5 Rules for When to Listen to Advice (And When Not To)

Some people love to give advice. Here's how to determine if that advice is worth anything.

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Successful entrepreneurs know the value of listening to advice from others. But to utilize advice when growing your business you must learn to separate the wheat from the chaff, the good advice from the bad.

Advice is typically freely given. But the buyer must beware. You often get exactly what you pay for. So here are a few pointers on how to separate quality advice from that that should be politely received but quickly discarded.

1. Context

Always be mindful of the context on which advice is given. Great advice can come in a bar or in a board room. But great advice rarely comes at a bar at 2 a.m. after a night of tequila shooters.

In my younger years I had a working relationship with a CEO of what would one day become one of my first company's early competitors. During a conversation concerning marketing techniques he led me astray as to potentially profitable avenues of business. You see, being more seasoned than I was at the time he recognized that I was soliciting advice as to how to be his competitor. Knowing the context of the request he sold me a bridge. If only I had understood about context at that time I would not have bought it.

So strive to understand the bigger picture and the context in which the advice is being given as one determining factor for the weight that should be given to it.

2. Unsolicited Advice

Next, always be especially mindful of unsolicited advice. Personalities that are dying to tell you their opinion on everything are often the loudest and most readily available opinion providers. But their advice is typically watered down or off-base being primarily driven by an inherent need to hear themselves talk.

So if their motivation is to garner attention for themselves as apart from advancing your idea anything which emanates from their mouth must be taken with a grain of salt the size of Gibraltar.

3. Motivation

Speaking of motivation, always ask yourself what is this person's end game in giving me this advice? Are they trying to help me determine if my concept can work or do they have some latent and ulterior motive in mind? Often the most valuable advice you can receive is from a potential investor or venture capitalist as they want you to make money, and they want to as well. But asking a friend, someone who themselves has never had the courage to strike out themselves, is often fraught with peril. They will externalize their own fears of opening their own business through their "advice" such that any thoughts they may have on the business almost always focuses on the negative aspects of the hurdles as opposed to the positive challenges in opportunities.

4. Knowledge

We all know them, the know-it-alls. It doesn't matter if the subject is starting an online business or Manchurian basket weaving, they have knowledge on the subject and look out, here it comes. But is their knowledge reliable? Where did it come from?

Try this out the next time you are at a dinner party and you mention your next big idea only to have Mr. Brainiac start giving you advice. After politely listening (we are always polite) simply inquire as follows: "That's great stuff. Thank you. Did you read that somewhere or how did you come by this?" If they give you a legitimate answer fantastic. But if Mr. Smarty Pants gives you that blank expression of "busted," you know what do with that "advice."

5. Experience

Is the person from whom you received advice an experienced entrepreneur? Sure, they may be successful, but have they ever built a business? Often times we solicit advice from our trusted inner circle and do not weigh the fact that many of those individuals are career employees for someone else. That is not to say that their advice may not be valuable, but again it must be understood that these are people who have not done what you are doing. And there is a reason for that. We may not know what it is. But it exists. So always be mindful that just because someone is successful they may not be experienced as an entrepreneur.

Matthew Swyers is the founder of The Trademark Company, a Web-based law firm specializing in protecting the trademark rights of small to medium-size businesses. The company is ranked No. 138 on the 2011 Inc. 500. @TrademarkCo