A few weeks ago, I was tasked with writing a short article for a company I work with.
The topic of the article was to write about 'starting a side hustle while working a full-time job.'
It's something I got a lot of experience talking and writing about already.
Naturally, I scoured the internet to see what other people were talking about - after all, the style of writing was vastly different from my natural style of writing you see here in my articles.
As I searched through the deep, dark, corners of Google, I quickly saw how flawed our knowledge on entrepreneurship was.
I started to understand why so many people failed in business - and it's because they follow the wrong advice!
In this article, I'm going to talk about the 5 worst pieces of business advice entrepreneurs receive.
Please do not do any of these if you want to be successful in business - they simply don't work.
Research business names
Imagine you're starting a business alongside one of your friends.
You both want to start a marketing agency.
While your friend spends the first 1-2 weeks figuring out their business name, you've done what you really should be doing.
You've read my article on building an A-team to scale your marketing agency, and you've started to learn the basics of the business model.
After 1-2 weeks, you've got calls booked with potential employees and you've completely understood the concept of the marketing agency.
Your friend, on the other hand, comes back to you with 10 business names that they've got in mind.
"What do you think of X?"
These were two types of people in business; If I was to make a bet, I'd bet that your friend will not last a week when sh** hits the fan.
Yes, thinking of a good business name is crucial, it's part of your branding and your overall mission with the business.
However, as the first piece of advice - it's stupid and unnecessary.
Avoid spending time on things that won't move your business forward.
You need to spend all your time and energy on the things that will help your business make progress - not slow you down.
A lot of the time, entrepreneurs understand that spending a week or two picking a name is nothing more than a way to procrastinate and prolong the inevitable.
It's better to just do the things you need to do, not the ones that are holding you back.
Set up a legal company
This is a mistake I made early on with Condensr when I thought that I needed a company.
The idea of raising money led to one of the biggest mistakes a lot of people make and that's creating a legal entity for my business.
After closing Condensr, I still have the legal entity to deal with.
Whenever you're taking a business seriously, the biggest issue that a lot of people start thinking of is 'the government is going to come after me!'
To put it frankly, they don't care about us.
They don't care that we've set up a company and taking $100 payments every month or so.
They don't care that we've spent $1000 on a developer for a business that we're starting soon.
Governments and banks have much bigger problems to worry about than our $1000 per year revenue business.
Anyone who tells you that you need to have a business set up early on is setting you up for failure.
If you really want to be safe, become self-employed.
However, there's absolutely no need to register a legal company when you're just starting your business.
This should be the last of your worries - the most important thing is 'will your business survive?'
Will your business be growing and making a profit? Or is it just a ticking time bomb?
I still haven't closed down Condesnr (which is something I need to do) primarily because of how much of a headache it is.
Make it your priority to build a business, not please the government.
Once you start to realise that this business is making a lot of money and you think it's time for a real legal structure, you can hire accountants to help you with the legal structure of your business.
Work out your taxes
Another thing that's somewhat related to creating a legal entity is paying your taxes.
"TAXES, TAXES, TAXES!"
"I don't know how to do taxes!"
"What about the taxes!"
Paying your company's taxes is something not a lot of people have learned before.
It's only natural to believe this is a problem when you're building your business.
Taxes are very important in general - for businesses that are making a turnover.
However, if you're only just starting your business, you don't need to worry about when the taxman is going to come knocking.
Once again, your priority should be to build a successful business, not handle taxes.
At the beginning of your journey, taxes should not be something you need to worry about.
After all, you're not making a turnover and so there's essentially no taxable income.
However, once you start to produce revenues and profits, you only need to worry about finding a local accountant who specializes in business tax to help you out.
Thankfully, there are people who are trained to handle taxes for you, and so you don't need to worry about it as a business owner.
There are people who spend 4+ years in university learning all about accounting, I was going to be one of them until I made the decision not to be.
Taxes are not your job as a business owner.
If you spent your entire time learning how to handle taxes, you'll be sitting on a dying business.
If you visit a blog that tells you to work out your taxes before you even have a business, you should turn back immediately.
The article was most likely written by someone who's never worked for themselves a day in their lives.
Build a great product and customers will come
I've heard a lot of entrepreneurs preach this line right here, even very successful entrepreneurs who own billion-dollar companies.
Many people believe a great product is the only thing you need to be successful.
If this was the case, every computer nerd in the USA would be a billionaire because there are people who understand how to build great products, but don't understand how to do the rest - how to do business.
Business isn't as simple as building a great product and biting your nails, waiting for customers to flock through the door.
Business is about providing value to an audience that you go and find.
A great product could be a great marketing strategy once you've got the wheels turning because customers will be able to spread the word about your product.
Word of mouth is a great business marketing strategy, however, it doesn't work when no one knows about your business.
A great product doesn't magically send a signal to everyone in the world, telling them that you've released a great product they should check out.
There's no difference between a great product with bad marketing and a bad product with bad marketing - they're both terrible businesses.
You may have done the first 30% of the business well, building the solution to a problem, but now the other 70% is all about finding the people who need the solution.
They're not randomly going to come and find you themselves, it's not the 2000s.
When the internet was brand new, businesses can get away with bad online marketing, however, today there are millions more businesses than there were only a few years ago.
It's much harder to just get found today than it was a decade or two ago.
Building a product also means you need to build a marketing strategy.
It's normal to have a product that does its own marketing, but you need a way to get the wheels turning.
Maybe that's by simultaneously building a community around the product.
Or maybe that's by doing outreach to find your initial early adopters.
It could even be running Facebook Ad campaigns.
Whatever your marketing strategy is early on, it's crucial that you have a way to find customers - they're not going to come and find you.
Raise as much capital as possible
What is the real reason you want to start a business?
By real reason, I mean what is your selfish motivation to start a business? We all have one.
Is it to never work for anyone again?
Is it because you want to make millions?
Is it because you want to feel a sense of power and ownership that other people don't?
Or maybe it's because you want to have time to go on vacation 1/3 of the year?
Whatever your reasons are, raising money will take all of this away from you.
Watching Shark Tank might seem like it's all fun and games, especially when you're raising 100s of thousands or even millions, but what really happens after you raise money?
Well, you've pretty much bought yourself a new boss - you've found yourself stuck in the same trap you tried to escape from.
You are no longer free to dabble into the profits of the business, you now have priorities like impressing your shareholders and growing your company's valuation.
You're no longer able to take extended breaks or holidays because there are bosses you now need to impress and ensure they're happy with their investment.
Doesn't sound fun, right?
While raising a lot of money is important in a lot of cases, most of us will never really have to raise capital.
Raising capital is important when you're looking to build an industry-leading business.
You might need to do it if you're building a $100m+ per year company, anything below that, and you don't need to raise capital.
These are two email newsletter services that were started at around the same time.
Mailchimp recently got acquired for $1 Billion while ConstantContact has always remained just behind Mailchimp, in its shadows.
They're both around the same size, yet one of them raised capital while the other did not.
Mailchimp raised no money throughout its lifetime - it has remained a bootstrapped business since its inception, yet it's the biggest business in its category.
Let that sink in.
BONUS: Follow your passion
Common culture here is to give more than you'd expect, so here we are again with a bonus piece of terrible business advice.
I'm not too sure whether I should have included this one here or not.
I used to be completely against the advice that you should follow your passions - primarily because I'm someone who lacks real passion for anything.
Don't get me wrong - I have hobbies.
Writing, gaming, basketball... sleep.
However, I wouldn't go out of my way to call any of these things a passion.
However, more recently, we've been introduced to the world of NFTs and digital art, and here there's an entire realm of people monetizing their passion.
- Content creators
All of these people (and more) are able to follow their passions and make a lot of money.
However, for the rest of us, it might not be so easy.
If your passion is acting, it's not very easy to become an actor.
If your passion is basketball and you're shorter than the average NBA player, then your chances are essentially slim to none.
Long story short, it's difficult to monetize your passion.
Yes, you could create YouTube videos about basketball.
Yes, you could create acting videos on YouTube to build a portfolio.
But how many people really succeed with YouTube?
There is a bit of luck involved if we're being blunt. Not everyone gets to monetize their passions and that's why I don't like that piece of advice.
If you're not making any money from something you 'love doing,' you'll quickly start to dread it, and it no longer becomes a passion.
It's a terrible piece of advice because we don't live in a drama, we live in real life where we have bills to pay, we have mouths to feed, and a life to live.
Working for free out of 'passion' is unrealistic.
Don't take my word for it, however.
Go out and figure out whether your passion is monetizable.
Those were the 5 (6 with the bonus) worst pieces of business advice entrepreneurs receive.
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If so, please leave your thoughts in the comments below - let us know what other pieces of advice should be on this list!
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Till next time,