By Vincent Dajani
Running a business is a little like being a parent — you want to make sure you get it right, and there is no shortage of acquaintances or even strangers eager to dispense well-meaning advice on how to do that. While taking advice from those who have been there and done that is important, learning to pick out the good advice from the bad can make or break your business. We asked some business owners and executives to share the best and worst advice ever given to them, with a few lessons from current and future CEOs.
Great guidance, great results
Successful business owners often know good advice when they hear it, because it synergizes well with their core beliefs about how they should run the company.
“The best advice I ever received was to be a good partner, and don’t be a ‘me too’ — be a ‘me only’ business,” says Kevin Luskin, founder of The Sofa Store and The Big Screen Store. “That’s what I think makes us unique. We run our business with very few and very trusted vendor partners … and employees. Everyone is treated like family and that radiates through to the clients we serve. Never disappoint.”
Sometimes, the best advice can sound cliché. But, it’s repeated for a reason, Luskin says. “It sounds corny, but it’s not: If you can’t serve people the way you expect to be served, then you should not be doing it.”
Luskin believes that being a good business owner comes from how you conduct yourself, and always looking for the best in people. “We have a very synergistic relationship with the people that supply us in all aspects,” he says. “The Sofa Store is unusual [in that] it runs with three suppliers only. But we have trusted partners, which carries over to our customers.”
Geoff Gross, president and CEO of Medical Guardian, also believes that keeping it simple is the solution for success. “At a young age, my father … told me to stick to simple ideas. Whether it’s rolling out new products or something for the service center, particularly with the end user, we try to keep it simple. When we have customers that are on the younger side, it’s that much more important. It’s something every user wants when they’re buying product.”
Advice as easy as keeping it simple can have a huge impact on your business. However, good advice may not always seem like good advice at first.
For Jim Norris, founder and CEO of Montgomery County Employees Federal Credit Union, what became the best advice he’d ever been given started out as a somewhat counterintuitive idea. “Back in my early career, whoever had the most information on a proposal usually got that proposal passed,” he says. “[And] you tend to want to gather as much information as you can. Well, I attended a conference, and it was on the topic of decision making. What came out of it was the best advice that I’ve gotten: … to collect only 70 percent of the information when making a decision. If you go past that, more information doesn’t improve the decision at all.”
At first, it would seem like more data leads to a better decision, and that was what Norris and his associates had thought until he attended this conference. “Now, I look at folks in analysis paralysis,” he says. “Data on top of data on top of data. It really doesn’t help with making a decision.”
“Every time I approach a decision, I keep that in mind,” Norris says. “I want to gather enough information to make the best decision, but I don’t want to pile it on. Once you have that percentage, you roll with it.”
But even good advice can sometimes lead to problems. “Of course, during my career, I’ve had decisions that haven’t gone the way that I wanted, but even if you gather enough information, you’re still going to have those times,” Norris says. “After every decision that’s made, you kind of go back and rectify whatever went wrong.”
Close calls from bad advice
If bad things can happen with good advice, imagine the devastation if business owners were to follow the worst advice they’ve ever been given.
“One of the worst pieces of advice that I got was probably to either sell the company and go down that path, or … go down the mythical IPO route,” says Gregg Garnick, president and CEO of Zzip. “When you make that decision, it’s fraught with all kinds of issues and things that you can’t really anticipate.”
One nearly fatal (but unfortunately common) piece of business advice was given to Geoff Gross, president and CEO of Medical Guardian: Opportunity will knock. “It doesn’t really knock, you have to knock on the door of opportunity,” he says. “At the beginning, … we had a lot of our customers who wanted brochures. I thought if I sent them brochures that they’d come back and buy from us. But then I realized that they won’t just come to you. If you want sales, you have to go out and chase [them].”
One nearly fatal (but unfortunately common) piece of business advice was given to Ajay Kori, co-founder of UrbanStems.. “One of the things that we’ve heard over and over again from some investors is to really manage inventory and watch out for the bottom line. Put your efforts into making sure that at scale you have your spoilage under control. Make sure you have the least amount of waste possible,” he says.
“As we started out, we were under this impression of trying to keep waste as low as possible, so let’s try to keep it at under and we’ll sell out,” says Kori. “What we found was that we ended up selling out a lot and it felt great, but at the end of the day, it’s not high fives all around. It’s a much worse situation. Customers were coming to us and not being able to buy anything. Not only are you wasting effort by having these people come and not buy anything, that’s also very detrimental to the customer experience. They want something and we weren’t able to fulfill it.”
Thanks to Kori’s quick thinking, he was able to turn the business around by taking a little risk, but ensuring that there were enough supplies to fulfill customers’ needs. “Yes we’re spending more money, but at the end of the day, we’re delivering on that experience and making the world a happier place,” he says.
One of the most important things to remember is to always do your own thinking when given a piece of advice, whether you think it’s good or bad, says Christine Heiby, president of Auto-Grip Tools.
In fact, Heiby might never have even started her business had she listened to the bad advice given to her. “People told me that I wouldn’t be good running my own company,” she says. “I’m not a risk taker, and to go out and start your own company was kind of scary.”
Fortunately, Heiby decided to follow her own advice. “I’ve learned that you have to listen to yourself as opposed to what other people are telling you to do. You can take that info under advisement, but you have to listen to your gut.”
Following bad business advice can have detrimental effects on your business. But some of the best business lessons actually come from bad advice. Here are some of those lessons:
- Collaboration is key. “Collaboration to me is the better way to do it,” says Mary Ann Hewitt, executive director of the Maryland Council on Economic Education. “Don’t ‘pull the boss card’ unless you have to. You should all work together instead of pulling people along.”
- Seize opportunity. “The consumer demand pushes your business in a direction,” says Rick Del Sontro, CEO of Zippy Shell. “The market will tell you things, and you need to listen to your customers. You have to fill the need and you can’t wait. Will someone else fill that need, or will customers not come back?”
- Talk about your business. “We’re a small business; our budget isn’t that big. We utilize it to the best capability. Social media — you can find ways to do it more cost efficiently. We did a lot of campaigning. Anything we could do online to brand ourselves. Blogging. Just trying to keep ourselves optimized by search engines. Anything that we could do to talk about our business,” says Kevin Gatto, owner of Verde Salon.
- Failure happens. “There’s always going to be issues, and that holds a lot of people back,” says Jim Norris, founder and CEO of Montgomery County Employees Federal Credit Union. “You’re not a failure. That one decision does not make you a failure. All too often people are afraid to make those very large decisions because of the fear of failure. Procrastination in the name of reducing risk actually increases risk.”
- Find your niche market. “And then stay with it,” says Chandler Fox, co-founder and president of Foxcraft Design Group. “The best thing you can do is to get repeat business. A high percentage of our projects are referrals or repeat customers.”
- Decide if it’s the right time to sell. “It depends on the stage of their business, but with many companies, the CEOs give up the shareholder value,” says Gregg Garnick, president and CEO of Zzip. “Don’t give up the ability to sell the business outright. To do that, you either have to increase your sales price, or make a realistic assessment with yourself in the market and just how much you can grow. The route of selling might be a better exit for all stakeholders.”
- If you feel comfortable, you’re doing it wrong. “The way you grow professionally and personally, you put yourself in an uncomfortable position. There should always be a little bit of doubt with what you’re doing and there always have to be things to figure out. You have to always learn and keep growing. My mentor would push me in a situation where I was always uncomfortable. If I ever found myself in a position where I knew everything, then I had to keep moving,” says Ajay Kori, co-founder of UrbanStems.
- Don’t hold grudges. “If someone does something that hurts you, find a way to move past it,” says Danny Govberg, president of Govberg Jewelers. “Embrace the person. It will come back in a much bigger and better way. They will be unbelievably surprised by your response, and this can turn a bad situation into a friend.”
We asked local business leaders to share the best advice they have for other owners and executives.
Sales Huddle Group
“Work the lobby. Today, too many CEOs lock themselves behind a desk and focus on functions that other people on their team can do. You have to get out of the office, get on a plane and go places where you can network like hell and grow your business. Whether it is a workshop, conference or a client visit, I have experienced more success by getting out of the day to day of the office and stepping into a lobby to meet and connect with new people to create powerful opportunities.”
“The best advice I have received would have to be from my father, when he told me to keep a journal and write down any and all accomplishments during the course of a day. By taking five to 10 minutes at the end of my day and reflecting on all the things that I have done, I have really begun to be extremely mindful of how I allocate precious time. This has also been very useful for me to go back in my notes from months prior and reengage with leads or ideas that I may have forgotten. For gauging the validity of any advice, I think that it is extremely important to recognize if the person giving you guidance understands your business and holds any experience [in] your specific industry.”
“The best business advice I’ve ever received was from reading an interview on Oprah Winfrey and she said, “Personally sign all your checks.” Signing your company’s checks makes the CEO examine all of the paychecks and it keeps you engaged with the expenditure of your company. This is a practice that I’ve implemented in my organization. In my experience, with receiving and giving business advice you have to apply it as it relates to your business. Being a CEO, advice is given to you all the time because your supporters always want you to succeed and do your very best. Business is extremely dynamic, so it is important to keep in mind that what might have worked for me at one time or another may not work for you in your chosen profession.”
“Be the boss you want to work for. I worked for a large national company before, and have had a lot of different bosses. Everyone has their strengths and weaknesses. When I step back and think about the perfect boss that I would’ve wanted, that’s how I treat my employees. It’s worked well for retaining employees in a transient industry. What I try to do is make the overall package of working here (benefits and culture) a place that I would want to work as well. That helps to keep them committed and like they are a part of a team. I feel like taking that advice [has] helped me grow a really positive team and culture.” CEO