Starting a small business is fraught with risk, uncertainty and, yes, myths. So many supposed facts of entrepreneurship are actually old-wives’ tales or outright falsehoods that survive by being repeated (rather than by being true.) If you’re going to make it in the business world, it helps to critically examine these myths rather than mindlessly absorbing them. Here’s a head start–debunking six of the most common myths below:
1. “You need a great idea”
One of the biggest business myths of all is the importance of having a great idea. Basically, this myth says that you can’t succeed with an ordinary business like a restaurant or retail store or hotel chain. In order to really make it, you need to come up with a revolutionary, floor-shaking idea akin to the next Facebook or Google. Only then will your quest have any meaning or potential.
In truth, this is dead wrong. What matters far more than your idea is how swiftly and intelligently you execute that idea. A well-managed restaurant in the right part of town can make an absolute fortune for its owners, even though “the idea” is ordinary and hundreds of years old.
2. “I’m good at [insert skill here] so I should start a business that does that”
This is what Michael Gerber refers to as the “E-Myth.” In a book of the same name, Gerber writes that many entrepreneurs are actually “technicians” (skilled writers, chefs, architects, etc.) who had an “entrepreneurial seizure”, got tired of working for others and started businesses around their skills. Sounds logical, right?
Unfortunately, these technicians soon realize that there’s a lot more to running a business than performing their skill. The owner of a creative studio, for example, can’t spend all day writing anymore. In order to thrive and grow, they also need to learn project management, finance, marketing and various other business functions. It’s not impossible – not at all – but the transition from technician to entrepreneur is not as easy as it sounds.
3. “I’m friends with this person, so they would also be a good partner”
“Don’t do business with friends” is some of the most ignored advice in entrepreneurship. And it’s easy to see why: if you know and trust someone on a personal level and they want to get involved, why wouldn’t they make good business partners? Who else would you even think of working with? You might be right, but the odds are much higher that you’re wrong.
Simply getting along with someone is not enough for a successful business partnership. Once you begin working together, you immediately start caring about qualities that never mattered before: your friend’s work ethic and lifestyle choices, for example. No longer is he just a casual bar buddy or someone to watch the game with – now, a big part of your future is riding on their effort. This forces the relationship to become more professional than personal, and often creates disputes that render the partnership ineffective.
4. “X% of small businesses fail”
We hear this all the time: various studies and reports about the percentage of small businesses that fail within one, five or ten years. They sound threatening, but here’s the truth: you aren’t starting just a small business. You’re starting a web design company, or a bakery, or a web startup.
In other words: generic data about all small businesses are nowhere near as relevant as data about your particular type of small business. Every industry has different market forces, trends, buying patterns, decision makers and other factors that shape how successful you’ll be. You’re much better off paying attention to these things than dwelling on what happens to small businessesin general (many of which have nothing in common with yours.)
5. “You need a business degree”
Most fields require you to have some type of license or anointed status before starting. Technically, this is true of some businesses too like restaurants, for example. For the most part, though, business is unique in that you don’t need permission to succeed. You just do it and get paid or don’t and fail.
Furthermore, business degrees are not all they are cracked up to be. They’re certainly useful for learning hard disciplines like accounting that you might ignore on your own, but no degree program teaches you what to do when disaster strikes: when your biggest customer backs out on a moment’s notice, or when a key employee goes rogue and sabotages your store. Most of the day-to-day knowledge you need to be successful comes from experience and targeted research, not boilerplate classroom lectures.
6. “If you build it, they will come”
This phrase is a fantasy that novice entrepreneurs love: the notion that once you open for business, customers will instinctively flood through your front doors and start buying. In fact, nothing could be further from the truth. If your business has a prayer of making it, you will need to be its biggest cheerleader, chief publicist and most vocal advocate.
In short, you need to get the word out. Waiting for people to notice is a fool’s errand – they wont. They’ll just get scooped up by one of your competitors who understood the necessity of active marketing and outreach. To avoid this, put serious time and effort into reaching your target market.
Guest Author – Kevin Allen is a freelance writer for Invesp.com. Invesp helps businesses improve their online revenue, reduce customer acquisition cost, and provide their visitors with a better user experience through landing page optimization.