How to tell someone not to start a business?

Question

My Tae Kwon-Do instructor is looking to make a little extra money on the side. He's hired me to do some graphics work for him, which I'm more than happy to do, but now I'm beginning to wonder if he's done his research.

The area he's looking to get into is very niche-oriented - there isn't a lot of consumer traffic and the startup costs could be huge. I'm afraid he hasn't done his research and is about to sink a lot of money into something that isn't going to pan out.

I want to tell him this, at least ask him if he's done his research, but I can't just come out and say that. I've only known him for six months, and then only through TKD and the graphics work I've done. We are friends, but I just haven't known him that long. I wouldn't know about his proposed business at all if it weren't for the graphics work. That being said, I don't want to see him sink a bunch of money into something that isn't going to deliver.

How can I tell him what he's doing might be a bad idea? I don't want to offend him by suggesting that he doesn't know what he's doing, but I also don't want to see him sink a bunch of money into something that won't deliver.

Note that I am not an expert in starting up small businesses. It's what my family does, so I know the general principles, but it's not like I've done extensive research on it.

Answer 1

I would put together a list of common problems and hurdles that you think he might face, then ask him about how he plans to overcome them.

Word the questions so that you are assuming that he is prepared and you want to know how, rather than asking if he's prepared.

If he answers the questions well then you'll know that he is prepared and can rest easy. If he answers poorly then it will hopefully draw his attention to how unprepared he really is.

Answer 2

Honestly, I wouldn't say anything unless or until he asks for your advice. As a former small business owner, I can say with some authority that these problems tend to work themselves out and they do so fairly quickly.

I'm assuming that he'll need to obtain funding for this venture, since you mentioned your concerns about the expense involved. That's typically the first and often insurmountable obstacle.

Where people go wrong is when they invest their own money into their idea. That's a problem because it demonstrates that the business owner was not able or willing to sell the idea to an investor or venture capital firm and so the question concerning the profitability of the venture has gone unanswered.

You are in business to produce creative. If I only accepted programming contracts from small businesses that had a sound business plan, my company would have collapsed, almost immediately.

That said, it is very often the case that prospective business owners approach people like yourself with the intent of obtaining a business partner if you could provide services via your labor that the business owner can't afford him or herself. If you believe the professional relationship is headed in that direction or you believe he can't pay you for the work he's commissioned, one course of action might be to explain that you've had a recent and unexpected uptick in business and that you can only spare x amount of time. Then, refer his to someone else.

Hope this helps.

Answer 3

How can I tell him what he's doing might be a bad idea?

He's starting up his own business, odds are he is fully aware that it might be a bad idea.

Note that I am not an expert in starting up small businesses

Nor do you seem to know his business plan, source of finance or how much research he's done. If you were a close friend or a family member that's fine - but:

I've only known him for six months, and then only through TKD and the graphics work I've done

You don't know him well enough to be questioning his intentions. There will almost certainly be people much closer to him than you who will ask these sorts of questions. Starting a business is not something done in isolation and most people who think about doing so quickly give up when they discover the time and effort that it will cost to do so.

It isn't your place to be questioning him (unless your Graphics work for him is being paid for at a later date in which case I would rectify this immediately). If I've misread your post and you're actually really good friends then of course ignore this advice but from what I can tell you are his customer (TKD) and he is yours (Graphics). Don't jeopardise these good business relationships by intruding on another aspect of his life. On the other hand, if he asks you for advice or your opinion then he is inviting you into that part of his life and such questions about his research are perfectly valid and shouldn't offend him.

If I were in his position and had not asked for your opinion, I would consider your suggestion that I hadn't thought things through to be offensive no matter how you phrased it.

Answer 4

How can I tell him what he's doing might be a bad idea? I don't want to offend him by suggesting that he doesn't know what he's doing, but I also don't want to see him sink a bunch of money into something that won't deliver.

Don't tell him it might be a bad idea.

Ask him about his plan and offer any advice you like at that point.

But trying to stop him is not your right. You have the right to offer help and advice, but not to stop him.

I appreciate you're trying to help him not waste money, but you don't know he will and he has the right to try and make a success of it. You need to offer suggestions that will make it more likely to succeed. Sure warn him of a possible fail but the reason to start a business is not always to make money, but the need to try and do it.

Starting a business is, in many ways, always a bad idea. It eats time and it typically won't make a profit for years (they say budget for two or three years of losses). But those are not reasons not to try, they're just things to be aware of before you start. Plenty of people try and fail at starting a business, but even people who fail often regard it as a necessary thing they had to do for themselves and they don't really regret it.

Your friend has the right to try. You have the right to try and help him with advice. But you should not presume to try and stop him.

Answer 5

It's a pretty common situation and I've faced some of those, so I guess I have an universal approach.

You are trying to appear as an outsider to the problem(since your work is drawing) and tell the person "I've got some thoughts about your plans and I think, you haven't done your homework on the topic and ...", so that what you think his situation is. But rather than stating it, I would like to recommend trying an reversible approach. You've got some thoughts on the topic and your logical chain has come to the dead point, so why don't you state it. You don't need to start with what you think of it, but rather say something like "I do want to know, how are you planing on developing the start-up?", "don't you think it's a niche-oriented field? How can we work with it?", so the conclusion of your dialogue may match your own one as well as it may not, but anyways, you'll get your boss to think of all this stuff himself (with your help as a collocutor) and you will be the one facing the problem with your boss rather than thinking of it as an outsider.

Answer 6

I think that in order to tell him correctly that it's a bad idea you first need to establish that what he wants to do, the way he wants to do it, is a bad idea.

I think you need to obtain more information first before assuming that he will fail in what he wants to accomplish. Perhaps making lots of money isn't his goal.

I had two questions up top which I will draw upon for this next section:

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• You don't know he's going to sink a ton of cash into this or if he has spare cash and can easily afford to try.

• Has he demonstrated poor judgment outside of his ability to teach.

• He succeeded in convincing you to become a student, what does he need to do to convince you he can operate a different business?

We need more info.

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• I know people who have there own somewhat successful businesses. They all have slow growth and low attendance, but some are devoted and it's those people that they are pleased to teach.

• I see many businesses where it's entirely clear that the business model is poorly convinced, executed, staffed, ran, you name it.

  It's 50% Advertising Company (to convince people to work their and convince customers to purchase and come back) and 50% Joke and Novelty Store (it's a joke and the novelty wore off long ago).

  Most of those places are out of business when the lease is up, others stick it out for a few years, rarely they have way more money than brains and attempt to peddle garbage for decades.

  Sadly, people have the right to do that unless they are subject to some sort of inspection or certification.

• He might wish to invest in and develop their own small business as a 'source of pride' to be a small/family business owner - like you will inherit your family business.

• Why do people climb Everest? The risk and challenges, not to be first or safe.

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Simply ask if he understands the costs and success rates of starting a small business, tell him you are concerned about the prospects of growth and wish him success.

We need more info to do a business analysis, but that's getting off topic.

Answer 7

There are two concerns when approaching this individual.

1. You might deflate his well thought out and discovered bubble in just one second.

   Take care that you compliment him sincerely at first for his innovative idea before you proceed to the point at hand.

2. Upon advising in such a matter you are saying that 'your inexperience and childishness led you to even thinking you have unveiled a new brainstorming business.

   It is of utmost importance that you tell him your concern about the matter, however being that we want to minimize the insult he inevitably and inescapably(being that we need to save him from this foresighted disaster)has to endure,he therefore, shall evade seeing his face upon receiving your advice,as watching his reaction to the news will immensely add to his shame.

Therefore I advise that upon finishing his message he should not just stick around near him, rather give him his privacy for the moment.

The advantage of this is twofold as some shame shall be avoided and the receiver of your advice upon noticing you took care not to see him at this moment of shame will feel cared for and loved.