Starting a small business can be a precarious venture, so entrepreneurs are often given to self-doubt. This usually leads small business owners to seek advice and fail to differentiate the good from the bad. As people are all too willing to offer their two cents, the following five pieces of bad advice should serve as red flags:
- “Hire people you know.”
The mantra, “It’s not what you know, but who you know,” contains a similar theme: Working with someone you know is a safer bet than employing a random name on a resume. This advice ignores the baggage that generally comes with hiring intimate connections (e.g., the unwillingness to terminate a toxic work relationship in order to preserve the personal relationship). Instead of trying to accommodate your friends, envision the skill-set of the position that needs to be filled and pursue that individual.
- “There’s no room for you in the market.”
This statement grossly overlooks the potential for you to carve out a niche market. No market is perfect and thus able to satisfy all consumers. Carefully analyze your target market and position yourself to meet their particular needs, which, consequently, will spell out who you are.
- “You have to be cheaper than the other guys.”
Going toe to toe with the established players in a market can be daunting. The clearest strategy would be to start a pricing war, undercutting the competition with outrageously low prices. This cannibalistic pricing strategy assumes that other firms can’t price below you—they can—and there’s no need to test that theory out for yourself. Instead, focus on the value you can provide for your customers and price accordingly.
- “Social media is free.”
Social media is not free. After accounting for the amount of human capital required to maintain a healthy media presence, the costs become very tangible. That said, utilizing social media shrewdly can reap dividends for your business, enabling you to take advantage of social media’s low startup costs.
- “You have to spend money to make money.”
This age-old adage is true to a degree. However, when entrepreneurs misinterpret it to the extent that they believe throwing enough money at a problem will magically solve it—decisions become costly. Instead, rely more on creative solutions and keeping costs to a bare minimum. To read the original article, click here: http://mashable.com/2013/09/05/business-bad-advice/