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Top 7 Myths About Starting a Business

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From our experience consulting to entrepreneurs, start-ups, and small businesses over the past ten years, we've gained much exposure to the realities of starting and growing businesses.  We thought it would be interesting -- and hopefully instructive -- to lay out some of the myths and assumptions of aspiring entrepreneurs.

7. It Is All Dependent on Hard Work. Hard work is an absolutely necessary, but not sufficient, condition for starting and growing a business. It is the given, but without a solid business plan and compelling value proposition for customers and partners, all of the hard work in the world will be for naught. The world is filled with over-worked, over-stressed, and not terrible successful small business people who struggle not because of lack of appropriate effort, but rather for lack of appropriate planning.

6. If Your Product or Service is Compelling Enough, Customers Will Beat a Path to your Door. Unless you are building a business based upon intellectual property and/or technology that provides and creates such a competitive advantage and compelling customer value proposition, the early success of your business will be based as much on your ability to market and sell your product and service as it will on the product or service offering itself. Remember: in a capitalistic marketplace there is NO distinction between value and perceived value.

5. If Your Product or Service is Compelling Enough, Investors Will Beat a Path to your Door. Those that identify themselves as prospective investors in earlier-stage, small companies are mostly INUNDATED with investment opportunities. As such, no matter how good and unique your business opportunity, there is always a strong, initial prejudice AGAINST investment that needs to be overcome.

4. It Is All About You. The myth of the charismatic, "do and be everything" entrepreneur is just that -- a myth. Any and all companies of value are great teams much more than they are the by-product of a highly talented individual. The best entrepreneurs and business leaders inspire the mission, values and philosophy of a company by their own example. This inspiration is then communicated to all of the business' stakeholders -- employees, customers, investors, partners, vendors, and its wider community.

3. The Government Is Your Friend. We are constantly astounded by the regulatory and paperwork maze that a startup company needs to negotiate and constantly monitor to both start and maintain a business. It is a significant time, money, and energy drain that detracts from the main value creation intent of a new business. Our best advice in this regard -- as resources are available -- is to find competent legal and accounting counsel, to both advise upon and outsource the regulatory burden, so you can focus on business-building.

2. The Government Is Your Enemy. Having said the above, in the mixed economy in which we live, government revenue opportunities, on a local, state, federal, and international level, have never been greater for small business. While slow, meandering, and confusing to approach, governments have much to recommend them as clients and customers, not the least of which is that once sold, government clients pay well and are not bad debt risks. A somewhat trite but very important credo to remember when selling to governments, even more so than in business, is that "it is not as much what you know but who you know."

1. It Is Only Worth Doing If You Become the Next Google. The vast majority of small businesses will always remain just that -- small businesses. The odds of starting a business and have it become the next Google or a publicly-traded company are very, very small. While we would never discourage entrepreneurs for aiming for the stars, it is also important to have success metrics grounded in probability. An expectation of a minimum of 2years of very, very hard work with little financial return but with a lot of learning (and some fun hopefully as well) involved is a good starting point. From this first milestone, then and only then should there start to be an expectation of significant wealth-building. Find that balance between the long term vision and the Monday morning action plan -- and success, while not guaranteed, is very likely.

 

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About Growthink

Since 1999, Growthink's business plan experts have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $1 billion in growth financing.

Need help with your business plan? 

 


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Charis Theocharous says

All these is good advice, however i want to stress out the importance of one single factor: PLANNING. While each and all aspects of a business are very important, planning is crucial. Make a plan, even a very simple one, but do one. Even a bad plan, is better than no plan. And have simple tasks in mind - how many customers i am going to approach this week for example. AND STICK TO YOUR PLAN.
Posted at 4:01 am
The Masked Millionaire says

Poor planning is the number one reason people fail. Not only is poor planning the top reason for business failure but it is also the number one reason that people fail at every and anything. The second reason that most people fail at starting a small business is that they don't have enough capital. And I'm not talking about "LARGE LETTERS". You must have at a minimum 6 months (better one year) of working capital in the bank. If you do not have the money in the bank then don't waste your time starting any type of business. Last, it is very important that you realize that when starting a business that it must become your obsession. That means that going out to the clubs on the weekend is a thing of the past. Going on vacation is history for now. The only thing that should be on your mind and taking up your time is the new business. If you are not willing to give everything else up you will fail. Let me repeat that so you realize that it is important. IF YOU ARE NOT WILLING TO GIVE EVERYTHING ELSE UP YOU WILL FAIL.
Posted at 8:39 am
Mike says

I work for the pip group of companies managing a small team. Deliver what you promise and more.
Posted at 1:17 pm
Buy and Sell Philippines says

Become the next google! I like this one. Stop dreaming. Set your business goals into reality. Many businesses starts with a dream and then just dream on. They get lost on that dream and blame their dreams for those failures that they experience. Dreaming has always been the starting step of every success. Put hard work on it!
Posted at 11:09 am
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miyoko4869 says

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KingSquid says

This can become a good opportunity to all the people that want to start the new career in their life. I mean bout the new career in the music industry. Who know that you will success in this thing, right? Portable Shelters
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snowB3ar says

Business oftenly seems as an easy and simple thing. But actually, it doesn't easy at all. There are a lot of things you need to consider before you decide to run a business. Long Island Sprinkler Repair
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LisaHayne says

This is a good tips for beginner! I also a beginner in business, this is a good knowledge about business world. I have to bookmark this page. LI Web Design
Posted at 3:05 am
Roxy Cross says

Myths is a thing that between, it's up to us believe it or not? Me myself half believe about that, because we can't igonre myths but we can depend on it too much either. Sydney accountants
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ScottSinclair says

I want to share my piece of thought in this website, but I do not speak with the language. I learned some simplified chinesse six years ago in college but I think the language of this website is mandarin. exterior design company, interior architects
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payday loans says

It seems to me that the problem is the adapter not the outlet. The adapter you have is more for electronics like computers, printers, answering machines etc. and it has electronics in it that can wear out and start to fail under heavy loads. Outlets don't have any electronic or moving parts so when they fail it means meltdown or fire.
Posted at 6:28 am
Julz says

Wow, that’s a really clveer way of thinking about it!
Posted at 7:06 pm

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