Don’t Fall For These Falsehoods About Entrepreneurship
Want to start a new business? Start by questioning everything you know about launching a business.
There are a lot of entrepreneurship myths that trip up new business owners, so before you invest time and money in an idea based on what you think you know, it’s wise to get a clear idea of what to expect in terms of time commitment, expenses, planning, and personnel.
Here’s a reality-check list of common myths about entrepreneurship to arm you with realistic expectations and a better chance of success.
Myth #1: When you start your own business, you have more freedom in your schedule
If by freedom you mean “the freedom to work a heck of a lot more hours than a salaried employee,” then yes, you’ll have that.
After your business is well established and profitable, you might reach a point where you can work a “normal” schedule. When you’re just launching, though, plan on at least a year of spending most of your waking hours (and some of your sleeping ones) working. This is as true for self-made millionaires as it is for more modestly successful independent writers, photographers, shop owners, and other new business owners.
Myth #2: You need a brand-new product or service idea to succeed
Think about how long humans have been making, selling, and buying things. For thousands of years, people have worn clothes, eaten food, used some type of transportation to get around, and so on. Those items have evolved over time, but there’s never been a blockbuster new item that’s completely replaced, say, the wheel.
Refining existing ideas to serve customers better is how you’re most likely to find a successful niche or opportunity. Develop a clear and concise business plan based on your “better mouse trap” and go from there instead of trying to summon something unheard of out of your imagination.
Myth #3: As a business owner, it’s cost-effective to do everything yourself
Maybe at the very beginning you can take care of the books, the products, the marketing, and office cleanup, but at some point, your time is going to be more valuable spent working on the business than doing tasks within the business.
Once you reach that point, any time you spend on tasks that could be delegated instead of developing new products, booking new clients, or expanding your market is a lost opportunity cost. That point can arrive sooner than you expect, especially once your sales are growing.
Myth #4: You can outsource virtually every aspect of your business
As mentioned above, at some point it may make sense to outsource some of your business tasks. But the fantasy of starting out by farming out all your processes and then sitting back and collecting revenue is not realistic.
That’s because high quality outsourcing costs money that you may not have available to spend when you’re just starting out. And using cheap, low-quality outsourcing is a good way to fail quickly. Your business processes, product quality, and customer service can all suffer, and you may end up putting out fires instead of growing your business.
Myth #5: These days, you can start a business with no money
You might be able to start a business with minimal upfront costs, and you might be able to use someone else’s money to get started, but either way you’re going to need some funds. Starting with nothing may seem scrappy and admirable, but it’s not realistic and can undermine your chances of success before you begin.
I sometimes talk to people who want to start selling their professional services like writing or photography without investing in a proper website, a professional headshot, the right kind of insurance to protect their new business, and other must-haves. Without these things, your business may look unprofessional to prospects and—if you go uninsured—it can expose you to liability.
Myth #6: You need venture capital to start your business
Competition for private investment is fierce and serious. Unless you have some successes under your belt and an idea that captures the attention of investors, you’re probably not going to get venture capital—and you probably don’t need it.
Most people who want to start a new business and need capital should consider a loan from the Small Business Administration, a local bank, or a credit union.
Myth #7: Your family and friends can help you launch your business
Every budding entrepreneur considers hiring friends and family at some point–or even asking them to work for free. The temptation is understandable. You already know and trust these folks, and they may have skills you need.
However, most experts discourage new business owners from relying on friends and family for two big reasons (although there are certainly more). First, working with relatives and friends is an expert-level skill that even experienced business owners struggle to master. Work dynamics affect personal relationships outside the office even if you never have to correct, retrain, or fire someone you care about. Second, asking anyone to work on your business for free devalues their work—and people working for free may not give your projects the time and attention they require.
Myth #8: Successful business owners go it alone
Business is competitive, but it’s also collaborative. Owners—especially inexperienced new ones—who keep to themselves miss out on opportunities for learning, networking, and growth.
You need other people’s input and ideas to make your business work. Mentors who’ve been through the startup process are a valuable source of information, encouragement, and inspiration. Conferences in your field and in-person or online peer discussions can help you identify common pitfalls, answer questions, and provide advice. Every smart business owner focuses on hearing customer feedback, and supporting community activities or causes that matter to you can raise your business profile and build goodwill among your customers.
By getting clear on what’s actually involved in starting a business, you may find you have to change your approach before you get started. But by going in knowing what you can expect, you’re more likely to get your new business off to a strong start.