8 Common Myths About Starting a Small Business
In the "dot com" era of the 1990s, I started a couple of technology companies and ended up running my own profitable small business for five years. Starting your own business and working for yourself sounds great — and it can be! But it seems like many people who dream of starting their own business don't understand some of the hard realities that go along with this undertaking. Don't buy into these myths about working for yourself.
1. You Have No Boss
A big reason some people want to start their own business is so they can be their own boss. But even if you own a business, you still have a "boss." Your customers, investors, and employees are now your boss. The bottom line is your boss, too. Instead of answering to one boss, you now need to answer to many.
2. You Can Work Fewer Hours
While you can set your own schedule as a business owner, you will likely end up working a lot of hours overall to get everything done. In my startup days, I knew entrepreneurs who worked 100 hours per week, including lots of late nights and weekends. Starting a business is generally not a way to gain more free time.
3. Your Minions Will Take Care of the Details
The reality is that most small business owners wear a lot of hats and handle matters big and small to keep the business going, including things no one else wants to do. As the owner, you will get to work on lofty tasks such as business planning and strategy, but you will likely also clean the bathroom at first.
4. If You Build a Better Mousetrap, the World Will Beat a Path to Your Door
A common entrepreneurial myth is that you can invent something great and then sit back and watch people buy it. The reality is that you need to produce the right product at the right time for the right price in the right market channel to be able to watch people buy it. Even if you have an awesome product idea, it takes enormous work and resources to produce your product and bring it to market.
5. You Have More Control Over Your Income
As a business owner, I seemed to have little or no control over my income. I worked hard all the time trying to bring in income and win new business. Sometimes there was a lot of income, but sometimes there was none, despite my best efforts. My income ultimately depended on fickle customer decisions and economic forces beyond my control. Income for small business owners can be quite volatile.
6. Investors Will Throw Money at a Great Idea
I was disappointed after my first few pitches to potential investors. I imagined that I could simply summarize the potential market size, present my brilliant product concept, and walk out of the meeting with a briefcase full of money. The reality is that it is hard to find investors willing to risk their money in a startup business venture — even if you have a great business concept.
7. Determination Can Overcome Any Obstacle
Determination is perhaps the most important attribute you need to start a business, but you also need the right opportunity. Some people throw everything they have into starting a business venture that has almost zero chance of success due to limited market size, faulty assumptions, or other flaws. Persistence can get you started, but a viable opportunity is necessary to build a prosperous business.
8. By Taking Big Risks, You Set Yourself Up for Big Rewards
Another popular myth is that entrepreneurs reach success by trading risk for reward. The reality is that most entrepreneurs trade hard work and a good plan for a modest reward. Successful entrepreneurs reduce and manage risk well in order to avoid quick business failure. Taking big risks should be a last resort, not the primary plan.
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