Thursday, July 19, 2007

Telling friends from foes

I’ve just been talking with some young entrepreneurs in the third year of their business who say that when they started, they had no end of friends and other contacts warning them not to go into business. “You shouldn’t go into business with a friend,” they said. “You shouldn't work with such a new type of product. You shouldn't take a chance.”

They didn't listen, of course, so they're right in the middle of it: living the dream, dodging the cash-flow monster, falling slightly behind their projections as they slog through the swamplands of “doing just well enough to keep going, not well enough to relax.”

My question is: were those friends doing them a favour or a disservice by trying to warn them off?

I’ve met many entrepreneurs over the years who would have been much better off if someone close to them had taken them aside much earlier and said, “This business of yours is a crummy idea. Forget about it.”

Instead, many people think they're doing their friends a favour by saying, “this cheese dip is great. You should sell it through Safeway,” or, “You have such a flair for decorating. Why not do this as a business?” Most of these people have no idea what’s involved in starting a business – or how trivial the new product or service is compared to your need for business savvy, raising startup capital, marketing ability, perseverance, networking, using contacts and maintaining relationships, managing people, etc.

But then, it’s not their money.

Don't let either the eager beavers or the nay-sayers determine what you're going to do. By all means, listen to both sides. But make them work harder for the privilege of telling you what they think.

Ask them to back up their statements. Why do they think you should open up your own store: do they know anyone who has done that successfully? Why does Uncle Fred think you shouldn’t go into the landscaping business – does he have first-hand knowledge of how tough it is?

When you turn some of the “noise” around your business idea into information, you are bound to make better decisions.

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