolous things,” such as high-end watches.

“I was always told, ‘Jewelry is an investment,’ but it’s not,” he says. He says he spent about a million dollars on watches that are worth only about $50,000 now.

His advice for new entrepreneurs: glean financial and business knowledge by taking classes or finding an internship in the field in which they want to work.

Savvy move. John realized early on that there are many legal issues that go with starting a business such as making sure patents and trademarks are in order.

“The first important thing to do is legally structure the company,” he says. Building a company “is like building a building. If you have a weak base, it will crumble.”

» Read the full article on USA Today 


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