There are a lot of myths surrounding business, especially when it comes to starting a small business. These myths can negatively affect your mindset and interfere with your ability to succeed as an entrepreneur. Here are some of the most common business myths and why you should stop believing them:
Myth #1: I Don’t Need a Written Business Plan.
You may have an idea in mind that seems great in concept. When you put it down on paper, however, it may portray a very different picture. If you want to start a small business, you need to create a detailed business plan that lays out your target market, organization, funding, and anticipated revenue flow. A written business plan is also mandatory if you want to seek a business loan or help from the SBA.
Myth #2: I Can Get a Loan with No Money Down.
A lending institution will require you to have some of your own capital in order to approve you for a loan. 25 percent is the norm, though the percentage can vary. When you have your own personal investment in your business, you will naturally take greater care with the finances and be more motivated to succeed. This leads to lower default rates on business loans. Additionally, lenders will require liquefiable collateral for a loan and a cash flow projection showing how you plan to repay the loan.
Myth #3: I Will Draw a Salary from a New Business Right Away.
Don’t expect to immediately earn a salary from a new business. All new businesses require time to become successful. Additionally, invoices due to you may not be paid for 60 or more days, which means you need to be prepared to operate with limited cash flow. The last person to be paid is typically the owner, as employees always come first. This means you may want to wait before quitting your day job.
Myth #4: It’s Easy to Do My Own Bookkeeping and Payroll.
Just because you can do math does not mean you’re ready to take on your own bookkeeping and payroll. Even small businesses require precise and lawful bookkeeping. When you have employees, this becomes even more complicated. For your employees and your business, you need to withhold and pay federal income taxes, Social Security, and Medicare payments. You also need to file business tax returns and issue tax documents to your shareholders. Additionally, you may need to withhold and match benefit plan costs, such as healthcare, dental, 401(k), and others.
Myth #5: I Need to Purchase a Building to House My Business.
A common misconception is that you need to buy a building when you start a new business. Excessive fixed overhead costs are among the first things that will doom a business. The last thing your small business needs is a heavy overhead burden that will drive up your costs and lower your profits. If you absolutely need a building for production, office, or commercial space, you need to find the best lease terms possible for the shortest duration.
Myth #6: I Need to Be a Certain Way to Succeed in Business.
You may have an idea of what a successful business person should look like or how they should act. This pressure to fit a specific set of characteristics or behaviors can lead to internal conflict and a sense of inauthenticity among business professionals. However, there is no one-size-fits-all approach to entrepreneurship. Diversity of thought, expression, and innovation is very important for success in the business world.
Myth #7: Starting a Business Is More Risk Than It’s Worth.
Many people think that starting a business is a risky endeavor and therefore may avoid it entirely. There are risks to starting a new business, and it’s definitely not for everyone. However, there are also plenty of benefits of entrepreneurship. These include personal benefits to you as a small business owner as well as benefits for the local economy and even the planet. It’s important to weigh the pros and cons and decide for yourself if the rewards are worth the risk.
Are you ready to become a successful business owner? With Keith J. Cunningham’s 4-Day MBA, you can learn the critical skills needed to successfully launch, grow, and ignite your business. Learn more about the 4-Day MBA and take the first step toward business success today!
