Not all the tips your friends, family, and peers offer you about running your budding enterprise are created equal. With this issue in mind, we asked The Experts: What’s the worst advice about running a business you’ve ever received?
This discussion relates to the latest Small Business Report and formed the basis of a discussion on The Experts blog in August 2014.
Wayne Rivers - The worst advice I ever heard about running a business is to buy into the myth of long hours and never-ending hard work. At a speech to a group of highway contractors, an earnest 40-something-year-old said, “One of the key ingredients is to work harder and longer than any of your employees. If they don’t see you working hard, they won’t work hard either, and they won’t respect you.” This is a powerful and pervasive myth. The idea that a 100-hour workweek is the only way to earn respect and be productive is simply ridiculous!
Are there other ways to gain respect without working yourself into an early grave? What do you think people really value—the time and effort you put in or the results you produce? Hours spent at work doing tasks that others could do as well, better, or cheaper than you crowds out family, health and fitness, relaxation and rejuvenation. It crowds out time you desperately need to plan, dream, meet, develop your employees, and deliberate on the future of your business so that you can get ahead of the firefighting curve and, finally, prosper.
The hard-work myth causes entrepreneurs to build traps for themselves. By working extreme hours and being the go-to person for every decision, leaders make their companies dependent on their personal production, and they consequently fail to cultivate superstar employees. The trap springs one day when the entrepreneur desires a little more freedom and time off only to find that his employees can’t, won’t or aren’t capable of making business decisions in his or her absence.
The true test of success is whether the entrepreneur can build a business that can survive his or her absence. That challenge requires that leaders focus less on themselves and more on developing talent in their organizations.
Wayne Rivers is the co-founder and president of the Family Business Institute and author of books about family and closely held businesses, including “The Top Nine Reasons Family Businesses Fail and The Eight Building Blocks for Creating a Sustainable Closely Held Company.”
Henry Elkus - Early on, I was told that more manpower equates to a better business.
Some still preach this advice, but most receive it the wrong way.
The gratuitous hiring of employees without necessity is a mistake I’ll never make again. I’ve seen this practice overcrowd, stagnate, and cause infighting in my own startups, as well as those of my colleagues.
Founders and chief executives love to hire their family and friends early on in their businesses, but most do it without the necessary foresight.
These new employees are personally tied to the founders but often have little or no expertise in the space, or lack the time to commit themselves if the business requires it. Firing them is a nightmare, but worse is what leaves with them when they go: equity. That measly 15% you promised a drinking buddy two years ago can quickly become six or seven figures and the reason your business can’t close an investment round.
Instead of following this faulty advice, learn to hire smart. Bring team members aboard that fill a role, are qualified and aren’t attached to you personally. Set their expectations appropriately and compensate them with what you can afford, now and in the future. Most important, keep the intellectual property of the business in your hands. Employees should be used to further the influence and reach of an idea you created.
Henry Elkus is chief operating officer and director of philanthropy at Unlimited Ltd. Clothing.
Sharon Hadary - Advice is bad advice only if you fail to think it through.
Over the years I have received advice from many sources—board members, other nonprofit leaders, business owners, sponsors, and interested friends. Certainly there were times the advice was unrealistic given existing constraints.
However, I gained interesting and valuable insights from the process of evaluating the suggestions. They opened my mind to possibilities; encouraged me to ask questions about the organization and how we did business; helped me to evaluate our impact and explore ways to increase it. Many times suggestions triggered other ideas—ways to achieve a similar outcome but in a different way.
I kept the suggestions in a notebook, often reviewing them even several years later. Sometimes something that we weren’t in a position to accomplish when the suggestion was made was feasible later.
I always made certain that the person(s) whose suggestion had influenced the change knew that their ideas played a role in making it happen. It was amazing how much goodwill that generated.
Sharon Hadary is the founding and former executive director of the Center for Women’s Business Research, an adjunct professor in the doctorate of management program at the University of Maryland University College and has co-written a new book, “How Women Lead: The 8 Essential Strategies Successful Women Know.”
James Schrager Just do it, make it happen, just get started running a business and you’ll be fine.
There are various versions of this, such as: Fire, Ready, Aim. If you need to be in your own business no matter what, then this might work.
But the odds seem much better if instead, you think carefully and develop a great idea, build your skills, and then, when the time is right, give it a try.
Of course, things won’t be exactly as you planned, and you will have to adjust as you go. But don’t confuse that with the concept of first getting into a business, and then figuring out a strategy for how to make it work.
James Schrager is a clinical professor of entrepreneurship and strategic management at the University of Chicago Booth School of Business.
Joanne Chang Before I started Flour Bakery, I sought help through a program in which you met with seasoned business executives who volunteered to look at business plans for potential new business owners.
It was a great program and I got a lot of good advice…except for one dud.
After studying my plan, the executive looked at the financials of my dream bakery and told me to take the money I was planning to invest in my own place, invest it in a solid mutual fund, and go find a more lucrative and less risky career path.
He meant well but what he didn’t realize was that nothing was going to stop me from “throwing my money away,” as he put it, to pursue my dream.
Once he figured that out, he just shook his head and said, “Honey, you better be sure you have a backup plan if it doesn’t work.”
Now that was great advice and I made sure I had one. I’m just glad I didn’t have to fall back on it.
Joanne Chang is the owner of and chef at Flour Bakery + Café and Myers + Chang in Boston.