Business Advice - 10% good stuff, 90% BS
We find business advice everywhere. Books, articles (like this one), talks, from friends and coleagues... the list goes on. But as we gather in this advice, we collect both good and bad advice. And to make things worse, the bad advice outnumbers the good by a large amount.
So why is the world so full of bad advice? Are people just that ill informed or delusional? Are they flat out lieing to make themselves look knowledgable?
What I have found is that the advice floating around, at least the advice that comes from people with real world experience, is NOT due to incopetence or lies. In fact, most of the advice that I deem bad is in fact not always bad. It all depends upon the situation.
We all see the world through our perspective and base our advice to others on our past experiences. We tell people they should do this or consier that when we have found such actions produced good results for us. We emphatically speak out about the things that produced great results for us and / or worked repeatedly. Most people who offer up advice want to share their good fortune and help others out.
So again, why is the world so full of bad advice? Why, if people are telling us what worked for them or others, does it turn out badly for us?
The answer lies in the fact that everyone's situation is different. What works for one person isn't necessarily going to work for another person.
So what can we do about it? We love to get good advice and don't want to take the bad advice. How do we filter out the good from the bad?
The easiest way to sift through all the advice you are given to find what will truly be a gold mine to you is to consider who the advice is coming from and what the background is behind why the source believes their advice is good. If you find a great deal of similarities between your situation and theirs, chances are that the advice is worth considering. However, if their situation is vastly different, the advice may be quite bad for you.
Notice I say "may". There really are no absolutes in life. Someone who is exactly like you discussing the exact same situation may be giving you bad advice. For example, what if their advice is based on something they did during the Dot-Com boom and now that investment money is tight and people are more discriminating about their spending the situation has completely changed. The reverse could also be true. Someone who is very different from you could be offering some money saving tips on buying online which could apply to anyone with an internet connection.
The key here is to look back at where the advice is coming from and, even more importantly, WHY people believe the advice to be good. If the foundation of the advice matches your situation then give it good consideration. Otherwise, treat it with some skepticism.
Example 1: Multi-level marketing
I have a number of friends and family that have tried out the multi-level marketing opportunities. Some with a little success, most with poor results. And there are a few people out there where it has completely changed their lives and made them rich beyond their dreams.
So who do you believe?
The key is to look at the success stories and trace back their path to success. Most of the time you see they got in on the product they sell very early. Either that or you see they are great at sales and work very hard (yep, that success didn't just fall in their lap).
Then look at the failures. Who feels they got burned and would tell you to never get involved? More importantly, how are those who didn't make it big different form the ones who saw great success.
Then look at yourself. Which of these two is most similar to you? That will give you an indication of whether you have a chance of finding success here as well.
Would I do it or even recommend it? Heck no because it isn't my thing and I would more closely resemble those who didn't make it. But that is just me. If I advised you to avoid this business would I be giving good or bad advice to you? You would have to decide that.
Example 2: Hire your software developer as an employee
About a year ago I went to a talk given by a very successful software engineer turned business owner. He had built up a business that used software to make money. I won't go into the details but suffice to say his staff was nothing but programmers, statisticians and business analysist. He didn't have any sales or marketing employees, just highly technical staff.
The audience was comprised mostly of entrepreneurs and business owners who were interested in successful business owners in the area. They wanted to learn about what made these other people successful so they could do the same. Most of the people in the audience were trying to start or run their business on a tight budget.
During the talk he looked out at everyone and told the whole group that they absolutely had to hire their software developers as employees. They should not outsource their software development ever.
Of course, being a software applicaiton developer who provides development services to my customers so they don't have to hire their own programmers, I was quite against this advice. It went against the core of what we do and how we work.
After setting aside my bias for a moment, I asked myself the tough question: Should I really consider his advice and be concerned that people would find this guy was right? Was he successfully challenging the basis of my business?
The answer was an emphatic NO.
I would venture a guess that 8 to 9 out of 10 people in the audience would find this speaker's advice very bad. A good software engineer typically costs $80k or more a year where this talk took place. Most of the audience wouldn't even be able to afford this kind of expense. And on top of it, most of them didn't need complex custom software development on a daily basis - this is what the speaker was stearing them toward.
If we look back at the speaker's background we would see that 1. he was a software engineer biased toward his profession, 2. his business was all about his custom software and he needed a fleet of developers working daily to keep the business going and 3. his first developer he hired for his business, to get it started, was himself which didn't cost him anything.
Following this advice would surely sink the majority of those in the room. They didn't have the budget nor the need for such an extreme expense.
However, if your business was defined on your software and you needed to have someone programming full time every day, his advice could save you money in the long run.
Example 3: Big business vs. small business advice
One of the difficulties I had when I started my business is that I was starting on a dime, funded by the very little money I had saved up over the years. When you start a business in this situation, as most entrepreneurs do, you have to watch the finances like a hawk and do only the absolute minimum to get things going so you can build up some cash flow.
There is a lot of advice out there on starting a business. Put together a detailed business plan. Get reliable and repeatable processes in place. Put together professional marketing material: letter head, logo, business cards, etc.
The problem is that when you start your business you really don't know where it is headed. You think you do but you don't. What you envision your business to be today is NOT want it is next month, next year, next decade. At least, not if you want to succeed.
Just look at any business that has been around for a while. They ones that thrive are constantly reinventing themselves. The ones that don't end up dieing on the vine.
When you are large you can affort the work required to make these changes to your marketing, your processes, your business plan, etc. In fact, when you are large, you need to very carefully think these things through and plan carefully because the vision has to be clearly communicated to everyone involved in the company.
But with a small busines, especially if it is only you, all this prep work is overhead that slows you down and costs you money. And it actually isn't very helpful. Instead of putting together an in depth business plan, you should be out trying to just sell your product and see what works. Once you have established what you can sell for a profit and you need to get a business loan or investment capitol, then get that business plan together.
The fact is that how you run a small business is vastly different than how you run a large business. And as your business grows, how you operate will change.
This is something I didn't understand when I started out. I spent too much time trying to take advice and lessons I learned in the big corporate world and apply it to my small busines.
There is no better teacher than that of making mistakes and experiencing failure. I had to learn fast. I didn't have the money to keep screwing up. Oh, if I only knew then what I know now. Of course now I can speak from true experience and have some credibility.
The main lesson here: when taking business advice, consider the size of your business vs. the size of the business the advice is coming from. And seek out advice from people who understand business at your size, not just the same or similar industry.
Hopefully you will find the advice here to be part of the 10% good that you take away to help you and your business. But keep in mind that if you are to take my advice (or even consider it) you must ask whether my advice is truely for you or now.
What you have read here is good advice for you and what should be discarded as not relevant to your situation? I will leave it to you to answer that question.