There are a number of misconceptions around what it takes to start a business. Working for yourself and running your own enterprise does provide for certain benefits and freedoms, but simultaneously comes with a number of responsibilities and potential liabilities.
Consider these myths about entrepreneurship:
1. I WON’T HAVE TO REPORT TO ANYONE.
Whomever you do business with becomes your boss. You are accountable to multiple bosses, also known as your clients or customers. Keeping them happy takes good organizational skills and constant communication.
TIP: The toughest employee to manage is you. Good habits and discipline are an entrepreneur’s friend.
2. I’LL BE ABLE TO DO WHATEVER I WANT AND WORK THE HOURS I WANT.
Most entrepreneurs do some of what they want … plus a lot of things they have never done before. You may be the president of your business, but you are also the secretary, accountant, salesperson, and janitor.
TIP: Schedule time off on your calendar, otherwise you will find it impossible to take time off when needed. Your time is valuable, use it to your best advantage. Delegate tasks when possible.
3. I WILL MAKE A LOT OF MONEY, PERHAPS BECOME WEALTHY.
It takes money to make money! If you don’t plan wisely to earn money, you won’t. Gross revenue is the total before deducting any business expenses. Net revenue is after expenses have been deducted, but before taxes. Pay attention to net revenue, not gross.
TIP: Hire a bookkeeper and/or a CPA to go over your figures quarterly and explain what they mean.
4. BUSINESS WILL COME TO ME.
Entrepreneurs must generate their own business. This is done through marketing. Whatever your specialty, you’ll have to sell, sell, sell. There is no substitute for meeting your prospective clients or customers in person.
TIP: When marketing your services, remember most people will tell you what they need within the first two or three minutes of a conversation. Listen to their needs, and then show them how your product or service can fill their needs.
5. I WILL NO LONGER HAVE TO DEAL WITH OFFICE POLITICS OR RED TAPE.
Every industry comes with its own politics and red tape. You must learn the requirements for yours and establish your own criteria for dealing with them.
TIP: Keep current on your industry’s political climate and your customers’ desires by visiting your local library, and reading trade and news publications.
6. AS A BUSINESS OWNER, I WILL ENJOY RECOGNITION AND SECURITY.
You will need to pat yourself on the back continually. It is often lonely being an entrepreneur. The first five years are particularly rigorous due to sporadic income and constant long work hours. You must have a great deal of personal and emotional stamina to motivate yourself and boost your self-esteem.
TIP: Each month, prepare a list of your accomplishments. Look over the lists whenever you feel discouraged.
7. MY SAVINGS, INHERITANCE, AND RETIREMENT FUNDS WILL SUPPORT MY BUSINESS. WHEN THEY RUN OUT, I’LL BORROW MONEY.
If not replenished, savings, inheritances, retirement funds, and the like will quickly be depleted. You need to make a profit and pay yourself, otherwise you will end up with nothing. No bank will look at a business with less than a two-year track record of increasing sales plus assets to use as collateral.
TIP: Write yourself a regular paycheck of increasing amounts each month on the same day. You may have to hold it until the cash is in the bank, but it will keep you aware that you are not working for free. Get to know your banker. These relationships take time to build. Keep them informed of your progress by sending brochures, newsletters, and copies of press you have received.
8. I WILL HIRE MY FRIENDS; I CAN TRUST THEM.
Friends are often the worst employees because it’s almost impossible to be objective about their work performance. This makes it difficult for you to manage them and difficult to get rid of them if they are not productive.
TIP: If you must hire a friend, follow the same process you would when hiring a stranger. Make sure they are qualified for the job. Have an objective party interview your friend. Write a job description and use employment contracts to eliminate misunderstandings about duties and compensation.
9. I DON’T NEED HELP. I AM A TALENTED PERSON WITH A PROVEN TRACK RECORD; THEREFORE, I WILL BE SUCCESSFUL.
You will need all the help you can get. Surround yourself with the best resources to advise you on business, marketing, legal, accounting, and financial planning matters. Good advice is meant to give you a return on your investment. Listen with an open mind and put your ego in your back pocket.
TIP: Benefit from continuing education courses at local colleges and universities. Become familiar with small business development centers, small business institutes, the Service Corps of Retired Executives, and other counseling and assistance services through your local small business administration office. Brainstorm with other business owners.
10. ANYONE CAN BE AN ENTREPRENEUR.
Being an entrepreneur is challenging and offers the potential for great personal fulfillment. You have the freedom to choose your own environment and develop the kind of business you want. Entrepreneurship requires long hours, hard work, and heavy responsibility.
TIP: The American dream of being an entrepreneur is not for everyone. If you have the spirit, why not take the risk? Even if you fail, it is better to have made the effort with clear vision, thorough planning, and action, than never to have tried at all.
This information was provided to you by MBA Highway. We hope you have found it useful to launching your own venture.