Follow all the recommendations on offer for the would-be entrepreneur and you’ll
be bust before you’re even started.
“Get legal advice here, financial advice there, insure yourself against this, that
and the other, back-up everything, design and pay for disaster mitigation strategies,
get in creative consultants, website designers, marketing people, human resource
consultants.” The list of demands goes on … and on … and on.
Success in business is about making good decisions. The first decision is whether
to go into business for yourself. The second is what business to run. Then you have
to decide how to spend your money wisely.
Of course, that’s not to say you never need a lawyer or an accountant. Far from
it, used wisely these people can save you a fortune.
But, the savvy entrepreneur avails himself of as much knowledge as he can. Perhaps
75%, maybe even 95%, of the questions put to professional advisers could just as
easily have been answered by spending half an hour poking around on the internet.
And, accounts are easy to learn too – you probably new all the maths by the time
you were 12. What makes them seem so impenetrable is the archaic terminology and
So why do we get so much bad, even irresponsible advice?
It’s plain cowardice. Rather than be honest about what it takes most advisors pretend
anyone can run a business. Well, they can’t – just as I can’t play cricket or football.
Wish I could, but I can’t.
Anyway, who is actually running a business if everything that is done, and every
decision made, is farmed out at vast cost to somebody else? Are these advisers so
really out of touch that it isn’t blindingly obvious there’ll never be enough cash
to finance their fancy whims?
Scared of risking blame for giving duff advice they pass the buck. “Ask a professional”
they cry when the proper answer is “learn what you can for yourself, preserve resources,
spend wisely and take responsibility for your own decisions”.
Everyone from banks to government sponsored business support organisations are falling
over each other to tell us how to run a small business.
All these people imply they know how to do it better than its owners. Yet few are
prepared to run the risk of setting up a business themselves, or share the risk
in the businesses they advise. Frankly, most simply don’t have what it takes to
run a business of their own. Just because you’ve read a couple of books, or even
taken a course, doesn’t make you an expert.
A bureaucrat who has spent his whole working life climbing the hierarchy of a bank
or a government department will have no practical knowledge of what it takes to
run a business. His opinions and priorities will be irrelevant, even misleading.
Like learning to drive, there is no substitute for direct experience – it can’t
be learned from books alone.
Many organisations offering “business advice” realise this, and will claim their
advisers have great experience of the small business sector. What this usually means
is that they have great experience of advising the small business sector, on a comfortable
salary with benefits. It rarely means they have hands-on experience of the gut-wrenching
work of setting up a new company, keeping it going, and building it up against the
Some will claim that they do have experienced businessmen acting as advisers. Usually,
this means old Harry, the manager’s pal from the golf club. Harry most likely worked
his way up the ranks of an established business before taking early retirement.
He therefore knows less about being an entrepreneur than a teenager who has just
spent his first day running the first business he has ever set up.
And, an extra word of warning about bank small business advisors – whereas most
advice comes with a heavy dose of incompetence and unreality the banks actually
have an incentive to give advice that is in their best interests rather than yours.
They want to sell you services and banking products and you must apply a heavy discount
factor to anything they tell you.
All this should not make the entrepreneur too arrogant about getting advice. Good
counsel is a valuable commodity. The key is to find someone trustworthy, someone
without an agenda, someone who has been a real entrepreneur, and someone with something
to lose if the business gets it wrong.
© Agincourt Productions