10 Worst Small Business Tips Entrepreneurs Ever Received
We all hear bad advice, both in our personal and professional lives. As a small business owner, it’s important to be careful about what advice you choose to listen to and what you choose to ignore. Following misguided tips or suggestions could lead to a costly mistake or put your entire business on the line. To help you avoid expensive or inconvenient missteps, 10 entrepreneurs shared the worst advice they’ve ever heard.
Business owners share their stories
Nobody is your friend.
“‘Nobody is your friend.’ This one’s thrown around like water on dry grass, and it’s simply not true. Yes, proceed with caution, but working with friends or making friends with other businesses can be a huge relief in the industry. When it comes to collaborations or even just having a pleasant work environment, it’s always better to have real connections than cold ones.”
Nate Masterson, founder and CMO, Maple Holistics
Use a professional employer organization from the start.
“I would have to say that the advice to use a professional employer organization for HR, payroll, benefits and workers’ comp was absolutely the worst advice for a small business. It was much more expensive than quoted; the invoices were created so the customer couldn’t figure it out — and it was done on purpose. We were never able to use their services, and the account team did not really review what was available. We finally fired them after nine terrible months.
These are for large organizations or organizations where the employees are higher paid. It is not for a business with hourly workers, especially not food or retail. They made some unilateral decisions without consulting us, and it hurt our business. Lesson learned — stay in control of your employees and just do what you can yourself, in house.”
Janice Jucker, co-owner, Three Brothers Bakery
Take out a loan for a fancy office.
“One of my friends was told by his business coach to use the loan they got to get a fancy office. He was advised that by establishing a plush office with expensive furniture and lavish decor, he can create an impression of a well-settled and successful business on his clients. It would also look great and provide them with a better working environment. This is the worst business advice that anyone could give. At the start of a business when you are hardly making any money, your focus should be on things that are really important, such as:
- Surveys to better understand customers
- Marketing to reach those customers
And that is where your money should go rather than spending it on unnecessary things. Concentrate on your business’s success first — the office can wait! My friend also made the wise decision by not following this advice. He eventually got a luxurious office when they started making more than enough money.”
Brett Helling, owner and CEO, Ridester,
Hire your way out of doing any work.
“I’ve frequently seen clients who, on the advice of a friend or business coach, have tried to hire their way out of doing any work. The idea presented is for the business owner to hire someone to take care of the details while they ‘work on the business.’ However, what we typically see happen is that the company collapses under the weight of over-expansion, and high overhead costs — without the owner generating revenue — result in poor cash flow or even bankruptcy.”
Courtney Barbee, co-owner and COO, The Bookkeeper
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You need money to make money.
“One of the worst pieces of business advice I’ve heard is you need money to make money. There is a misconception that a company is successful if it raises a huge round of venture capital funding. In my opinion, it’s much better to bootstrap a business through sweat equity. Through this strategy, your team learns to be resourceful and produce more with less. I’ve seen several entrepreneurs focus so much of their time and energy on fundraising that they forgot to build a product or service customers will enjoy and ultimately pay for.”
James Feldstein, owner and president, Audio Den
Lake Grove, N.Y.
Just do what you love, and the money will follow.
“I think almost every entrepreneur has probably come across this snippet of fortune-cookie wisdom: ‘Do what you love, and the money will follow.’ I happen to think this statement couldn’t be further from the truth. No one loves just one thing, and no one could possibly love every aspect of running a business. You also don’t need to be paid to do the things you love — you should be doing them regardless!
Rather than searching for the perfect career fit, I looked to my personal strengths, what I excel in and where I can make a difference. From there, I started a successful business that I do love, but that wasn’t the only factor in its founding.”
Tahnee Elliott, founder and CEO, T.C. Elli’s
Work all day, everyday.
“The worst advice I’ve personally received is that you need to be working 9 a.m. to 5 p.m. every single day during the week, then go work on your business after that, as well as work on both weekend days. When I was trying to do this, it lead to extreme burnout, fatigue and ineffective work, as well as a lot of anxiety and unhappiness in my life. I’ve found when you allow yourself the space and time to focus on the extremely important lever-moving tasks each day, you’re able to get it off the ground and avoid the burnout.”
Stacy Caprio, founder, Accelerated Growth Marketing
Do not invest in marketing and advertising.
“Being a chef and restaurant owner, I have come across many other chefs/owners that insist on not marketing or advertising their restaurant. I’d have to say that most of those owners are now out of business or holding onto a dying business. There are all forms of marketing, from the traditional press release to social media to radio to print and so on. Your competition will out-market you in a heartbeat now. And it’s happening all the time. Great service and food can and will become lost to a business out-marketing yours. Usually, the most popular brands or items are the ones that market the most. “
Marcus Guiliano, owner, Aroma Thyme Bistro
Just incorporate as an LLC.
“When we first started, we were legally advised that we needed to incorporate as an LLC — which is totally inaccurate. When we attempted to raise an angel round, they practically laughed at us because we were not a C-Corp. If you ever plan on taking your company public, make sure you form the correct corporation. This cost us our first round of funding because we had to change our status and was a $15,000 mistake that almost cost us our business.”
Gene Caballero, co-founder, GreenPal
Failure is not an option.
“‘Failure is not an option’ was my motto when I first started my business. I was adamant — I could not and would not fail. In my childhood, I’d experienced that not knowing how to make a business succeed could cause devastating failure. With a lineage of failed business ownership running through my blood, it’s clear why I’d demand such a decree. But I wish everyone who heard me say that would have punched me.
If I could go back in time, I’d turn that motto on its head: ‘I must fail 10 times before I know I’m on the track to success.’ Business cannot be its best until we know what its worst is. It cannot grow beyond our expectations if we hold on tightly to our safe, limited expectations. Failure hurts if we’re attached to it. Failure hurts if we keep reliving it. OK, plan A failed, so let’s move on to plan B with what we’ve learned.”
Fabi Preslar, founder and president, SPARK Publications
When starting your own business, you’ll likely want to turn to friends, family or fellow entrepreneurs for guidance. While they may be well-meaning and knowledgeable, their advice may not fit your needs or goals as a business owner. Be sure to trust your instincts when seeking advice from others. Doing so could stop you from making misguided decisions that could cost you valuable time and money.