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
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
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
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.
Myth #9: Entrepreneurship is only for certain types of people
There’s a lot of media coverage of new businesses in Silicon Valley, where startup founders skew young, techy, and male, but anyone with a good idea, some resources, and the willingness to do the work can start a business.
In fact, nearly a quarter of new entrepreneurs in 2016 were ages 55 to 64—roughly the same percentage as the 20 to 24-year old age group. As of 2015, 31% of privately held businesses in the US were owned by women. And according to 2016 federal data, the number of minority-owned businesses increased by 38% from 2007 to 2016.
Myth #10: Your older kids can help your business succeed
There are plenty of business owners who hire their teenage kids to handle tasks like preparing orders for shipping and taking orders for the online store. For some families, this is a great way to build the value of the business and let teens earn some money and work experience. However, it’s best to treat that teen labor as a possibility and not something your business will rely on.
That’s because teens are still developing and exploring their interests. They may enjoy working for you for a while but then decide to get another job, take on more extracurriculars, or pursue a rigorous academic path that leaves no time for work. (They might also just fall asleep and forget something. Being a teenager is hard.) It’s also worth noting that parent-teen relationships can be tricky to navigate even without a boss-employee dynamic in the mix. If your teen loses interest or takes on other obligations, be prepared to find other help.
Myth #11: You’ll get to spend all your time doing what you love most
Every type of business has these must-do tasks, and when your business is growing rapidly you may find yourself devoting more time to them than to the creative or interpersonal work that inspired you to start your business in the first place. The good news is that growth can allow you to outsource and delegate some of the things you really don’t like doing, but there will always be responsibilities beyond the things you enjoy the most. Consider them costs of doing business.
Myth #12: With persistence, you can achieve anything
Sometimes great ideas don’t pan out, no matter how much work you put into them. Circumstances beyond your control can spike your business, whether it’s better-funded competition or a market crash that causes banks to halt small-business lending.
Mistakes made early in your startup process can catch up with your business later on, too. For example, if you started your business without doing thorough research with the best available data, you may have overestimated the market for your product. And while persistence is a must-have trait for business owners, it can sometimes prevent them from giving up when it’s obvious that the money’s not there, the customers aren’t coming, or everyone’s sad.
Planning for success is always best (and more fun), but it’s also a good idea to decide early on what your criteria are for scrapping the startup and moving on to something new.
Myth #13: You should always go with your gut
There are a lot of business decisions that require you to do some research and/or hire experts in order to get the results you want. Going *only* with your gut when deciding, for instance, which new products to develop can be a recipe for lost time and money. A better use of your intuitive skills is developing a list of possibilities and then listening extensively to feedback from customers and focus groups to get a realistic sense of demand.
Myth #14: When you run your own business, you’re the star of the show
When you look at lifestyle brands like those led by Oprah Winfrey or Martha Stewart, it’s easy to think their success comes primarily from focusing on their superstar founders. There’s no question that charisma and a relatable persona are musts for lifestyle entrepreneurs, but they’re only part of the big picture. The most important ingredients are how these charismatic, relatable business people make their customers feel about themselves and the value they offer their customers.
For example, Oprah’s fans know she’s a role model for thriving after overcoming obstacles, because she’s shared her story over the years. But they keep coming back to her website, buying her books, watching her shows, and reading her magazine because her media empire offers shows, stories, and articles that inspire people to cope with their own challenges. So if you’re starting a lifestyle brand, put yourself out there, but do it in a way that gives your customers something they want or need.
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.
For more information on what it really takes to be your own boss, check out HostGator’s Guide to Launching Your Home Business.