As a lifelong entrepreneur, I have heard advice -- both good and bad -- about how to manage my businesses. But the most important piece of counsel for an entrepreneur or small business owner is how to recognize when to ignore the advice you are being given. Here are the top five pieces of advice you should ignore:
1. "It is not worth the headache -- you should sell."
Things will get tough when you are a small business owner. You will be stressed, hate your job, and be at the end of your rope only to hear these words from others, sometimes even from friends and family. It's true that this is advice that stems from their general concern for your well being. The people who care about you simply want to see you happy and less stressed. Take their "advice" with a grain of salt, however, and re-evaluate the overall picture. At the end of the day, if you are still in love with your business, you will keep it alive through any means possible.
2. "Get a business plan."
Take a business class and this will likely be the first topic that comes up -- any business must start with a "plan," right? This tends to be a crucial part of what the company is and how its direction is defined over time. I, too, developed a plan for my first business and in the beginning, I updated it a couple of times. But soon, the plan itself took away time from managing my business and sat in the file cabinet, untouched. The document sat unedited for years as our business progressed.
I realized that I didn't need a piece of paper to tell me what the big picture for my small business was. What's important is understanding how you document your vision -- for some, it takes putting pen to paper and creating a hard-copy, living document to keep them on track. But it is not a necessary tool to keep your business alive or to start one. An idea is really the only thing you need to begin.
3. "Keep 100% ownership."
This is one of the biggest mistakes small businesses make, and I suppose this piece of advice stems from those who have seen business deals deteriorate between partners. One of the greatest concepts I learned in my Entrepreneurship class at the University of Michigan suggests the opposite: "Would you rather own 100% of a grape or 40% of a watermelon?" Never be afraid to ask for help -- if it's the right partnership for you, then it will actually take you to the next level.
4. "You need to set a rigid budget."
This is somewhat true. Of course, you should have a budget of some sort, but keep in mind that a budget should be tailored specifically to you and your business. Being a small business owner means managing your expenses: both planned and unexpected. When your business is running smoothly, it's easier to stick with a firmly established budget. As a new business owner, you're likely more worried about growth than whether you went over the repair budget by $200. Of course you'd repair your equipment if you're over budget -- you will do anything and pay any expense to keep your dream alive if you can, and sometimes, even if you can't.
5. "You need to market and grow."
Marketing and growth are often thought of as necessary parts of a successful business, and it makes sense--in order for companies to drive business and revenue, they need to market and grow their products. But both marketing and growth are determined by what you, as an owner, would like to do. In my experience, word of mouth, not paid marketing, slowly started to push business in my direction.
It's important to think about growth from multiple perspectives. Growth, when considered in the conventional sense, should be fairly flexible. For instance, being picky with new clientele can never be a bad thing, even if it means slower growth. One good customer is worth 100 bad ones. Do not be too eager to expand before you have some structure in place for handling the growth. Operating within your means will make your business that much more successful.
Overall, the most important piece of advice you should listen to is your own. Only you and your partners truly know the goals, means, and situations of your small business. After the equipment from my landscaping company was stolen, only my unfailing perseverance and a little luck helped me stick with it and continue building the firm into a successful local business, despite some "advice" to move on from it. Business setbacks can be financially and emotionally trying, but if you're truly passionate about making your business work, you'll be able to conquer those setbacks.
Paul Proctor is co-founder of Locqus, a free, online platform and mobile app that provides small businesses with a big company experience through streamlined, easy-to-use tracking and management services.