While most entrepreneurs are great at what they do, they very rarely start out as experts in running a business. So, when starting out in your business it’s a smart idea to seek advice from people who know what they’re talking about, and know the world of business ownership that you live in.It’s interesting (and perhaps daunting) to know that half of all new businesses fail within their first five years. But don’t be put off - with the right strategies and advice, your business can be in the half that succeeds and lasts the distance.
So, what advice do you listen to (or ignore) as you look to make your mark? There are plenty of popular startup ‘myths’ out there that shouldn’t be accepted as gospel - they need to be busted!
In this post, we deconstruct and debunk some of the most common myths and misconceptions about entrepreneurship that could shape the success or failure of a startup.
Myth 1 - All you need is a great idea and determination
The biggest myth about starting a business is that it’s all about inspiration. The reality is that it’s really about staying liquid – by maintaining cashflow. Many hard-working and inspired entrepreneurs have been forced to close their business because they could not meet payroll or pay their taxes. Rather than feeling you have to match Richard Branson’s level of determination, simply focus on building revenue and cash reserves.
Myth 2 - You need heaps of money
Although having money is always a help, having loads of money isn’t a guarantee of success. No matter how much or how little you start with, the secret of success is building the business to a sustainable level before you deplete your startup funds.
Myth 3 - You have to work 24/7
You don’t need to work every minute of every day. You need some down time - the last thing you need is to burn out. The smart thing to do is to delegate or outsource enough tasks so that you can work a manageable schedule.
Myth 4 - You have to know how to do it all
This isn’t the case – you need a team to share the load, who complement your strengths and bolster your weaknesses. That way you can do what you do best: selling your products or services.
Myth 5 - Your product will sell itself
Many entrepreneurs believe a great product sells itself. Unfortunately, this is not always the case - selling is a process, and you must have a robust set of marketing and strategies and processes. As alluded to in Myth 1, make selling activities (raising cashflow) your top priority.
Myth 6 - You’re smart, so you shouldn’t need help from experts
Learning the nuances of financial accounting may be something you can do, but it takes a lot of time and energy that you could be spending building your business. It’s better to concentrate on tasks that lead quickest to new revenue, such as contacting customers and bidding on work. Let a trusted expert help with tasks that are slowing you down (read more about this idea in Tip #6 of our eBook "10 tips for busy business owners").
Myth 7 - You have to hire staff
Staff are expensive, whether measured by money or management time, they’re generally the business’s biggest expense. So, instead of hiring permanent staff, outsourcing can often be a more affordable and less risky option.
Myth 8 - You need a full business plan
Don't worry, you don't need a plan the size of the Yellow Pages. A simple three-page plan can work fine for a start. It’s a great idea to include your mission, vision, marketing tasks, and some tools for measuring success, but then get out there and start that startup!
Myth 9 - Being an entrepreneur is easy
Unfortunately starting up isn’t as easy as it might look. Behind most successful business people is the story of long hard effort. Max Levchin, co-found and ex-CEO of PayPal, launched four business concepts that failed before he developed PayPal. Be prepared to put in the work to reap the rewards.
Myth 10 - There's a 'right time' to start
No way! The best time is now, and the fact that you’re here, reading this post and looking for insight and advice is a positive indicator of your future success.
As a RightWay team member, seeing New Zealand startups succeed and grow is one of the real perks of the job. We’ve seen that getting the right advice from the outset is a key difference between a startup that succeeds and one that doesn’t last the distance. We’re here to help your business to be one of the success stories, with sound advice, and a guiding hand when you need it.