The Internet is riddled with so-called great advice for small businesses. Starting a new enterprise is daunting enough without having to be suffocated by misguided attempts at being helpful.
A terrific post by Tina White details 10 pieces of bad advice that new business owners need to ignore. Here are the clichés that are not only wrong, but can also hinder or harm your success:
1. Build it – they will come
No they won’t; this one even sounds unrealistic.
“Business owners are often told customers will magically appear if you rent a building, borrow money, and buy equipment.This isn’t true. No business automatically attracts customers just because they opened their doors.”
Thinking of just putting it out there and hoping for the best? Don’t even try that. Pure luck might get you there by 1%. The other 99% is on you. Research your target market, determine if your product/service meets their needs or wants, and then sell (market) it to them.
2. Follow your passion
This has got to be my favorite worst advice. Please ignore what it implies!
“Passion is not equal to profit. Passion alone will not create a successful business. Follow your business sense, not your passion, when making business decisions. Think instead of feel. Gather data, research competitors, and call your ideal customers.”
Of course, business owners have to be excited about their work. But many think this means that if all else fails, the business will survive on their passion. That’s nonsense; you have to be smart about this.
3. Keep your prices low when starting out
I wouldn’t even call this a tip, because it’s sort of self-destructive.
“This is a common rookie mistake. New business owners often set their prices too low assuming this will make them competitive and attract a lot of new customers. This not only starts a price war that you, as a new business, can’t sustain. You’ll never recover and you’ll always chase your tail.”
Price your goods based on their cost, value provided, and make room for profit. They have to be worth something!
4. Be everything to everyone
Right, here’s one I’m guilty of.
“New business owners have a tendency to get away from their core competencies in a bid to win new customers by trying to serve everyone they meet. You won’t win very many new customers doing this, and the ones that you do will quickly be disappointed when you are not able to follow through.”
You can’t do it all; don’t give into the temptation to try to please everyone; just look out for your best interests and focus on what you’re good at. This way, your quality and standards will never drop.
5. Do it yourself wherever possible
Ignore the above – it’s not true!
“There is a tendency to want to do it ourselves at the beginning… Part of your startup budget should include hiring experts who know how to do the jobs you need done. It’ll shave years off your learning curve…”
Especially with tasks related to finances and online marketing for example, it’s best to consult specialists who know what they are doing and who have years of professional experience to back that up. Hiring them actually saves you money in the long run – and allow you to focus on business growth.
6. Borrow money to get started
This advice is dangerous and should definitely be binned.
“If you can avoid it, don’t do it – you will dig a hole from day one that is difficult to get out of! The best way is to save money for your new venture. Don’t have enough money saved? Try to start smaller. Buy used furniture and office equipment off Craigslist. Work from home. Try to start your business without the liability of being in debt to a lender right off the bat. Keep overhead low.”
Starting off with heavy loans rarely ends well. Think very carefully about it.
7. Follow the lead of your competition
Now why would anyone want to do that – especially if the aim is to differentiate yourself?
“There is a tendency to want to emulate what others are doing around us…Focus on what you can do, how well you can do it, and what resources you have – not what you wish you had or what other people appear to have.”
What works for others will not necessarily work for your small business. Plus, we have no idea what’s going on behind the scenes in another company. Their apparent ‘success’ might be a façade to mask shortcomings.
8. Create a 50-page business plan
“…detailed business plans are not needed in every situation. It depends on whether you will apply for a grant, or a bank loan, or attract venture capital. Forget the lengthy plan and create a simple business plan. You cannot predict the future. Too much planning leaves you on the sidelines. Too little planning will leave you bankrupt. You must find a balance.”
Business planning expert, Tim Berry, will tell you that it’s not about the word/page count. Yes, a BP is one of the most important documents for your business, but its length won’t contribute to its effectiveness. Create one now, if you haven’t already.
9. Work around the clock
I really don’t see the point in killing yourself.
“There are so many entrepreneurs working 80-hour weeks with little to show for it. Working harder isn’t the answer. Working smarter is the answer. Entrepreneurship is a lifestyle, not an 8-to-5 job. Working non-stop on a regular basis will limit your success. You must stop and recharge.”
Sufficient rest and doing other activities will actually increase your creativity and productivity, and will ensure that you maintain your enthusiasm for work. Long hours hardly indicate if you’re even on the right track.
10. Don’t network during busy season (when activity is at its peak)
I hadn’t heard of this one until I read Tina’s post. But I don’t see how it’s practical anyway.
“Think about it – when do you think about taxes? During an accountant’s busy season. What about repairing an air conditioner? During the summer – the busy season of an HVAC specialist. Planting new shrubs and adding outdoor lighting? During a landscaper’s busy season.
The point is simple. If you are hiding behind your desk during your busy season, people cannot find you when they are thinking about the type of services you offer. When everyone is looking is precisely the time to highlight yourself and make yourself be known, and that means networking.”
Makes perfect sense to me.
Advice that has been tried by others (or that has a tendency to spread around) may only occasionally apply to your small business. Be very wary and critical of what you hear or what people directly tell you. Chances are, they don’t know what they’re talking about.
Here’s a good tip: Ignore the 10 pieces of advice that we’ve just listed, and save yourself from making mistakes that will be fatal in the months and years ahead.