Entrepreneur Series – Lesson 4 – Avoid Rookie Mistakes

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

Request a FREE consultation: www.oxygenfinancial.net

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

Entrepreneur Series – Lesson 3 – Know Your Role As The Owner

Entrepreneur Series – Lesson 3 – Know Your Role As The Owner

As an entrepreneur starting a new business, you often have to wear the hat of cook, dishwasher, accountant, and general manager.   However, one of the biggest mistakes a young owner will make is not quickly clarify their role within the organization.   Far too often, new entrepreneurs will try to control every aspect of a new business which inevitably slows the growth of the organization.  In some cases, it can make hiring and training new people so difficult it can be destructive to the success of a company.

[youtube https://www.youtube.com/watch?v=DeD1MbyWzrs]

One of things I recommend to new business owners is to draw a T chart with one axis being things you like to do and one access being tasks that you are good at.    What you should quickly try to figure out in the early stage of a new company is to list all of the items that you are good at and those tasks that you like to do.    After figuring out this critical piece of analysis, you should begin to try to surround yourself with others who you delegate the things you aren’t good at and you don’t like to do.

Here a few tips to consider when trying to figure out what your role is as the owner of a start up.

    1. Your PassionWith the thousands of successful business owners I have known and worked with over the years, the very best of entrepreneurs are the ones who define their role by their passion.  If you are excited about what you are doing every day, the people you hire that work for you will feel that energy through the organization until it becomes infectious.
    2. Your Skills- You have had both formal schooling as well as informal training through odd jobs over your life.   Think about the courses in school that you excelled at the most and why you did very well in those classes.  Think about the jobs where you wanted to work overtime because you loved what you were doing and you were successful in the tasks that were given to you.  It is important that you maximize your strengths.
    3. Your Vision- Your role within your new entrepreneurial venture should always be focused around the bulls eye of your company.  If you had a target to shoot at with a bulls eye in the middle, what words or goals would be written on that bulls eye?  It is important that your energy gets focused on the things that drive the vision of where you want to be in 1, 3, or 5 years.

This is part three of a ten part series on entrepreneurship.   Many owners try to be a jack of all trades and sink the ship on their new company by not focusing on what matters most.  Know your role!

Entrepreneur SeriesLesson 1 – Being Undercapitalized , Lesson 2 – Incorrectly Pricing Your Product Or Service

Written by:
Ted Jenkin

Request a FREE consultation: www.oxygenfinancial.net

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

Entrepreneur Series | Lesson 2: Incorrectly Pricing Your Product Or Service

Entrepreneur Series | Lesson 2: Incorrectly Pricing Your Product Or Service

In the first year of a start up operation, there is a great focus of energy from the new business owner on client acquisition. Gaining new customers opens the floodgates for the generations of revenue to pay the bills of the business. However, one of the tough lessons learned by young owners is not thinking clearly though pricing out the services of your business correctly.

[youtube https://www.youtube.com/watch?v=5kbXG1bRiLU]

Most new business owners tend to undervalue what they charge for their work and services in order to compensate for not being as established as their competitors. As long as you have a top notch customer service experience and offer a product or service that’s similar or better than a competitor, you shouldn’t devalue yourself. If you set this pattern up early with clients, it can be very difficult down the road to raise your prices with your initial customers.

Here a few tips to determining if the price is right on your new product or service you take to market.

  1. Shop The Competition–  As part of a new entrepreneurial venture, you should be doing some research about what kind of competition you have locally or on the Internet. Take stock of where your competitors have set the market rate, and place your prices relative to the value you believe you can deliver on in the market place.
  2. Beta Test Your Top 5- If you have 5 people you know who you are pretty sure will buy your product or service, consider throwing a red herring at them around your pricing structure. Gaining some valuable feedback from these customers could prove to be instrumental in bringing more like kind customers down the road.
  3. Offer Options– Having several options such as being able to pay annually or monthly, credit card or PayPal, or just a slight variation of choices of the same service will allow more new customers to determine the price that is right for them. Be careful about just picking one price point at the initial phase of the business.

This is part two of a ten part series on entrepreneurship. Many businesses fail in the first year because they incorrectly price their product or service. Make sure you focus on getting the price right!

Written by:
Ted Jenkin

Request a FREE consultation: www.oxygenfinancial.net

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

Entrepreneur Series Lesson 1: Being Undercapitalized

Entrepreneur Series Lesson 1: Being Undercapitalized

It’s always exciting to think about the idea of having your own new start up. You hear about stories where entrepreneurs started with just $300 and a cardboard box and then turned their business into millions. In reality, having worked with many types of business owners, the first mistake made by most is simply not having enough capital or access to capital while growing your business.

[youtube https://www.youtube.com/watch?v=DAbRnMfpKYA]

Undercapitalization really involves the language used when a person cannot sufficiently fund their business venture. An idea alone will not lead to business success. This lack of capitalization not only includes the initial outlay to get the business up and going, but really miscalculating the operating expenses in the business—especially in the first year of operation.

Here are three smart things to be thinking about so your new entrepreneurial venture doesn’t fall short financially.

  1. Lines Of Credit. Whether it is a true banking relationship or you have set up an arrangement with family and friends, do you have a written documented line of credit that you can access should the business need capital? Or do you have credit cards available with lines of credit ready to go if you have no other access to capital? You could also try places like www.lendingclub.com or www.prosper.com if you can’t gain access from normal channels for credit.
  2. Up Your Pro Forma By 50%. Whatever you run for your first year of expenses, add 50% to the total number. There will be plenty of unforeseen expenses as the new venture kicks off in its first year. It makes a lot of sense to measure twice and cut once rather than run into a buzz saw in the middle of your first year of business.
  3. 3) Lease vs. Buy. Many banks will work out a 3 year or 5 year $1 buyout program on equipment which may allow you to use your upfront capital more effectively in the first year of business. If you can stretch a line of credit or make an equipment lease it may be a good idea versus using your cash capital.This is part one of a ten part series on entrepreneurship. Many businesses fail in the first year because they run out of money. Make sure you don’t fall in the trap of being undercapitalized!

Written by:
Ted Jenkin

Request a FREE consultation: www.oxygenfinancial.net

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS.

Entrepreneur Series Lesson 10 – Passion, Persistence, and Perseverance

Entrepreneur Series by Ted Jenkin - Building A Successful Business

Lessons one through nine of my entrepreneur series were lessons extracted from my own business and other business owners across the country over the past twenty years.   Undoubtedly in your first year of business, you will make your fair share of mistakes like anyone starting a new venture.   There are so many valuable pieces of wisdom to learn as an entrepreneur, but here are my big three traits you must have to truly succeed in your business.

  • Passion – Many business ventures people conjure up in their heads often revolve around the dreams of making a lot of money.  While building your wealth can be an outcome of a successful entrepreneurial pursuit, passion around your dreams is what will get you through the good times and the bad times.   When you get out of bed every day with emotions that are so compelling around what you are doing, it becomes easy to motivate others to get excited around that dream.    Imagine if your business made you no money at all.   Would you still have the passion to get up every day and do what you do?

 

  • Persistence – You ask ten people to invest money in your new business and they all say no.   You go on a week’s worth of sales and marketing calls and everyone doesn’t want to buy your product or service.   You have two employees quit in the same week and now have to answer the phones yourself.    These are all just examples of things that will make you feel like you got kicked in the stomach.   Your ambition, drive, and persistence to stay focused on the key tasks you need to do as the CEO of your business when adversity hits you will keep you on track to reach your goals.

 

  • PerseveranceThe legend goes that Colonel Sanders was reduced to living off of just $105 of his Social Security check as he began his venture on making the best fried chicken the world.   He supposedly made over 1000 calls to different restaurants and bars having people try his fried chicken until he perfected the recipe. Just remember that as a new entrepreneur (especially if you have a college degree) most people will tell you that you are crazy, stupid, and out of your mind.     No matter what anyone tells you, if you persevere through all the criticism you will find that pot of gold at the end of the rainbow.

This is the final installment of my entrepreneur series.    I think our future lies in the dreams of those of you that start your careers as entrepreneurs and take the road less traveled.  Enjoy the journey and dream big!

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder oXYGen Financial, Inc

Have Financial and Business Questions? – Get Your Answers Here with a FREE Consultation

oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice and Smart Money Moves to the X and Y Generation.

Phone 1.800.355.9318 or 770.777.0427

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS. NFPAS does not provide tax or legal advice.   This site is published for residents of the United States only. Registered Representatives and Investment Advisor Representatives of NFP Advisor Services, LLC (NFPAS) may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact NFPAS Compliance Department at 512-697-6000.   PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. NFP Advisor Services, LLC makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is NFP Advisor Services, LLC liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

entrepreneur-series
Entrepreneur Series Lesson 10 – Passion, Persistence, and Perseverance

Entrepreneur Series – Lesson 2 – Incorrectly Pricing Your Product Or Service

Pricing Your Product Or Service

In the first year of a start up operation, there is a great focus of energy from the new business owner on client acquisition.   Gaining new customers opens the floodgates for the generation of revenue to pay the bills of the business.   However, one of the tough lessons learned by young owners is not thinking clearly though pricing out the services of your business correctly.

Most new business owners tend to undervalue what they charge for their work and services in order to compensate for not being as established as their competitors. As long as you have a top notch customer service experience and offer a product or service that’s similar or better than a competitor, you shouldn’t devalue yourself.   If you set this pattern up early with clients, it can be very difficult down the road to raise your prices with your initial customers.

Here a few tips to determining if the price is right on your new product or service you take to market.

  1. Shop The Competition As part of a new entrepreneurial venture, you should be doing some research about what kind of competition you have locally or on the internet.   Take stock of where your competitors have set the market rate, and place your prices relative to the value you believe you can deliver on in the market place.
  2.  

  3. Beta Test Your Top 5- If you have 5 people you know who you are pretty sure will buy your product or service, consider throwing a red herring at them around your pricing structure.  Gaining some valuable feedback from these customers could prove to be instrumental in bringing more like kind customers down the road.
  4.  

  5. Offer Options Having several options such as being able to pay annually or monthly, credit card or PayPal, or slight variation of choices off of the same service will allow more new customers to determine the price that is right for them.   Be careful about just picking one price point at the initial phase of the business.

This is part two of a ten part series on entrepreneurship.   Many businesses fail in the first year because they incorrectly price their product or service.   Make sure you focus on getting the price right!

Related Articles – Lesson 1 – Being Under Capitalized

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder oXYGen Financial, Inc

Have Financial and Business Questions? – Get Your Answers Here with a FREE Consultation

oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice and Smart Money Moves to the X and Y Generation.

Phone 1.800.355.9318 or 770.777.0427

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS. NFPAS does not provide tax or legal advice.   This site is published for residents of the United States only. Registered Representatives and Investment Advisor Representatives of NFP Advisor Services, LLC (NFPAS) may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact NFPAS Compliance Department at 512-697-6000.   PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. NFP Advisor Services, LLC makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is NFP Advisor Services, LLC liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

entrepreneur-series
Entrepreneur Series – Lesson 2 – Incorrectly Pricing Your Product Or Service