Any time you make the plunge to set up your own business, you’re going to be given advice – whether you ask for it or not. Everywhere you look, people who’ve never done anything remotely similar are going to be telling you what to do and where you’re going wrong.
It’s only now, a few years into running my own business, that I realise just how bad most of the advice I’ve received was. It’s got to the point where nowadays the only people I really listen to are those who’ve trod the same path, who’ve had the gumption to set out on their own.
Anyway, here are the five worst pieces of business advice I’ve ever been given.
Myth #1: Get some experience working for a company first
Working for a large corporation is so different to running a start-up you may as well go and play tiddlywinks for all the use it’ll be. I should know – I worked for a large investment bank for two years. All it gave me was IT support at the end of a phone, regular pay cheques and the illusion of being “in business”.
There’s one exception to this – if you can get a job in exactly the same industry in which you plan to open your business. For example, if you want to open a gym, consider getting a job as an assistant manager in a gym for a while. Before setting up the LSA, I worked for a similar company for about seven months and it was very helpful.
Myth #2: Do your own accounts – It’s not that hard
I have a finance degree from a top UK university and I still don’t do my own accounts. This is for two reasons. Firstly it’s an unnecessary stress. Business accounting isn’t all that complicated, but it takes up a lot of time and mental energy that I’d rather spend running my business.
A good accountant will also be able to help you beyond simple book-keeping. Our accountants advise us on a number of financial and operation issues; this makes us more efficient and ends up paying for itself.
Nowadays decent accountants are relatively inexpensive, so get your affairs in order, save time, stress and money. We use a firm in the UK called Approved Accounting who are very good
Myth #3: As a start-up, make sure you save every penny
Running a start-up isn’t about saving every penny. It’s about making every penny do the maximum work. Of course you shouldn’t be splashing money around: a fancy office, nice phones and a £500 logo are unnecessary.
But don’t be afraid to spend money in the right place. The key is to spend money in such a way as to save you time and increase your efficiency. We spend a big chunk of our revenue on two things: PR (which drives traffic to our site) and producing high quality sales literature (which directly translates to sales).
Spending money on good technology is also important: having a good printer, good software and a fast internet connection are all vital for keeping you at full capacity.
Myth #4: Do extensive market research
This isn’t always bad advice – many entrepreneurs I know swear by thoroughly researching a market – but in my experience it isn’t a good use of time. It’s very hard to get a feel for what will work until the market tells you.
Instead of obsessing over whether you think a market will like your product or service, get something out to your customers and see if they’re willing to pay money for it. Do this at as low a cost as possible and then iterate. Continually look at what the market is telling you and give it what it wants.
In our business, we started off intending only to sell face-to-face dating coaching. In response to a couple of e-mail requests, we wrote some articles about online dating, which quickly generated a huge demand for an online dating support service. We hadn’t anticipated this and it’s now our most popular product.
Myth #5: Try to find a gap in the market
To start a business, you don’t need to find a new idea or fill an untapped niche. You just need to deliver something very well to customers. The business we’re in isn’t new – it’s decades old – but we’ve looked at what our competitors have done and tried to do it better.
Don’t waste time scouting around for that great idea. Look at what you’re interested in, where you can add value and where there are loads of customers. Then it just comes down to two things: set up something good and make sure everyone knows about it.
[Guest article by Doug Haines, a director at The London School of Attraction Ltd]