Posted on Apr 24, 2018

Top 3 Worst Pieces of Advice for New Small Business Owners

You have just started a new small business. Cue the onslaught of advice. Everyone is offering it up—and most of it is ignorant, ill-informed, made-up, or downright terrible. Don’t allow this chatter to distract you or, worse, misdirect your business.

Bad advice not only causes business owners to waste time. It causes them to waste money, and cash flow problems are the largest cause of small business failure. According to the Financial Times, one in six small businesses receives bad professional advice and loses an average of almost $30,000. About half of these instances of poor counsel came from information technology consultants; more than 30 percent came from management specialists. The next largest category of providers of poor information? Marketers.

Perhaps the most advice you receive will be from fellow business owners. They’ll tell you how to manage your time, how to save money, when to spend money, and what to avoid. Some of it will benefit you; most of it won’t. Here are the three worst pieces of advice you’ll hear when starting a small business— and what you should do instead.

1. It’s the Journey That Counts, Not the Destination

In May 2016, Grant Cardone wrote a post called, “The Journey or the Destination?,” which denounces the idea that success is a journey instead of a destination. The real estate entrepreneur points out that business owners have a substantial control over their own success. Moreover, they judge their success based on whether or not they’ve met specific goals.

NASA mission planners, for example, spent two years studying the surface of the moon before Buzz Aldrin, Neil Armstrong, and Michael Collins landed Apollo 11 on the moon. Cardone notes that the mission planners didn’t tell the American public that NASA’s success was in the journey. Rather, their success was defined by reaching a literal destination, the moon.

The takeaway? To be successful, new small business owners should make realistic goals and feverishly work to attain them. Your journey will be important, but it won’t be as important as achieving your goals.

2. Maintain a Positive Mindset, No Matter What

Entrepreneurs are well-known for their relentless optimism. They espouse positive ideologies, affirmations, and expectations. While this feel-good approach may help them to get through tough times, it does not help them effectively navigate challenges.

On the contrary, it keeps them in a state of denial as they overlook potential risk and neglect to learn from their mistakes. Even more disturbingly, many Pollyanna types hold themselves to unrealistic standards of happiness and they become self-flagellating for any internal negative thoughts they have.

Instead of forcing yourself to think positively, recognize that every emotion has its time. It is acceptable to be upset if something goes terribly wrong. That discomfort will stay with you and prevent you from making the same mistakes again.

As a business owner, your goal should not be to be upbeat and happy all the time. Rather, focus on achieving and maintaining a sense of balance that will see you through the highs and lows of running a business. To do this, make sure you set aside time to reflect and take care of yourself. You cannot be overworked and simultaneously stay balanced.

3. Grow Your Team, and Hire People You Know

If there were a startup playbook, its most overrated chapter would be called, “Building a Team of Excited New Hires.” Business owners are often so anxious to grow a team that they do not stop to question whether or not they should. Conversely, they may wait so long to hire employees that they are completely inundated with work they can’t accomplish on time.

Before you think about hiring an employee to work under you, consider whether it’d be more appropriate to bring a partner, someone whose attributes are complementary to yours.

According to world-class marketer Neil Patel, there are three points in time when you should not hire someone:

  1. You’re so busy and stressed that you’ve been desperate for help.
  2. You’re unsure of precisely which tasks you’d want your prospective employees to handle.
  3. You’re ready to hire the first applicant whose resume pops up in your Inbox.

Patel suggests that there are two essential times to hire employees:

  1. When it makes your business money.
  2. When it saves you money.

Since, he points out, new business rarely are in the position to save money, you really should only be hiring when employees can contribute to making and marketing a product.

If your business is at that stage, start by hiring a contract worker. It is significantly smoother to onboard a contractor. You control the length of the contract as well as the specific duties contracted. Contract workers are much easier to terminate than full-time employees, and they don’t require benefits. If you do find a great contract worker and, in time, your business requires a full-time employee, then you can transition them to in-house employment.

Avoid hiring a generalist. Rather, pick someone with highly specialized skills and experiences that match up with exactly what your business needs. Be specific in your job postings and during the interview process. You want to find the right candidate, not someone who can do a little bit of everything.

More often than not, businesses hire candidates because of referrals and personal connections. Don’t limit your candidate pool exclusively to people you know or to people who’ve been referred to you by people you know. Particularly with early stage businesses, new hires need to handle very specific tasks that will get the company off the ground. Therefore, as a business owner, you cannot afford to make a hiring choice based solely on who knows who. You have to find that great hire.

Remember, every business is different. It’s important to evaluate each piece of advice tossed your way as it relates to you and your business. And, when you hear these three pieces of advice, keep in mind what to do instead.

What’s some helpful or terrible advice you have received? Let us know in the comments.

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