Starting a business? You are ready to hit the floor running. You’ve brainstormed your business idea, spoken to friends and family about your plans and are ready to leave your full-time job to work for yourself and realise your dreams. So, having read numerous books, blogs and articles on entrepreneurship, you are standing on the ledge about to plunge into the unknown.
Wait! Just a few seconds. Familiarise yourself with some misconceptions about starting and successfully running your own business.
Demystifying the Myths and Misconceptions of Starting a Business
Starting a Business ― Misconception 1: You Need to be Niche
You have to reinvent the wheel. You have to be another Facebook, Apple or Uber. You have to bring an incredible, never-before-seen differentiation point, product or service to the market that will outwit and outsmart your competitors all of the time. No! You don’t.
The sad reality is that a ‘niche’ does not guarantee success and won’t save your business from failure. Your business should be built if you have a valuable product or service at a reasonable price that potential customers want to buy. Period! Don’t reinvent the wheel.
Some of the most successful businesses have a similar product/service to their competitors. However, they do things a little bit better, offer a little more, and satisfy a few more customers. Read more about Customer Analysis and Competitor Analysis in our previous articles that deal with the concept of Market Analysis.
Starting a Business ― Misconception 2: You Need to have Unlimited Confidence
Should you enjoy being at the centre of attention? Should you be an extrovert or a social butterfly? Should you like speaking in front of people? The answer is no to all these questions. It’s natural to doubt yourself when promoting your business, new products or services or selling yourself as an expert. However, starting a new business is about getting out there and doing it anyway, even if the fear, worry, and doubts outweigh your confidence.
Starting a Business ― Misconception 3: You Will Become an Instant Success
Unfortunately, many prospective young entrepreneurs think they will become overnight successes. But I’ve got news for you! Some of these young entrepreneurs are only inspired to start their own businesses by witnessing individuals that are currently successful.
They look at business owners standing in front of a new vehicle, wearing fancy clothes and thinking this means success! But unfortunately, they study the success story instead of the origin of that success story, which often includes massive struggle, long hours, tears, anger and a roller coaster of emotions before the breakthrough. It takes at least 7 to 10 years to become an overnight success (tongue in cheek). Read more about Business Failure and the Emotional Costs of Starting a New Business in our articles entitled Faced with Business Failure? 5 Key Reflections and Starting a New Business ― 3 Ugly Emotional Costs.
Starting a Business ― Misconception 4: You Make Your Own Hours
No, you don’t! If that is your point of view, stay in your 9 to 5 job. Of course, your boss makes the hours, but at least you know what hours you are expected to work. I’ve lost count of the number of times people have told me how great it must be for me to run my own business because, as the owner, I get to make my own hours.
They don’t realise that since it is “my own business”, it’s incredibly difficult ever to turn it off – something I worked on in the first two years after founding JTB Consulting. During the first two years of starting my own business, I worked, on average, 18 hours a day, seven days a week. So, get ready to answer emails at 1 am, meet clients at 6 am, field a Zoom call at 7 pm or take a call from a prospective client during a rugby game at 5 pm on a Saturday.
Starting a Business ― Misconception 5: You are Rich, Sexy, Unstoppable and Taking Over the World
Entrepreneurship is not sexy! Entrepreneurs don’t get rich instantly, nor are they unstoppable. And most certainly, they don’t take over the world. In starting your own business, you will meet a client, make your coffee, do all the administrative work and knock on doors for business. Wearing all the caps and transforming yourself by taking on various roles is part and parcel of the challenge.
In most cases, you won’t be able to pay yourself for years. So if you want a guaranteed salary, stick to your day job! Don’t focus on taking over the world – rather, on improving the industry bit by bit or making a small mark in the lives of a few people (customers).
Starting a New Business ― Misconception 6: Starting a Business comes with Complete Freedom.
The biggest lie is that running your own company allows you to set your hours and gives you total freedom. If you want to start your own business for freedom, think again. The freedom of starting a new business is the opportunity to implement your business idea and the joy of watching your business take shape and solve real problems people have with time.
Of course, you have the freedom to change direction as you deem fit, but most of your time will be taken up by meetings, appointments, events and everything else required to run a new business successfully.
Starting a New Business ― Misconception 7: You Need Lots of Money to Get Started
In the current age of an abundance of free business resources, you can start a business with little or no money. You don’t need the help of an investor. There are hundreds of free resources, tips and blog posts about bootstrapping your business that you can access. Funding, in any case, is no guarantee for success.
Starting a New Business ― Misconception 8: You will Attract Lots of Customers from Day 1
No, you won’t. Most startups I work with only make their first sales after six months of starting the business. Plan for the worse but expect the very best. Most businesses fail because they’ve made plans based on exponential growth right from the beginning. You shouldn’t expect customers to flock to your business, even if you think you have the greatest idea in the world. Never stop marketing and make sure you have enough money to continue marketing, just in case some customers find it difficult to find you.
To Start Your Own Business ― Partnership or Solopreneur?
Let’s be honest; business partners, like parents and spouses, are rarely perfect and come with their challenges. Deciding on whether to take on a business partner is a very important decision that you might have to make. If you choose that this is the way to go in taking on a partner, the first thing to remember is not to choose a partner who is exactly like you.
A truly effective partner is someone with abilities and skills that complement your own and can expand what you can do as a team. Also, ask yourself the following questions:
- What do you need and expect from a Business Partner?
- What is your potential partner’s financial situation?
- Is the potential partner’s commitment to the business as strong as yours?
- Is there something in your potential partner’s family life that might make the business a secondary interest?
- How do they react in difficult situations?
- What is the potential partner’s standing in the community?
- Are they willing to put everything in writing?
To Start Your Own Business ― Planning for Roadblocks on your Path to Success
To plan for success, you must first realise and identify the potential roadblocks you may face. For example, a study by the World Bank has found that the vast majority of small enterprises in South Africa report that difficulties gaining access to credit represent a major constraint to new investment, a key determinant of growth in SMEs.
In this respect, the conditions set by most financial institutions to acquire credit/loans disqualify most applicants from getting needed finances. These limitations disproportionately affect small businesses, given their scarce financial and human resources. In my discussions with prospective entrepreneurs, I have identified the key factors these individuals feel are their greatest barriers to starting a small business in South Africa:
- Insecurity in whether the product or service will work and if there is a market for the product and service.
- Lack of enough startup capital and time to work on the business idea, especially if the prospective entrepreneur is employed full-time.
- Lack of business management skills, financial literacy and technical competence.
- Leaving a full-time job and the associated loss of benefits (e.g. medical aid, pension fund, fuel allowance, etc.) and trading a guaranteed monthly salary for possible no salary during the initial startup phase of the business.
- Inadequate knowledge of and experience in the intended business venture or industry coupled with ignorance of the challenges and risks associated with starting and managing a small business.
- Lack of support from family and friends and pressure from parents and family members telling you, “You can’t achieve your dreams” and “You need a full-time, permanent job”. Additional (negative) pressure from social groups further underpins the fear of failure and being rather content with the status quo.
- The administrative (non-sales generating) function and paperwork associated with starting a new business. Evidence from dealing with prospective entrepreneurs is that adequate bookkeeping is one of the most important functions they do not focus on. Further investigation shows this is primarily due to a lack of financial management skills.
- Starting a new business is a lonely experience. Going at it alone isolates you. This is a concern to most prospective entrepreneurs, especially if they plan to start a new business from home. Unfortunately, most prospective entrepreneurs do not have access to a mentor that can empathise with the emotional and physical reality of starting and managing a small business.
These fundamental factors ultimately influence an entrepreneur’s performance when faced with obstacles and challenges and could prove to be their biggest or most difficult challenge. That said, at least you can now plan for these potential obstacles and not be caught off guard when they occur. And yes, they will occur!
To Start Your Own Business ― Failing is not Failure.
Entrepreneurs fail constantly and daily! That’s right. You could say it’s a never-ending trend. Entrepreneurs keep losing, whether poor, middle class, millionaires or even billionaires. That’s the real state of entrepreneurship. If you want to go into business for yourself, get ready to feel failure and pressure about 90% of the time. With this said, take cognisance of the following when failure presents itself to you:
- It’s unavoidable. The best people and businesses in the world fail, and that’s why they become great at what they do. But, on the other hand, if we succeeded at everything all of the time, we wouldn’t learn anything, and without learning, we would never progress forward.
- It’s not the end of the world. Sometimes we get caught up in fear of failure, making rash decisions and even more mistakes. Every time I fail at something, I get out to the gym to punch a boxing bag and switch off everyone and everything for an hour. This hour allows my brain time to digest the situation and calm down. You can see things more clearly if you are calm.
- Write it down. I have a notebook in my car, on my desk, and besides my bed. I use it to pencil in ideas, things to do and my failures. Reading through the list allows me to replay the situation and reason for failure in my head with one goal: to learn from the mistakes I made.
- Doubt is the ugly cousin of denial. Know that everybody fails. Most people I know will never admit it because society would let us believe it is a sign of weakness. When I failed at something when I was younger (and even as I got older), I started to doubt my ability, talents and environment. It is only after years of being on a path of constant learning that I realised there is nothing that you can fail at that somebody hasn’t failed at before. Denying failure is a failure in itself. Learning from failure is the first step in the right direction. Brace yourself – failure is a part of life. Accept it and learn from it.
- Don’t make it personal. Separate the failure from your personal identity. Just because you haven’t found a successful way of doing something doesn’t mean you are a failure. Personalising failure can damage your self-confidence and self-esteem. Don’t allow it – what’s more, decide who to listen to and who to avoid. Not everyone is out there with your best interests at heart. Try and suspend feelings of anger, frustration, regret or blame. And most importantly – don’t dwell on it, and never, never, NEVER give up!
A Little Bit Extra ― What are your Reasons for Starting a New Business?
Starting your own business is probably one of the most difficult decisions ever. There are so many unknown factors to consider, most of which you won’t even think of during the early stages of your decision-making process. A key component to your decision is establishing whether you have the characteristics and “heart” to start and successfully run your own business.
Entrepreneurship can be defined as the “use of personal initiative, through engaging in calculated risk-taking, to create a new business venture by raising resources to apply innovative new ideas that solve problems, meet challenges, or satisfy a need of a clearly defined market.”
Determining the meaning of the concept “entrepreneur” takes us back 400 years to the 17th century when entrepreneur meant “flag-bearer”. This unfortunate soldier was responsible for carrying the flag at the forefront of a battle. He was singled out by standing in front of his army and had the highest possibility of being killed.
In today’s terms, being “killed” takes a different meaning. As a new entrepreneur, you bear the flag of your new venture, out into the battlefield of potential customers and competitors, hoping you won’t be “killed”. Being “killed” in this context refers to a business that fails. Planning, preparation and in-depth research are the first steps you must follow. But how do you plan? What do you plan for? How do you prepare yourself? What do you need to look out for? How do you conduct market research?
These are some of the daunting questions, enough to make you think twice if whether starting your own business is such a good idea. But, there are many critical questions you need to ask on your path to becoming an entrepreneur. Being an entrepreneur is not just a job. You are in the wrong place if you want a Monday to Friday, 9 to 4 job. Failure, in most instances, is inevitable. It is anticipating the causes of failure and successfully planning for it that will increase the possibility of success.
So, you have an idea but before you go any further, consider the following reasons why you want to become an entrepreneur:
To Start Your Own Business ― Freedom
If freedom is at the top of your list, you should probably not become an entrepreneur. Although it can be a long-term goal, it will certainly not materialise during the startup phase of your business, i.e. the first 4 to 5 years. You are sadly mistaken if you think starting your business will be without stress or pressure, allowing you to do what you want when you want it. You may think just because you’re not working for a boss anymore; you will experience a carefree life as an entrepreneur. Unfortunately, that’s not the case. You will, in all probability, find that you will have more pressure than if you worked for someone else.
To Start Your Own Business ― Money
If money is at the top of your list, you should probably not become an entrepreneur. Less than 8% of successful entrepreneurs start businesses to earn more money. Most failed businesses are a result of greedily focusing on money rather than customer service. Now, I’m not saying that money shouldn’t be a priority. But it shouldn’t be the most important reason. Money is only the reward for what you put into your business. The more you put in, the more money you will make.
To Start Your Own Business ― Security
If security is at the top of your list, you should probably not become an entrepreneur. Being employed by a company provides some form of security. Choosing to start your own business and to become an entrepreneur is a risky decision which will never provide you with security. That being said, you can take the necessary steps to ensure that this “risky” decision is based on a calculated decision, considering all potential risks. Make no mistake – starting your business does involve a degree of risk – that is a fact. In South Africa, approximately 80% of all new businesses fail within the first five years of opening their doors. So, the odds are against you.
To Start Your Own Business ― Advancement, Challenge, Contribution, and Opportunity
If any of these factors are at the top of your list, you should become an entrepreneur. Very few jobs will offer the level of challenge and opportunity for advancement you will experience as a business owner. Remember, whichever of these factors you value most is only an attitude towards being an entrepreneur. It’s never too late to change your focus and reason(s) for becoming an entrepreneur. To be an entrepreneur and a successful one, you must focus on serving people. Your contribution should be to serve your customers to the best of your ability.