Top 10 Rookie Mistakes for Entrepreneurs

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Many people who start businesses, including me, have little or no experience and just jump in. Over the years, I have compared notes with many fellow entrepreneurs, and I have seen them make the same mistakes over and over again — I recognize them because I have made them all, too. Here is my list of the biggest rookie mistakes:

1. Keeping your rent as low as possible. The key to business is to keep expenses low, right? Wrong. Sometimes it is worth paying more rent if it will generate more customers, if it gives a better image and inspires confidence, if it helps attract the right employees or if it makes it easier to deal with suppliers. In retail, this one mistake can determine success or failure.

2. Hiring someone you know and trust. Competence is more important. While hiring friends and relatives can work, it severely limits the pool from which you choose, leaving out people who could be much more qualified. Friends and relatives can also carry baggage. They can also be very hard to manage, which leads to my ultimate advice: if you can’t fire ‘em, don’t hire ‘em.

3. Buying used equipment to keep expenses down. This, too, works sometimes, but it is often shortsighted. For example, buying a used truck with 100,000 miles on it will guarantee that you will spend valuable time and money fixing the truck when it should be out taking care of customers. Can you really afford downtime with any machine?

via The Top 10 Rookie Mistakes for Entrepreneurs – NYTimes.com.

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