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BUILDING A BOARD OF ADVISERS

Take Advice for What It's Worth
 

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It seems the minute you start a business, everyone gives you advice. Suddenly, your unemployed brother-in-law Sheldon, a failure at everything, is now a business expert. "You know what you should do," Sheldon says, cornering you at the family gathering, "sell everything half-price. That'll pack the customers in." Right, Sheldon: the customers will come but the profits will go.

Unsolicited advice doesn't stop when your business grows. In fact, it may only get worse. Ask the head of any Fortune 500 company, and they'll tell you they get a stream of suggestions from stockholders, market analysts, and people sitting next to them on airplanes.

Enter "Rhonda's Field Guide to Advice-Givers," a handy tool for helping determine what advice to listen to and what to ignore:

  • Experienced industry businesspeople. Listen to these folks! Novice entrepreneurs often believe they know better than those who've been around a long time. After all, the old-fogies have been too dumb to figure out changes in the market, technology, or some other aspect you're about to seize on, right? Well, yes and no. The realities of an industry don't go away overnight. So listen closely even if you don't follow their advice to the letter.
  • Potential investors. A few years ago, I was raising money for a business and went through a series of meetings with various venture capitalists. Each one immediately knew *the key* to making the business successful, each different, of course. With potential investors, listen carefully to glean whatever insights of value, nod while they speak, and when you leave the room, weigh their advice against your own knowledge. Just because these people are rich doesn't mean they know better than you.
  • Investors. Your investors are, in essence, your partners, so the advice-giving and advice-taking process has to become a two-way street. It's part of your job to help your investors know enough about your business so that when they give you suggestions, it can be informed and well-reasoned. Since you'll have to listen to your investors, remember one of Rhonda's Rules before you take someone's money, "Choose your investors carefully -- you're married to them."
  • Customers. You better be listening to your customers because they're the ones who determine whether you stay in business. It's tempting to dismiss the advice of customers because it often comes in the form of complaints. Instead, look for ways to gather as much insight and suggestions from customers in positive situations. Ask for their feedback, problems, insights. Customers can give you ideas for new or improved products or services.
  • Employees. Your employees can be a rich vein of insight and advice for your company. Seek it out, listen to it carefully, and use it when you can. Obviously, not every suggestion can be implemented; sometimes even good advice can't be put into practice for other reasons. The key is to create an environment where employees know their advice is welcome, valued, and given a careful hearing. Employees often know the ins and outs of some aspects of a business better than the owner.
  • Board and advisory committee members. In most cases, people serve on your board of directors or advisory committee because you've asked them to, so their advice should be given great respect. Board members (of corporations) have legal authority, so board decisions must be followed.
  • Friends and family. The worst kind of advice, I'm afraid, usually comes from those closest to you, especially those you live with. People close to you have their own motivations and their own fears when they give you advice. When your spouse suggests you'd be more productive if you didn't work in the living room, they may just want to get your stuff out of their way. Be gentle and be careful in how you respond. And you may find it's best to only ask for advice on certain, clearly-defined issues ("Should I wear this suit to the meeting?") rather than open-ended questions ("Do you think I'm doing the right thing?")
  • Business columnists. Clearly these people are experts. Listen to every single word they write.

Rhonda Abrams writes a widely read column on entrepreneurship and small business. Abrams is also the author of the well-regarded business plan guide The Successful Business Plan: Secrets & Strategies. She has started and built three companies, including her publishing company, Running 'R' Media, and her newest enterprise, RhondaWorks, which plans to offer a comprehensive online interactive business planning center. Visit Abrams at www.RhondaOnline.com.

Copyright © 2000 Rhonda Abrams

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Last updated: Dec 4, 2000




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