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Every thing is associated with a myth or a belief. That makes it worth more talking. Here are the top 15 Myths about entrepreneurship, I have heard from many people and places. Some of them are just hilarious while others are too good to be true.
So, we play a reality check on the biggest myths on entrepreneurship and let’s get started:
Myth #1: I should be Technical to start a Business
Many of the Entrepreneurs believe that if they aren’t technical, they shouldn’t start a business.
Myth #2: I must come up with a new/creative idea
While a new and/or creative idea will boost your business, you should not wait for it. Boost your creativity and try to come up with creative ideas for your business. That doesn’t mean it should be entirely new. Facebook wasn’t the first social network, Google wasn’t the first search engine. They are just the Best.
So, whatever you do, make sure it is the best one. It is not who is first that matters, but who is the best that matters the most.
Myth #3: I lack the financial resources to start
While a minimum amount of money is required to start a business, you need to work smart and be willing to do it. To start a business and cover all its aspects, you will need near to $25000 or less according to your business. Financial resources could be managed by making use of crowdfunding or as your family and friends for investment.
With the rise of crowdfunding sites like Kickstarter, it is easier than ever to raise money if you have a killer idea.
Myth #4: Money and fame will follow
Many entrepreneurs think that a killer idea will bring in all the fame and wealth they want. But it is a harsh reality, it doesn’t work that way. Money and fame come to those who have a lot of patience and persistence to see your business through its tough times and challenges.
If you are planning to get into Entrepreneurship for becoming famous and making money, leave it alone. Money and fame are a byproducts of the efforts of successful entrepreneurs, not their main goal.
Myth #5: Venture capitalists are a good source for money
Venture Capitalists are a good source of money for start-ups, no doubt, but not for everyone. VC’s usually prefer computer or biotech companies to invest their money. Don’t expect VC’s to lend you their money for your paper clip startup.
So unless you are not in their interest of field, forget getting venture capital for your business.
Myth #6: Banks don’t lend money to start-ups.
This is again another myth. The Federal Reserve data shows that banks account for sixteen percent of all the financing provided to companies that are two years old or younger. So, a strong business plan that clearly indicates your plans to grow and make money, will land you money from the banks.
So, have a strong business plan, plan on how you are going to make money, your worst scenario back-up plan and banks will lend you the money for your start-up.
Myth #7: I can escape debt with a startup
Many of the entrepreneurs make the wrong assumption of thinking that startups can’t be financed with debt. But in reality, debt is more common in startups than equity.
Again, according to the Federal Reserve’s Survey of Small Business Finances, 53% of the financing of companies that are 2 years old comes from debt and only 47% comes from equity. So a lot of entrepreneurs out there are using debt rather than equity to fund their companies.
Myth #8: Passion is more important than Money
Yes and No on this one. Passion is a must have for starting up a business. But money is also important to run a successful business. Money for both starting up and continue to make money from your business.
If you business does not have concrete plans on making money in this recession-hit world, your startup will die soon, even you are passionate like hell.
Myth #9: A lot of money equals success
Many entrepreneurs with lots of money and resources think that their money will lead them to glory. Absolutely ridiculous. Money matters, but money does not equal success. A lot of money will help in starting up but not growing big and getting customers.
If that money could be put to smart use, then the business will gain an amazing traction within a short time.
Myth #10: I will have freedom
Freedom from what? You won’t get freedom from anything starting a company. Think you will have the freedom from the 9 to 5? You will have to work 24 Hours on your business. You may even have to wake up in the middle of the night to answer customer queries. Your business life will takeover your personal life.
You will have to make a lot of personal and financial sacrifices to start a business. Be prepared for that.
Myth #11: Entrepreneurs are successful financially
You might want to check on that again. Most of the entrepreneurs are dipping in debt. Entrepreneurship creates a lot of unevenly distributed wealth. The average profit of an owner/founder in a business is around $39,000 per year! You can make more money than that just by getting a mere college degree.
Only the top 10% of the entrepreneurs make more money than their employees. And a typical entrepreneur earns less money than he otherwise would have earned working for someone else.
Myth #12: I will always be Happy
This mostly depends on you yourself. What makes you happy. If working more than 60 hours per week is your dream, than yes, you will be happy. If you want to work in strict timings, you better get a 9 to 5 job.
If you are ready to live your present life working harder than your fore-fathers, to expect a wonderful future, you will be happy. Happiness is a personal term and everyone has their own measure for it.
You decide this!
Myth #13: Startup life is fun
Startup life is definitely far from fun. It is fun working with your team on a project you love and you believe in. You will love the flexibility and making your own rules and terms. But is not far that you will hate startup life. Longer work hours, weakening close relationships, increasing bills, decreasing turnover, and sudden economic crisis and other unexpected issues.
Startup life is fun if you are ready for anything unexpected and deal with it properly.
Myth #14: I just want to be a Billionaire
Being a billionaire, or even a millionaire by taking the path of entrepreneurship is a tough ride. It is not impossible, but you need to have the guts, persistence and patience apart from a great team, great board and a perfect execution of your brilliant idea. Being at the right place, at the right time and taking the right action is also an add-on.
But less than a third of the entrepreneurs reach the millionaire mark, let alone being a billionaire.
Myth #15: Starting a business is easy
Actually it isn’t, and most people who begin the process of starting a company fail to get one up and running. It might be easy to start a company, but after seven years, only one-third of people have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months.
Out of the 590,000 new businesses with at least one employee founded every year, data from the U.S. Census shows that less than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for.
About 500 firms reach the $50 million in sales that the sophisticated angels, like the ones at Tech Coast Angels and the Band of Angels talk about.
In fact, only about 9,500 companies reach $5 million in sales in that amount of time.
So, here we come to an end to the Top 15 Myths about Entrepreneurship. We missed anything? Feel free to shoot below. Share this article with your entrepreneur and wannabe entrepreneur friends.