Good Advice Can Sink Your Business
From major media outlets to your mother, it seems that there is no shortage on advice about how to survive the treacherous economy. Truth is, advice and ideas are needed now more than ever. Most business owners I speak with are very confused because we are in unprecedented times. But it is important to realize that there is no one-size-fits-all solution. Every business—and business owner—is different, so even if the advice is good, it might not be good for your particular situation. For example, many experts say that businesses should cut all expenses to the bone and reduce headcount as quickly as possible. Others say that this economic situation will lead to opportunities that we may never see again so this is a great time for owners to invest in their businesses. I think both of these options are “correct.” However, they may or may not work for your business. Listening to all of this advice will make your head spin. Hopefully, the advice below can help you distinguish the good advice you can use from the good advice you can’t.
One Size Does Not Fit All. How do you know what advice is right for your business? While there is no easy way to determine what is appropriate for your business, your projected cash flow and your cash reserves are among the top considerations in determining if you should cut back or push the envelope. Simply put, if you have cash constraints, cutting expenses makes sense. On the other hand, if you have plenty of cash to weather a bad 12-month stretch, this is a great time to be opportunistic with talent or technology, or even to think about buying a competitor.
Where the Best Advice Comes From. The best source of advice is from fellow business owners. While experts may know the “textbook” answer, they might not appreciate the crucial emotional elements involved with certain decisions. I have often stated that I am a big fan of peer groups, which are great forums. But even if you are not a member of one of these groups, just speaking with other owners will usually lead to good ideas that could work for your business. In addition, speaking with other business owners that are going through similar challenges is almost always cathartic at the very least.
What’s my advice? Based on speaking with dozens of owners over the past few months, I believe I have one piece of advice that works for just about anyone: Be realistic and positive.