Wednesday, May 7, 2014

Beware the Rise of Business Advisors

According to the news, we’re properly on our way out of the recession that’s held us in a vice-like grip for the past five years or so and we can all breathe a sigh of relief. That’s absolutely fine if you’re currently in work or have weathered your way through it as a business owner, you may actually feel as if the Sword of Damocles has started to move away, but for many it’s not even remotely good news. For example, the public sector are still looking at cutting back and many private companies are struggling to keep afloat.

Now, recessions are often times when small businesses boom because people leave their jobs, or are pushed, and sometimes with a nice hand-out. Seeing as they’ve left the constraints of their nine to five they are free to do what they like so they start that business they’ve always wanted to start. Good on yer! But then the mistakes happen.

I was in this very position just after the tech bubble burst and I found myself itching to do my own thing. So I left, set up a business with a friend and got to work doing whatever we thought was right to build a mega-corporation that would see us rich beyond our wildest dreams. Then we did something brilliant/stupid. We hired a business coach.

When you’re in the position of wanting to build a business then you find yourself listening to people who will give you lots of encouragement and ignoring those who tell you it’s a crazy idea. Our idea wasn’t crazy, but it also wasn’t going to make us super-rich very quickly. However, we got ourselves a business coach who told us we could be mega-rich and we believed him and also paid him handsomely for a fortnightly motivational talk in a pub. The thing was, he didn’t know our business at all; he had no clue what it was about. I told everyone that our advisor was great and he could turn their business around like would with ours.

When we nearly went bust, I suddenly came to my senses. It was a really hard time and we feared losing everything and then I realised that everything we’d been told was wrong. Not wrong for some people, but incredibly wrong for us and it nearly destroyed us. We sacked him and began to pick up the pieces. We’re now thriving by doing the opposite of everything he told us. Maybe we did learn something.

What went wrong

You see, when I analysed the advice, I realised that it was based on an incorrect premise. For example, very successful business people drive flash cars. Therefore, if you buy a flash car then by association you will aspire to become rich and somehow (and that’s the missing link, right there!) you’ll become rich. One particularly sage bit of advice was “pay yourself more”. Eh? Here’s a man with no sight of our accounts, no indication of our order book and no understanding of the market telling us that within six months we should have doubled our salary.

We should also take on staff in order to satisfy the work coming in. What work?

“Take a holiday”

“We’re going to Wales”

“NO! Get a weekend in New York!”

“I can’t afford it”


Every bit of advice seemed to step from the same false premise.

Then the recession hit and we decided that we needed to cut back on staff but the advice from our business guru? He said it would be a mistake, during times like this we need to invest. Invest what exactly??!!

Never, ever, ever give up…unless you have to

After we’d given him his marching orders, I looked around at other business advisers to see if ours was a common problem and it turned out it was. There were a lot of advisers out there from a big group and their website said that they only take on people who have a good business track record. They only allow people to join their franchise if they could prove their business prowess. What this actually boiled down to was that they were only willing to take on people who could pay the £45K franchise fee and monthly subscriptions. They took anyone on with a big enough cheque book.

I spoke to five other businesses who had been through a similar experience and the “advice” they got boiled down the following:

  • Act like successful people and you will become successful

  • Never, ever, ever give up

  • Failure is not an option

Similarly, their advisers never checked their books, weren’t involved in the marketplace and more strikingly, had become advisers after their own businesses had failed!!

Let’s take that old Churchill quote of “Never, ever, ever….give up”. OK, now I don’t want to come across as a gloom-monger here, but sometimes it’s OK to give up. For example, if you’ve spent twenty years trying to create a machine that turns water into cola and haven’t succeeded, it might be worth channelling your energies elsewhere. We’re told that the best business people never give up but that’s not true. Take Richard Branson, he’s given up loads of times. He’s not given up on the general premise of running business, but some of his ideas have failed miserably. According to the “never give up” mantra he should have continued with Virgin Cola, but he gave up, it was the best thing to do in the circumstances.

I personally know someone who has spent his life savings, relationships and personal hygiene trying to defy physics and make a perpetual motion machine. Give up, dude, GIVE UP!!!

Is all business advice bad, then?

Of course not. Before you think I’m being a bitter old fool and trashing an entire industry, bear in mind that this is my own personal experience and it’s about as valid as anyone else’s. Someone out there might be reading this thinking that their adviser is the best thing since sliced bread and they’d never have been successful without him and they might be true, but if it’s happened to me and a lot of other close friends then it could happen to others, so take this as a warning and here’s what I think you should do to make sure you don’t get caught up in the euphoria of having someone tell you how great you are when you obviously suck.

Realise people only write about the successes

There are tons of business books out there written by successful people. There are men in suits who run massive companies and now have the time to write about their ascension the the millionaire lifestyle so they’ll sit in their Barbados mansion and start thinking about how and why they made it big. If it turns out that every day they got up at 6am and did six circuits of the local park, they’ll put that in the book. At 9am they had a cappuccino but importantly, they didn’t have chocolate sprinkles. That’s the key. Their book is called “No Chocolate Sprinkles” and before you know it, Starbucks is creating a drink called “The Successoccino” which is the same as all the other drinks, but without the sprinkles!

Some other guy had the best idea ever in the history of the world but he didn’t succeed. He didn’t write a book.

Maybe your ideas suck

Lots of people have great ideas and become zillionnaires. Fine. Lots of people have great ideas and don’t. More people have stupid ideas, but they think they’re great ideas and they invest their houses in trying to market them. Come on, you’ve seen Dragon’s Den, it’s full of people like the latter group and they are convincedthey can be the next James Dyson with their cucumber condom or something. Sheesh.

Realise when your idea is a bad one and just get another idea. It’s not a failure to realise your shortcomings and move on. It’s a strength.

If you must get a business advisor, get a good one

Source: B2C_Business

Beware the Rise of Business Advisors

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