Small businesses are what drives our economy. They are our job and opportunity creators. They idealize what it means to be American and they are just who we need to be supporting in order to boost our economy. However, a lot of false information is being passed around. Small business myths exist everywhere from starting a small business to running one. Check out our list below and get the facts straight!
Starting Your Small Business
1) The idea is more important than the details – Although a great idea is crucial to starting a successful business, don’t be fooled thinking the idea is going to take you the whole way. The details are just as important. In fact a well-executed, decent idea is better than a poorly-executed, excellent idea.
2) Passion will get you there - Although passion is a must when putting your neck out there, starting your own business, it alone will not be enough. You have to be weary of how your emotions play in. Sometimes too much passion for an idea will keep you from being able to iterate and adjust your business model to the advice of investors and even at times customer feedback.
3) You need a business degree - In our world today, we are used to the idea that if you want to work in a certain field, it requires a certain degree or license. And although there are business or entrepreneurship degrees, they are not at all necessary. In business, you don’t need permission to succeed. You just do it and get paid or don’t and, well, fail.
4) You’re too young – Did you know, at age 10, Leanna Archer became the owner and CEO of her own company, Leanna’s Hair Products? She is the youngest person to ring the opening bell for the NASDAQ stock market. There’s no reason your youth should be a hindrance.
5) You’re too old - At the ripe age of 106, Jack Weil ran Rockmount Ranch Wear. He was one of the oldest entrepreneurs in the US. Rockmount is a pretty famous clothing line known for many reasons, one being to clothe the actors in Brokeback Mountain (you know, the Academy Award winning movie).
6) It’s a bad time to start your business because of the economy – Sometimes starting a business in a bad economy can be a blessing. It gives you an opportunity to run your business lean and mean. It will really test your toughness. If you can survive during a bad economy, you can flourish during a good one.
7) Majority of start-ups fail – This statement doesn’t really represent the numbers truthfully. In fact, according to data from the U.S. Small Business Administration, 67 percent of new businesses are successful after four years. That means only 33 percent fail. Just make sure you goal is to insure you are in that 67 percent!
8) Guard your idea or someone might steal it – Although this might appear smart, especially if you have a particularly good idea, keeping it entirely to yourself can prevent it from developing into a brilliant one. You need to talk through your idea with a select number of people, which will only make it, and you, better.
9) Your business plan must be rock solid from the very beginning – Pressuring yourself to think that your business plan must be exact from the very beginning is lethal. You have to be prepared to be adaptable, changing to demand or the industry landscape. Set a principal plan, but encourage yourself that it will change, and know it’s a good thing when it does.
10) A business plan is not necessary – At the same time, don’t think that just an idea is enough. There is a difference between an idea and a business. Transform your idea into an actual business model. A business plan allows you to look ahead, know what resources you’ll need and what kind of problems you could find yourself getting into. Not even sure where to begin? Find out more here.
11) If you’re not getting funding, you don’t need a business plan – Another misconception is that you need a business plan, but only if you are getting funding. The thought is that a business plan is only to show others. A business plan, however, should be for yourself first and foremost. It gives you perspective and uncovers things you didn’t even know you needed to know (which in turn will help you come up with solutions to potential problems).
12) You don’t have to register your business – There is a misconception that given your business is small, you don’t need to register. However, it has nothing to do with the size of your business. If you want to do business in a state or country you must register with both.
13) Your friends with this person, so they’ll be a great partner – It seems to make sense, if you know and trust someone on a personal level that they would, of course, make a good business partner. However, the odds are not in your favor. When you begin working with someone, the entire makeup of the relationship changes and it becomes more professional than personal and can create disputes that will ruin the partnership.
14) You have to answer all the questions before you start – It’s called “analysis paralysis” (yes there’s a name). It’s what you do to yourself when you think you have to know EVERYTHING before you start. But you know what? You never will know everything. As a small business owner you will always be learning.
Small Business Legal Issues
15) You can do it yourself – When first starting off, many owners feel that in order to save money they should try doing everything themselves. They form their own corporations, write their contracts, etc. Although this does save costs on legal fees, it certainly doesn’t replace working with a professional. If you think about it, legal feels actually look cheap if professional advice in the beginning saves you from expensive litigation or other serious legal problems later on. Check out Rocket Lawyer for a cost-efficient alternative.
16) A handshake seals the deal – It’s great to trust the people you are doing business with but, no matter what, paperwork is always better than trust. Oral agreements can lead to misunderstandings between the two parties (and are near impossible to prove in court). Written agreements are mandatory if you want to sue. As well, by outlining everything on paper, it will make sure there are no misunderstandings between you and the person whom you are conducting business with.
17) Incorporating protects your assets – Some small business owners think that if they are incorporated or have formed an LLC, than their personal assets are protected. While it will protect these things from most creditors, you can still be exposed if you have co-signed on any company obligations, aren’t paying employment taxes to the government, and if you aren’t keeping your business finances separate from your personal.
18) No legal protection for your company name is necessary – Sometimes so much thought goes into creating the perfect name for your company that you don’t stop to think, “Wait, did someone else have this same great idea?” It’s not just that someone might have had that same idea; it’s that they might have already taken the steps to legally protect that name (which means you can’t use it without getting sued). Protect your intellectual property and get a trademark. It will save you legal fees down the road if you find someone using your name.
19) Being a small business makes you invisible to the government – Don’t be fooled, businesses are extremely regulated on all levels here in the US. Your business is never too small for some of these regulations. Stay on top of them by checking out the SBA’s Business Law and Regulation page.
Funding Your Small Business
20) Lending is readily available for small businesses – If you’ve been reading the news at all lately you know this isn’t true. Thanks to the recession, it’s harder than ever for small businesses to get cash from the big banks. Be aware that financing won’t come easily as you move forward building your small business.
21) Lack of funding is the #1 reason small businesses fail – However, in that same vein, don’t fool yourself into believing that the only way you can be successful is with a ton of funding. A lack of funding usually is a product of more serious business problems, such as the inability to control costs, underpricing, not changing the business model to keep up with competition, over-financing and not saving. Don’t blame a lack of money on failure, look at the reasons why the money isn’t there.
22) Starting a business takes a lot of money – You do not have to raise money to start your business. Period. What DO you need? A killer idea, the ability to be resourceful and ingenious. Having lots of money in the very beginning will keep you from developing these characteristics. How do you start the business without a ton of money? Keep your day job. Work on your business in the evenings, weekends and during vacation. This will allow you to pay your bills (give you room to breathe) and provide you with the essential resources you need most for the business.
23) Bank are the only place you can get loans – Part of getting ahead of your competition is looking at things they are not doing and doing them. A misconception in financing your small business is that banks are the only places that will give you money, when in fact, in today’s advanced day and age, there are many creative options. For example, look at online lending platforms, crowdfunding, invoice factoring, to just name a few. Don’t be afraid to explore atypical lending sources.
24) All kinds of government grants are available if you want to start a business – Wouldn’t it be nice? Sadly, though, government grants for starting small businesses are rare. Don’t rely on getting funding from the government. Check out all the other lending options available.
25) SBA loans money directly to small businesses – There has been some confusion: the SBA doesn’t actually lend money directly to businesses. The SBA (which is actually an independent agency of the executive branch of the government) is the guarantor of 3 different loan programs. These programs, aimed to benefit small business owners, are the 504 loan program, the 7(a) loan program and the 7(m) loan program. For the record, the SBA facilitates it’s financing through an entire network of lending institutions.
26) Venture Capitalists loan money to startups – VCs seem like a dime a dozen nowadays but a great business idea alone won’t get you that venture funding. For most VCs to look at you, your company needs to have a good track record, been doing business for at least 3 years, and look to have a promising future. They are interested in seeing detailed strategies, strong growth potential, and companies that have either a large regional or national client base.
27) You can’t ask your family and friends for money – When looking for innovative financing options, small businesses sometimes don’t realize how close their options are to home. Believe it or not, it is ok to ask your family or friends for money. They know you and how dependable you are (which is like “credit”). Depending on the individual and their access to cash, you might be able to borrow money with no interest. In other cases, you can do so at a very low rate, which would be smaller than anything you could get from a bank but also gives your friend or family member a chance to turn a small profit.
28) Your assets aren’t large enough to lease or factor – What some small business owners don’t realize is that they can actually use what they already have to get some cash when they need it. You can lease your equipment or factor your invoices, no matter the quantity. Look within to see if you have anything you can use to get some cash.
29) Debt is the devil – It in ingrained in our brains that debt is B-A-D. And although debt should be something that should be kept in control, it is something that can really facilitate your business. It gives you the ability to attain certain things you need to bump your business to the next level. As well, debt gives you a chance to establish credit and having credit will allow you tooperate on net terms with vendors, which will give you more control over your cash flow.
30) You can use your personal credit score – One of the biggest mistakes small business owners can make is thinking they can apply for business loans with their personal credit score. DON’T bring your personal credit into this. If you do so, creditors can go after your personal assets. Keep the business and personal separate.
31) You don’t need a business credit score – Some business owners think they can run a business without a business line of credit. They think they will never need to borrow and don’t realize the other benefits it can have. Don’t let yourself miss out on the opportunity to operate on net terms or not be able to take a loan when you need one most because you didn’t make building business credit a priority.
Marketing Your Small Business
32) Competitors are always unfriendly – This is one of the biggest misconceptions in business. Although competition is always competition, sometimes they can be your greatest resource. They can be a mirror for your business and give you a better look into what is happening with your market. Turn to them for advice and create relationships with them. This is where partnerships can be born. No matter what, befriending your competitors is solely fully of advantages.
33) You have to offer the lowest prices to beat competitors – Although good business practice is to maintain competitive pricing, never think that is the answer to beating out your competitors. Consumers aren’t looking for the cheapest product; they are looking for the best. Don’t sacrifice quality to make more sales. It will only hurt you in the end.
34) Build it and they will come – You might have an excellent idea, then produce it and expect, as it is SO great, that people will just be lining up to purchase it. But, customers have to know the product exists and know what it is about to even get in the line. Build the best distribution and marketing for the product if you want to attract customers to that line.
35) Sales are more important than the numbers – Don’t let sales be your only factor of success. It doesn’t make any sense! Why grow the sales of your company if you just keep losing money over a period of time. Your number one focus should be on cash flow, not sales. If there is less money at the beginning of the month than at the end than THAT’S what is important and should be your focus to fix.
36) Under promise and over deliver – There is a crazy idea in the business world that if you set customers’ expectations low, you will exceed them (and in the end, make them more satisfied). But, be cautious, if you set expectations too low, you will never have the opportunity to even attract the customer!
37) You don’t need a marketing plan or materials, your product/service sells itself – No matter if your product is the next iPhone, or your website the next Facebook, if you don’t have a marketing plan, you will fail. Marketing is an investment in your business. If done well, it pays for itself. However, no one will know about your product if you are not out there telling them about it.
38) Paying for marketing can’t help you – There’s a misconception out there that if you actually have to pay to market your business, there really is no help for what you’re selling. This is absolutely not true. Every industry has different distribution channels and for some products and services paid marketing is necessary. Don’t be weary of spending money on this necessary business builder.
39) Great marketing can sell a bad idea – Some people have the ability to be able to sell almost anything but they can never actually hide a bad idea. With time, a product’s true integrity will shine through.
40) Monetize everything – One sure-fire thing to hold you back from success is never doing anything without an immediate financial payback. Stop and think about this. If everything you do only says “I just want your money” then you’ll never build trust (which is what you need to survive in this economy). Building a customer-centric company is what it takes to survive in today’s transparent marketplace. Although this nurturing doesn’t have immediate monetary payback, with time it will be the best investment you could have made.
41) No such thing as bad press – Although publicity is good, in the world of small business you don’t have as many barriers to guard you in the midst of a crisis. Usually, if negative reviews get out there, your number of customers will drop. Bad press is lethal for small businesses. However, have no fear. If you find yourself in this situation, there is a solution: iterate. Take the negative feedback and utilize it to make your product and company better.
42) Be active on all social networks – Social media is an amazing thing for small business, be sure to take advantage. But, proceed with caution, as it can also be a royal waste of time. Only focus on tools where your customers are having conversations. Don’t bother trying to establish presence on a site where your target market does not go.
43) Social media has instant ROI – Social media can take a long time to develop. It takes time for your sites to establish an identity and bring in followers, and then with time, it will transform to what the community wants. Be patient with your social media, it will help you reap the full rewards.
Your Small Business Customers
44) Silence your unhappy customers – Believe it or not there are some businesses out there that think if their customer is unhappy, or if there is a problem, that it is better to push it under the rug than to address it and try to make the customer happy. Never leave a customer unheard or unsatisfied. If they are unhappy, do something that WILL make them happy. It’s a guaranteed way to boost your business.
45) Your customer is always right – This is a business statement that needs never be taken to heart. If your customer was always right, your company would never be profitable. It’s not about the customer being right, it’s about how you handle your customers: Do you listen to issues they are having? Can you empathize? Understand where they are coming from. Use their feedback to shape the path of your business but never let them entirely define it. Customers will all have different things to say. You have to learn how to add these together and use them to benefit YOUR company and YOUR business plan.
46) Your customers only care about low prices – Too many people focus on the actual price of their product, versus the value of the solution their product is creating for their customers. Although pricing is important to your customer, what you deliver is most important. Put your efforts on delivering the best quality and most effective product before the pricing.
47) You don’t need to extend net terms to your customers – A lot of businesses think that extending credit options to customers isn’t a necessary business step. However, net terms immensely help companies manage their cash flow. If your competitors are offering net terms, you are going to be in big trouble. Stay competitive by offering your customers the same flexibility.
48) Extending credit is too risky – Small business owners are also afraid of extending customers credit as they fear it is too risky. Providing a service or product before it is paid does cause for some stress. However, if you extend credit like a pro, you won’t need to worry about the risk.
49) All your customers deserve credit – At the same time, don’t get too at ease with the process. Part of being a smart creditor is understanding that not ALL customers deserve credit. Only extend options to those customers who can prove they are credit-worthy.
50) Your credit policy doesn’t need to be written – For some reason, there are small businesses that think credit is something that can be done casually. You deliver a product, and your customer (who happens to be your good friend) says they don’t have the money and will pay you back soon…and they never do. Don’t EVER hand out net terms without it being in writing. To properly manage late paying customers, you must be prepared to take action when they are not paying, and this can’t be done without the proper documentation.
51) It’ll ruin your relationship with the customer if you make them pay – Once small business owners have extended credit, and they find themselves in a situation where a customer hasn’t paid, they can be hesitant to pursue this delinquency. Whatever you do, don’t waver. It is your money and you DESERVE to be paid. You are not pushing your customer to do something wrong or outside of the scope. Approach the issue professionally and personally and you will keep your relationship intact.
Small Business Technology
52) You don’t need a website – It’s amazing to think that even though the internet has become the epicenter of our economy (and truthfully our world), some small businesses still haven’t embraced it. If they don’t jump on the wagon soon, they’ll be off the map entirely. A small business website is what defines you to customers you don’t even know you have. Don’t be afraid to seize the opportunity.
53) Websites costs thousands – This idea pretty much puts you in the Stone Age. Technology is so advanced that websites have become extremely affordable. Owning a domain is super cheap and there are many tools out there to help you create your own if you really want to cut costs. Don’t let money be the reason you miss out on one of the biggest necessities for your business to survive.
54) You can save money and have a friend design it – It’s always nice to keep those friends and family around who can help you with your website, your network, etc. (you know, those technology-minded people). But, if you want technology that’s aimed directly at specific goals like increasing revenue or attracting new customers, you need a technology advisor who’s not only a computer genius, but who also understands your business objectives.
55) Google is stupid – Some small business owners think that search engines and trying to rank well on them is a complete waste of time. This mentality can literally KILL your business (or at least keep you from reaching your full potential). Everybody googles everything nowadays. Can you imagine if, say you’re a dry cleaners in Lansing, Michigan, if every time someone googled “Dry Cleaners in Lansing, Michigan”, you’d be the first to pop up? This would increase your business dramatically. Don’t let yourself miss out on this opportunity.
56) Technology will put my customers at risk – It makes total sense that you are worried about what it means for security when you decide to embrace technology. You ask, “Can someone get my customer’s information?” This fear shouldn’t keep your company off the web. Just as you think technology might open up a risk, there is, thankfully, many solutions that exist to address this problem (firewalls on your business computers or virus protection software, for example).
57) You don’t have time to implement technology – What’s ironic about this statement is that technology is actually geared to help you SAVE time. Yes, different programs require some installation time, but it usually involves a few clicks of a button and it’s done. And if you need to do a heavy technology overhaul, putting forth the effort now will save you an immense amount of time in the future. There are even services out there that can help you during the actual set-up, so you don’t find yourself spending too much time doing so.
58) You can’t afford emerging technologies – Believe it or not, many technology solutions are actually free or extremely low cost. You’d be shocked what you can get for your business at unbelievable prices, not to mention, sometimes implementing certain technologies helps you save more in the long run. Don’t stray away from technology because of cost; instead embrace their cost-cutting (and efficiency-building) capabilities.
Small Business Finances
59) Lack of money is your biggest problem – It’s almost sad to think how many business owners judge their business’ success only off how much cash they have in the bank. Your biggest problem is not THAT you have a lack of money, it is WHY. Are sales lagging? If so, why? Are you customers not satisfied? Is your marketing plan failing? If your sales are just fine, are you failing to manage your money? Are you not properly evaluating your overhead? Are you monitoring your cash flow? You see, when you identify a problem, always ask yourself why it exists. Then, go about solving THAT.
60) You have to spend money to make money – Be cautious of this thought. If you think throwing money at a problem is going to fix it, it won’t. Spending money for your business involves spending it very carefully and really, truly evaluating each investment’s results. Too much money can keep you from being resourceful. Never use it as a crutch.
61) Your gross margins will grow as you get bigger – A lot of times as your company grows there are initial costs you are not quite prepared for (such as leasing equipment, for example). Your sales might increase, but your gross margins would decline as your having to spend more to support these services.
62) Lowering overhead costs is the only way to increase profits – Lowering overhead costs is certainly not the only way to increase profits, and it doesn’t have nearly the long-term performance ability as other options. Other examples? Raise prices. Look at ways to increase sales. Iterate your product to reach a larger market. Look at lowering overhead costs as a way to supplement an immediate need for cash, but never as a long-term solution to be more profitable.
63) Financial numbers can be outsourced – Don’t let your numbers leave the door. Your financial statements are your company’s score card. You have to know where you’ve been to know where you are going. Make sure you, yourself, reviews and understands your profits and losses, balance sheets and cash flow statementsevery month.
64) You can write off all your expenses – This is a huge stereotype associated with small business owners. The truth is that business expenses have a lot of rules tied to them, thanks a lot to the fact that people do try to write everything off. In fact, some things that are business expenses can’t even be claimed entirely (or only if particular circumstances apply). How do you know if you can write something off? Ask yourself the question: “Would I have paid for this without my business?” If the answer is yes, it is not tax-exempt.
65) You get all kinds of tax breaks for home-based business – People try to take even more breaks if their small business is actually a home-based business. As a home-based business, you are able to claim some expenses that non-home-based business can’t (such as cost of cleaning the home or the heating). However, you can only claim a portion of these expenses based on the actual business use. There is a business-use-of-home expense that may be claimed, but only by home-based businesses that qualify.
66) Avoid paying taxes by using contractors and freelancers only – This is a strategy that can clearly offer some pretty legit tax savings. However, this can get tricky. The employee has to be working a 1099 basis, but they can’t be showing up for work at a specific time at a specific location every day. Not to mention, are taxes more important than a corporate culture? Don’t miss out on the opportunity to create an awesome work environment for yourself by solely working with contractors.
67) It’s ok to pay your vendors late – Sometimes small business owners think it’s ok to be late on a payment. They don’t want to give up all their cash, they forget to make note of payment, etc. but you need to get it in your mind that it is DETRIMENTAL to not pay on time. When you pay your vendors late not only can it damage your relationship with them but it will also deeply hurt your credit. With bad credit, you’ll never be able to get the financing you want for your business, which can shut all kinds of doors.
68) You don’t need a separate business credit card – Some owners still operate their business on their personal card. Crazy? We know. You cannot do business on your personal card, no matter how many air miles it earns you! You need to keep your personal and your business finances separate, not to mention, you should be building your business credit. There are business credit cards that have excellent benefits, don’t deny yourself these either!
69) You don’t need a separate business bank account – In the same vein, small business owners are still operating out of their personal bank account. Not only can this put your personal assets on the line if your business is ever in financial trouble, but it keeps you from properly managing your finances and from building a strong credit profile so you can be more of a powerhouse when financing. Don’t limit yourself by being too lazy to separate the business from the personal.
Managing Your Small Business
70) Teamwork is about building consensus – Without a doubt, a great team really can lead to a successful company. But, don’t be confused. Collaboration is not the same thing as consensus (as said so well by Steve Jobs). As the leader, you must set the direction and your team needs to find a way to work together (effectively) and accomplish this objective. They don’t always have to agree. In fact, it’s their difference in opinions and the fusing of these ideas, that make for brilliance.
71) You really know your market – Although research can be valuable, it isn’t always all-inclusive. Follow the data you have found, but don’t be afraid to get creative and pursue other avenues. You’ll be shocked which parts of the market (that you hadn’t originally anticipated) will show interest.
72) One size fits all – As you introduce your business to customers, you are going to see that they are all going to want different things. You are going to have to learn to take in this feedback and what should be applied (and what shouldn’t). One size doesn’t fit all, but your goal is to create a product or service that will, in a way, operate to fit most. You have to approach dealing with customer feedback as about finding one right answer for multiple, unique people.
73) As CEO you know it all – Although this is your company and it’s small enough where you think you’d be kept entirely in the know, you aren’t. When you have employees that are customer-facing, vendor-facing, etc., they are going to acquire information that they might not always remember to pass on. Be sure to establish weekly meetings where this information can be shared, so as CEO you can keep tabs on all the information you want to know.
74) Working capital is not important – Business owners can be so wrapped up into making sales, keeping customers happy and managing their employees that they sometimes forget to focus on what fuels them. In business, CASH IS KING. You can’t accomplish any of the above things if you don’t have access to capital you can work with. Make sure you are always on top of your working capital.
75) Intern and temps are not right for small businesses – Many small businesses think, given that they are small, that they aren’t the ideal structure to bring in interns and temps. In reality, though, small businesses are the best for this! Not only can you save a lot of money by bringing in temps and interns, but you can foster these people more. Interns will get more of an education at a small business than a large because everything will naturally be more accessible and transparent. Don’t miss out on this excellent way to cost-effectively bring in more human capital.
76) Going green will cost too much – There is no need reminding you that going green is what our environment needs, but what’s interesting is that going green can actually cut major costs for your business. Having a smaller energy bill, less paper, less office supplies, etc. will only help you have major savings overtime. Yes, there will be a few up-front costs, but the money you will save over time (and how much you’ll be decreasing your carbon footprint) is more than worth it.
77) Environmental issues are for big businesses to solve – At the same time, you might be wrongly informed that your company is too small to make any real impact on the environment. This sort of thinking is actually what’s hurting us! It’s not just the big businesses who need to clean up their act. Small businesses setting an example will make a huge difference, and of course, as we mentioned, cut you major costs and speak to those customers who truly connect with the cause.
78) It’s ok to over order inventory – As a business owner, you like to be ahead of the game and be as cautious as possible. Therefore, some owners think its ok to over order inventory, you know, just in case sales shoot up for the month, etc. This is a practice you should stop. Over ordering inventory can be dangerous for your business. It ties up liquid cash, which you could be using to spend on paying back bills, loans or things that really affect your business financially. Also, if the inventory goes unused, it can become a loss. Thankfully, you can make projections based on previous months and years’ sales. Really put these numbers to work for you. Successful owners know how to accurately forecast.
79) Small businesses don’t need to manage their documents – Too small to manage your documents? FALSE. You naturally have more resource constraints as a small business owner therefore you are not going to have a lot of people on hand to deal with paperwork. Your employees have enough of their plate; don’t make them handle tasks they weren’t hired to do. Get a good document management system to keep your important details in line and your employee’s using their time in the most productive manner.
80) Good fences make good neighbors – Keeping yourself closed off from competitors and advice simply isn’t good practice. Transparency is a beautiful thing for a company. It allows customers to trust you and your product to be accessible. Be open to feedback and be open with your thoughts. The response you will get could be the difference between your business being good and your business being great.
81) Bigger is better – Major growth might seem like one of the ultimate successes as a business owner, but always know what you’re getting into before you try to expand. There are advantages to being small: intimate customer service, quick responsiveness, etc. These things might really set you apart from your competition. Growth definitely makes it hard to be a flexible company, even harder to remain customer focused. Growth is good but do it at a steady pace that allows you to maintain the values that are most important to your company.
82) Stick with a winning program – This makes sense, if something seems to be working, why change it? But, you know the marketplace changes daily, therefore your business has to learn how to react to the changes. Always be anticipating new developments. Make your winning program be one that knows how to take advantage of these changes.
Small Business Ideals
83) Success is making money – Money is every business’ favorite way to keep score. However if you make that your goal, your motivator, it’s never going to take you anywhere. Focus on building value, making sure you have awesome cash flow, and the financial rewards will follow.
84) Profits and principles don’t mix – Stereotype says that money turns good people into, well, bad people. Overcome this thought. Don’t be afraid of success because of this. You can use your success for good, remember that. Make lots of money and use it for good. But never prevent yourself from reaching your full potential because you are afraid of what the success will do to you.
85) You can live the lifestyle of your dreams – Well, now this is all dependent on what your dream lifestyle is. But don’t be fooled thinking small business ownership is about big bucks and lots of free time. It’s hard work, and your income fuels your business. Most small business owners don’t get in the biz to get rich, but don’t ever think business ownership is about luxury. It’s about getting your hands dirty, and putting your whole self into what you do.
86) You’ll have more time to do what you want – This makes us almost laugh out loud. A lot of people think being their own boss means more free time. Try the complete opposite! Time will be the one thing you lack! The issue is you can’t leave work at work because you are the work. You have more responsibility, wear more hats, and naturally will be more in demand because of this. Being an entrepreneur isn’t a job, it’s a lifestyle. Your work will always be with you. But, your passion and belief in your business will drive you through it.
87) You can spend more time with your family – In the same vein, a lot of business owners quit their corporate jobs in hopes of being more available to their families. This should come with a precaution: yes you will be able to duck away for your son’s afternoon football game, but you then, in return, will end up working late in the night to make up for that time. Your schedule might be more flexible, but as we said, the amount of hours you will need to accomplish what you need will only grow.
88) You can pay yourself whatever you want - Wait a sec… if you take a large amount of the money coming in, what will be used to pay your expenses? Not to mention, there’s a bit in the IRS code about “unreasonable compensation” (don’t want to get yourself in that sticky situation). You should be prepared not to take money out of your business for a year or two. Remember, it’s about cash flow, and you need to learn to gauge how much you’ll be spending for operations before you can start paying yourself.
89) You’ll be profitable after half a year because you’re a pro at what you do – Sadly, it’s fact that even if you are the ultimate expert at what you do, most new businesses don’t even see a profit for almost 2 to 3 years! There is more patience involved than you’d expect. Also, so many owners focus on their idea and not an actual sales plan. It takes a few years to figure this all out, no matter how good you are at what you do.
90) Overnight success is possible – You have to fail to succeed. That could pretty much be the small business mantra. You must come to realize that setbacks are a positive thing, as they help better define your business and lead you to the success you so desire. Be ok with taking small steps to get to your goal and prepare yourself for those moments when things don’t always go your way.
91) Do what you love and the money will follow- This is a saying you will hear thrown around a lot in life. Yes, you should do what you love but just because you have a passion for it doesn’t mean that you will automatically start profiting from it. Some things are ok to be left as hobbies. If you think you can make a profit off your hobbies, try keeping your day job and testing the waters first.
92) Entrepreneurs are risk-taking visionaries – The media chooses to focus on the stories that sell, where people risk it all to get what they want. And although there is definitely risk involved in being an entrepreneur, that fact is entrepreneurs are actually very good at avoiding risk (rather than loading it on themselves).
93) You can set your own schedule – Now, in the same school of thought with “I’ll have more time with family and to do what I want”, there is also the misconception that you will be in complete control of you schedule. Which, in a way you will, but as the face of the company, being the person who will deal most with clients, vendors, etc., you are going to be forming your schedule around others more than ever. Be prepared to be able to flexible and to put your priorities to the side in order to meet others’ needs.
94) There’s glory in it – The truth, despite being an incredibly rewarding experience, being a small business owner can be a pretty thankless job. There is no one above you to tell you how well you are doing, to reward you for all those little things you go above and beyond with. You really have to know how to motivate yourself and how to praise yourself. Keep keeping on, as it’s your customers who will reward you with the compliment of bringing you loyal business.
95) The best offense is a good defense - This thought is about as opposite you can get from entrepreneurial thinking. Focus on your strengths. Move and manage your business by focusing on achieving, performing, excelling and breaking barriers. Don’t make it about reacting to your competition or trying to formulate your plan based on defending your ideals.
96) You have to be born an entrepreneur – For whatever reason there is a school of thought that a true entrepreneur must be born that way. This is not true. I mean, come on, what does that even mean? Entrepreneurs are people who have a good idea, are passionate about it and work hard to achieve it. Creativity and a stellar work ethic is what they need, but these are traits people can also develop if they truly want something bad enough.
97) It’s about luck – When people see mega brands like Facebook or Apple, it’s easy to think that those business owners had a bit of luck along the way. But the truth is, those owners, and other successful owners, got where they were thanks to an incredible amount of labor and ingenuity. They did things others weren’t willing to do and broke barriers. It might be safe to say that luck is the last thing that will make you successful. Hard work and imagination is the secret to success.
98) You can get rich quick – To explore further, as you know you won’t profit early on, or most likely even break-even, don’t think that when you DO start profiting that you will get rich quick. When you start being profitable, you’ll have to loan back the money to those people who helped you get where you are. It’s still a marathon. Your wealth grows with time. Stress building a business that will remain profitable over a long period of time, with much sacrifice in the beginning. Being a business owner doesn’t guarantee you will be rich. So much depends on industry and market, it’s best to try to keep yourself from getting caught in this illusion.
99) It gets easier – If only this were true. Some small business owners think only the beginning is going to be hard, full of sacrifice and long hours. The truth is that is never gets easier. With each stage of your business there are different challenges, whether it is reacting to growth, a bad economy, etc. You will always work as hard as when you began. No fear, though, as your business is very much a part of who you are, and this part of throwing yourself into something may not be easier in the future, but it will be more natural.
100) The future is out of your control – With the talk of being prepared for new challenges that will arise, such as growth or a bad economy, business owners fear that the future is out of their control, that whatever happens…happens. But by building a business with a strong foundation, having the ability to read the market and your customers and to know how to iterate, you can prepare yourself for whatever the future holds. The joy of being a small business owner is that you really do have so much control over outcomes. Never lose sight of that power.
101) Play it safe – There is a lot of responsibility and risk that goes into managing your own business. Some say, play it safe, never put too much on the line. But what will you accomplish? Show no fear in trying something new. As said, you must fail to succeed. Safe shouldn’t be a word in your vocabulary. You are bringing something into this world that hasn’t been before. Take ownership and lastly, enjoy doing so.
101 is just the beginning. As a small business owner, what myths have you come across?
This article was originally published on Funding Gates. Funding Gates is the world’s first CRM platform for receivables management. Serving as an online credit department for small businesses, Funding Gates is set on making managing receivables the easiest part of running a business.