Entrepreneurs

Millionaire: This is one of the biggest mistakes business owners can make

Self-made millionaire Wayne "Butch" Gilliam pulled himself up by his bootstraps, and he thinks other entrepreneurs should do the same.

Chasing the "high life" too quickly by doing things like overspending on a company credit card is one of the biggest mistakes a business owner or manager can make, Gilliam said.

"I've seen a lot of people go broke and run good business straight into the ground because of their high-life living," Gilliam said. "All the s--- they bought, the wrenches, and their cars and their Cadillacs, I've seen several companies that paid for every bit of that."

Gilliam put a lot of sweat into his business ventures. After dropping out of middle school to pursue a career as a machinist, he worked to become a key player in the pipe industry. Among other smart business moves, he purchased the intellectual property rights for a unique pipe threading technology in 2004 for $200,000 — and then sold them for $100 million in 2006.

Frivolous spending on the company card is dishonest, Gilliam added.

Wayne Gilliam from "West Texas Investors Club" poses for a portrait during the 2015 Summer TCA Tour at The Beverly Hilton on August 12, 2015.
Christopher Polk | NBC
Wayne Gilliam from "West Texas Investors Club" poses for a portrait during the 2015 Summer TCA Tour at The Beverly Hilton on August 12, 2015.

"When you do that, you're cheating your employees, but I've seen it happen over and over and over," he said. "It's their blood, sweat and tears that makes a successful business, not just yours."

In fact, it's a mistake that makes Gilliam extremely angry.

"I would've allowed people to personally maybe cheat me out of money personally," he said. "But when it came to the business, I get red-hot on fire about it."

Good money management and patience are the keys to earning the high life, said Gilliam, who sits on the board of West Texas Ltd., the investment group he started with his friend and business partner Rooster McConaughey.

"I was a good steward with the money," he said. "If you wanna get into business, build a good business like we did, wait for the payday whenever that may be."

Watch "West Texas Investors Club" on CNBC Tuesday at 10 p.m. EDT.