5 Common Business Myths About How to Start a Business
A Gallup poll shows that 57 percent of Americans would like to start a business and be their own boss. And digging deeper into the poll shows another surprising statistic: of those who already work for someone else, a full 61 percent of them want to start their own business.
This shouldn’t come as a shock to anyone as more and more people are understanding that there is no way they can build wealth or accomplish their dreams while punching the clock for someone else. In fact, when you go to work for someone else day in and day out, you’re doing nothing more than building their dream.
But along with all those aspirations also comes some common business myths that I’d like to put an end to today. And so for today’s blog posts, let’s talk about the most common 5 business myths around.
1. Business Myth #1: You Won’t Have to Work as Many Hours
Let me count the ways that this myth is absolutely false. When you work for someone else, you have to complete the duties for only your job. For most people that means a 40 hour work week, and some people may put in overtime during a special project or staff shortage. In fact, a recent survey shows that people who are employed by someone else work about 33.8 hours a week, according to the Bureau of Labor and Statistics.
But those people who are self-employed work between 50 and 60 hours a week. That’s because when you are your own boss, you no longer just have one job to do: you are the owner of the business, and that means you are responsible for all aspects of it.
2. Business Myth #2: You Won’t Have a Boss
It’s true that when you start a business you won’t have a boss looking over your shoulder and directing every step you take. You will no longer have to report to “the boss,” or ask off if you need to attend a family event. In fact, you will never again have to check with “the boss” when making an important decision about an account or project.
But here’s the rub: you will now have to check in with dozens, if not more, bosses.
Yes, you read that right. Because you are running a business, you will work for individual clients, and guess what? Each and every client you work for is ultimately the boss. For example, if you need to spend time with your family, you will have to make arrangements for that if you’re in the middle of a project with a client. And when considering the next move for a project, the client may want to be in on the decisions.
It’s different I know. But the truth of the matter is that even though there is not a single “boss” to report to, you are still held accountable by every client you sign on.
3. Business Myth #3: You Will Become Instantly Rich
While it’s true that people who start a business go on to earn more than those working for others (provided that they’re not in the 50 percent of new business owners who have to close their doors in the first year), the wealth that comes from starting a business doesn’t magically appear overnight.
In fact, you have to work hard for years, and sacrifice a lot financially to get to that point. (Related: How Much Do You Pay Yourself as a Small Business Owner?)
If your reason for starting a business is financial independence, its important to understand that while it is possible, it won’t happen overnight and you’ll have to work hard for it.
4. Business Myth #4: Passion for the Idea Will Make it a Success
I’m going to try hard not to stand on my soapbox for too long on this one. Planning and preparation are the key to success in any business venture—period. In fact, this topic is so wide-reaching I’ve just pre-released a book on the topic that aims to help would-be entrepreneurs understand how planning and preparation is the number one determining factor in whether a business will thrive or fail.
You see, it’s possible to have the greatest business idea in the world and fall flat on your face. There are numerous studies that show a lack of planning and preparation are the key reason why 50 percent of all new businesses fail within the first year.
So yes, a great business idea and the passion and commitment to seeing it through are of monumental importance, but frankly, aren’t enough to successfully launch a new business. To do that, you’ll need to prepare and plan for success.
5. Business Myth #5: You Need a Business Loan, Investor, or Some Other Way to Get a Lot of Money for a Business Startup
Luckily, this simply isn’t true anymore. Lean startups are a relatively new phenomenon, and there have been a lot of businesses that have achieved success using this method. In addition, since so many banks have stopped lending to small business owners, alternative ways of raising startup capital have exploded. You can read about 7 of the most innovative and helpful here.
People used to believe that the more money you could get for a business startup, the better. But today's entrepreneurs are doing more with less, and the result is that these business owners are running new businesses without a lot of debt. That means they have more cash flow to reinvest in the business, which of course will increase their chances of success.
Common business myths abound, but savvy entrepreneurs know the difference between wishes and reality. Have you discovered any business myths that you want to share? If you haven't yet started your own business, did any of these surprise you? If so, I love to hear about it in the comments below.
Until next time,