Business Mistakes 101

This small business mistake is part of a collection excerpted from Gary Schine's book 101 Small Business Mistakes

Mistake -- Believing that "Experts" Have Magic Answers

No matter how you slice it, entrepreneurship carries risks. There is no way that your success can be guaranteed , and there is certainly no one who can guarantee it for you. There are consultants with considerable knowledge and skill in different areas of small business management. Their technical input and their experience can be very helpful to the small company's management personnel. But look to them as technical advisors; don't look to them as magicians with all the answers. Most professional consultants will tell you straight out that they don't have magic answers and will discourage you from looking to them to perform magic. In fact, you are well advised to avoid those consultants that imply otherwise.

Despite the consultant's breadth of knowledge and experience, you are the person who runs the business on a day to day basis. You are the one who must survive in the trenches of customer relations, competition, and the daily challenges of business ownership. Don't be afraid to go against a consultant's advice if your gut feeling is that he or she is wrong. At the same time, do listen to your consultant's recommendations, and his or her reasons for making those recommendations.

When hiring consultants try to find someone who has specific expertise in the area in which you need help. I wouldn't want a finance guy advising me on marketing or a marketing guy advising me on debt versus equity capital. Don't be afraid to ask a consultant about his or her specific training and experience. Reputable consultants will not take on an assignment for which they are not qualified.

Finally, don't hesitate to ask a consultant for references. However, be aware that this may be a bit harder than it seems. Clients of consultants don't always want the world to know that they hired a consultant. This is especially true if the consultant was hired because the business was (or is) in trouble. Nevertheless, a good consultant should be able to come up with at least three people who can vouch for his or her abilities.

Other Business Mistakes and Misconcetions

• Failure to Prepare a Business Plan
• Myth-- A New Business Must be Based upon Uniqueness
• Overspending
• Momentum
• Starting a Business for Reasons other than Market Demand
• Entering into Partnerships without Clearly Defined Roles
• Not Putting Partnership Agreements into Writing
• Organizing A Small Company as a Large Company
• Misconception-- A Product Can Be So Good, It will Sell Itself
• Not Understanding Your Product's Benefits
• Believing That Experts Have Magic Answers
• Not Pricing Based on Benefits to Buyer

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