Business Myths

★  Myth #1. I Need A Lot Of Money To Start my Business...

It all depends on the nature of your business. A normal start up is only about $25,000, which can easily be reimbursed once the company has been up and running. Many profitable small businesses have been started with only a few thousand dollars. Consider some options where you can borrow things instead of paying for them and rent instead of buying.

★  Myth #2. I Shouldn’t Start A Business In This Economy...

There’s no time like the present. Did you know that many successful businesses were started when times were tough? Ever heard of Burger King, FedEx and Sports Illustrated? All of them were started during recessions and became highly successful companies. If you have a just good idea or something you’re really enjoying to do, don’t let an economic downturn get in the way of your entrepreneurial spirit.

★  Myth #3. If Only I Have A Great Idea...

It’s difficult to exaggerate how many books, articles and speakers have declared the monumental importance of starting out with an amazing idea. So universal is the appeal of “The Great Idea” that many now believe it is impossible to succeed with ordinary, proven business models like cleaning carpets or delivering pizza. In fact, there is very little truth to this at all. What really counts is the speed and effectiveness, with which you execute. Furthermore it matters more that you are implementing the idea you personally wanted to implement.

★  Myth #4. It Is All Depends On Hard Work...

Hard work is an absolutely necessary, but not sufficient condition for starting and growing a business. It is the given, but without a solid business plan and compelling value proposition for customers and partners all of the hard work in the world will be for naught. The world is filled with over worked, over-stressed, and not terrible successful small business people who struggle not because of lack of appropriate effort, but rather for lack of appropriate planning.

★  Myth #5. 50% Of Small Businesses Fails...

We see such statistics reported constantly, paining a gloomy picture for any prospective small business owner. Here’s the truth about this one. There is arguably no such thing as the rate of “small business that fail”. The phrase “small business” is scandalously vague, encompassing such wholly different and unrelated fields as restaurant operation, self-publishing, plumbing, and web-design. For more important for your own decision making should be the unique factors relevant to your market, your customers, and your products and services. If date is available on success and failure rates in your industry, these are far more meaningful than any genetic statements about “small businesses”.

★  Myth #6. My Employees Will Do All The Tasks...

If you have ever uttered the sentence “Oh, I’ll just hire people to do that” in a dismissive tone of voice, you have fallen victim of this myth before. By now, however, you might be painfully aware of how far short it falls of the truth. The truth is that in most businesses, you will need to be a generalist who has at least some working knowledge of all the tasks needed to run the show. It doesn’t mean that you need to be an accounting expert to hire an accountant. However, if you literally know nothing about keeping the books, how can you know whether the accountant you hire is competent and ethical – or setting you up as his own miniature Enron? Once when you grow it will then become feasible to hire some help in managing the expansion.

★  Myth #7. It Takes X Years For Small Businesses To Turn A Profit...

We often hear discouraging estimates that it can take as long as 2-10 years for a small business to start putting money in the owner’s pocket. In short, the truth eludes generic estimates and depends largely on the nature of business you are in. For example, a web designer can make a profit on day one by charging the first client more than it costs to design their web-site.

★  Myth #8. I Will Have More Free Time...

You will almost certainly not have more freedom. That’s the difference between having a job and running a business. Whereas a problem outside your job description can be dismissed as “somebody else’s problem”, when it’s your business, every unresolved problem is your problem. Furthermore, you will come to see your company as an extension of yourself rather than something you passively do for money.

★  Myth #9. I Can Write Everything Off...

Entrepreneur.com quotes New-York based CPA Philip C. Roventini admonishing small business owners to always ask, before attempting a write-off: “Is this something I would have bought anyway if I were not in business?” Keeping this standard in mind, you probably will not get away with deducting 100% of your car payments, nor gas and repairs. Rather, you deductions must be limited to those things which pertain strictly to the operation of your business. In other words you can write off the portion of your auto expenses as you can document as being essential to your operations. Keeping good records is also critical. Basically, if you cannot document it and cite a clear connection between the write off and the operation of your small business, your attempt at a write-off could trigger audits, fines or worse.

★  Myth #10. I Can Pay Myself Wherever I Want...

While it’s true that having equity in profitable business typically offers higher income potential that selling your time, it is not true that you can pay yourself “whatever you want” either. What you take out as income will be subject to input from various factors, such as product sales, your costs, and whether you plan on expanding. Many small business owners, for instance, re-invest early profits back into the company to full its growth. Then again, others don’t, preferring instead to taste the fruits of their labor as early as possible. Neither approach is necessarily right or wrong, but it’s important to be aware that your income is not unlimited. You will be limited by the constants of your business of how much salary you can take out, both in the beginning and throughout the life of the company.

★  Myth #11. When I Build My Clients Will Come...

Very simply, customers today have an endless array of choices – for everything. That means that simply “building it” is most certainly not going to bring anyone through your doors (or onto your web-site). In order to succeed as a business owner, you will need to actively and ambitiously market yourself to customers. Some businesses (like restaurants) often thrive of word of mouth promotion. No matter what type of small business you choose to start, it will rarely – if ever – be sufficient open up shop and wait for orders to start pouring in. Instead, consider your number one task after opening to be spreading at the world as far and wide among your target as often as possible.

★  Myth #12. More Men Than Women Open Businesses...

In actuality, women are driving the growth of small businesses in the United States. According to the latest U.S. Census data, women start businesses at 1.5 times the national rate, and are estimated to own just over 8.1 million enterprises that generate nearly $1.3 trillion in revenues and employ 7.7 million Americans. While it may once have been an all-boys club, owning a small business is now gender-neutral. Women should not be shy to launch a venture they believe in. The opportunity for them to succeed is just as good as it is for men.