Entrepreneur Series – Lesson 4 – Avoid Rookie Mistakes

I am not a professional athlete.  However, I would imagine that the rookie year on any of the professional sports circuits has to be daunting in nature.   Not only are you in front of some type of large crowd, it takes some time getting used  to all of the decisions you have to make to be the best of the best in what you do for a living.   Far too often, new entrepreneurs can make first year decisions which can put a major dent in the first year of your new entrepreneurial venture.  Even someone who has a lot of corporate experience cannot understand the firefight of being a business owner until you have to meet your first payroll.One great idea my business partner and I have put into place in our business is the 48 hour rule.   We’ve set criteria around what a ‘key’ decision is for our business and once we have made a decision on the direction we want to go we will revisit the decision in 48 hours to confirm that it is still in fact the right decision.   Here are few areas you should implement this rule in so you don’t have rookie blow ups your first year in business.

  1. Decisions over a certain dollar amount – Whether the amount is $1,000, $5,000, or $50,000, you really need to look closely at your pro forma (profit and loss statement), and consider what dollar amount if spent incorrectly could derail your business venture.    If you have any type of financial decision above your set dollar amount, take those 48 hours to challenge your thinking process on why you are making the business and financial decision you are about to make.   If it still makes rational sense, then you can pull the trigger.  99.9% of your big decisions can stomach the 48 hour time frame.
  2. Technology – Whether it is buying computers, cell phones, servers, or a phone system, you will have many different technology decisions to make in your first year in business.  Remember that the people you ask for advice will typically have different opinions based upon the products they sell or the framework of technology they prefer to use.   This is a great opportunity to gather both opinion and fact data to cross reference in order to make what you think to be the very best decision.  Since technology changes so fast, you don’t want to waste first year money with your initial technology decisions.
  3. Staffing – Make sure you have a set process on how you will interview to find the employees you hire in your business.   Many new entrepreneurs make the interviewing mistake of hiring new employees that they really like (and that are like them), rather than placing the best person strategically into the role.    It is best if you can have written criteria around your interview process and in some cases have an internal or external personal screen the candidates.  Most importantly, ASK and CHECK the references someone gives you even if you are in a rush to hire a new position.

This is part four of a ten part series on entrepreneurship.   Many owners get so excited about their new product or service that they end up making rookie mistakes many of us have made before.  By planning thoughtfully you won’t be able to avoid all of these, but just by not making a few of these your new business can be even more successful in the first year.

Entrepreneur Series – Lesson 1 – Being Undercapitalized , Lesson 2 – Incorrectly Pricing Your Product Or Service, Lesson 3 – Know Your Role As The Owner

Written by:
Ted Jenkin

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

Hey!

My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

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Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation. 

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5 Comments

  • Jason Pendergrass
    April 14, 2012

    Great article. I too am a rookie entrepreneur and through my various business ventures, Ihave learned so much. I can relate with the article in so many ways. As a matter of fact, I wrote a book titled: “Business Lessons of a Rookie Entrepreneur” describing my experiences. Please check the book out by searching the title: Business Lessons of a Rookie Entrepreneur on Youtube (also can search my name). It teaches the lessons I learned while starting and running my own businesses.