Business start up myths and realities
Throughout my career I’ve helped a good number of clients who think they want to go into business, help them get started, and some of them I’ve actually talked out of it. Not because they’re not great people, not because they didn’t maybe have the money, but because there’s a lot more to starting a business, and maybe you might think there is. So for the next few weeks on every Tuesday I’m going to be uploading a video to ThePracticalLeader.com’s YouTube channel, which has to do with starting up businesses. It’s called So You Think You Want to Start a Business. In this video today we’re going to talk about business startup myths and realities.
Myth number one. All I need is a good idea to be a successful entrepreneur. Truthfully you do need a good idea to be a successful entrepreneur. But it’s not all you need to be a successful entrepreneur. Actually in the video I’m going to upload next Tuesday, week from today, I will be talking about how to qualify that idea, to see if it’s good enough for you to risk your time and your money on starting up a business. The myth is that all I need is a good idea to be a successful entrepreneur, the reality of that is a good idea is a great start, but it takes hard work, research and planning, plus successful implementation strategies to turn your idea into a profitable enterprise. An idea is a light in the dark, but there’s a whole lot more to starting and running a successful business than that.
Now to illustrate this good idea thing there’s a picture here of a Ford Edsel. It came out about 1958 I think, some of you will remember, most of you probably will not. And if you are aficionados of classic cars everybody knows an Edsel. Interestingly there is no record of an Edsel ever having been stolen, that tells you how bad of an idea it was. This car was well researched, they spent millions of dollars, the Ford Motor Company did, on researching this car, and they thought there was a market for it. The problem was it just wasn’t. It was a bomb from the beginning. It was a great idea but it just was not an idea that the public was interested in. Ford thought it was a great idea, the designers and engineers at Ford thought it was a great idea. The public had a different opinion of it.
Myth number two. If you go out on your own you won’t have to work so hard, or such long hours. I hear that a lot, particularly from people who’ve never run a business and they’re working in a shop, or they’re working on the sales floor, or they’re working in one of the cubicles around an office somewhere. They get the idea that the boss just sort of sits around and hangs out and does whatever he or she wants to do. So they think well I’m just going to go on my own so I don’t have to work so hard, because look at him he doesn’t work hard and look at her she doesn’t work hard and she doesn’t have to work such long hours. But the reality is very, very much different than that. You’ll probably work harder and longer than you’ve ever worked before, but you’ll enjoy it more, because it is your business. You’re not working for somebody else. And exhaustion will fade at the moment you probably say I did this, that is when you have a successful business that starts to pay the bills and put a little money in your pocket.
Myth number three. You’ll be able to deduct everything so you don’t have to pay taxes. That’s a really common idea that you can deduct everything. The truth is you can’t deduct everything, but you can deduct all lot of things. Taxes that you have to pay are based on net income, but there are strict regulations that have to be observed on exactly what can be deducted and what is not a deductible expense. You’ll need a good accountant to help you sort through all of that.
Myth number four. You won’t have to report to a boss. Well, true. You don’t have to report to a boss. But that doesn’t mean there’s no one to report to. In fact, when you run your own business you don’t have a single boss, you have many bosses. You have your customers, primary boss. You have to report to them, produce a quality product and produce quality service delivered on time on budget. You have to be reputable. You have to report to a Board of Directors if you have one or business partners if you have one or investors if you have them. You have to report to, perhaps, banks that you may have borrowed money from. You have to report to federal governments in terms of licensing state governments in terms of licensing and building codes and the like you have to report to. You got a lot of bosses that you have to deal with in order to have a successful business.
Myth number five. Business owners get to do the work they want to do and only what they find interesting. Well, maybe, maybe eventually, but not early on. The reality is you’re going to wear a lot of hats. You’re going to juggle a lot of things in order to make a business work. Because you’re in charge of not just one thing, you’re in charge of everything. And so think again if you think you get to do only the work you want to do. You’ve got to be in charge of everything.
Myth number six. I am a skilled fill in the blank so I can be a successful business owner. Some of you know I used to run a millwork company, in which we made doors and windows and furniture and molding and the like. I ran into a good number of really, really, really good skilled, highly skilled woodworkers. They were craftsmen. They had no clue about what it took to run a business. One guy I had let go for some other reasons went out on his own to start his own business and I dropped in to see him several months later, to see how he was doing, I liked him. He said I didn’t realize that if he didn’t bill out enough hours during the week he didn’t get paid. He didn’t realize everything he had to do owning a business.
Exactly. And so this brief introductory series of videos is here to help you understand that there’s a whole lot more going on. You may be skilled as an artist and as a craftsman, as a consultant, as a speaker, as a salesperson, as a mechanic, as a carpenter, there’s a whole lot more than that for running a successful business. You’ve got to do a lot of things. You’ve got to manage, you’ve got to do accounting, you’ve got to do marketing, you’ve got to hire, fire, train and deploy employees. There’s a lot to be done. Not that millions of people haven’t done it before and done it well, you just need to know it coming on in.
And myth number seven, the final myth today. If you choose to be self-employed you’ll be limited in what you can achieve, since you’ll be working alone. That’s sort of true. A lot of people think they can just turn out enough work on their own to be able to do what it is a need to do, that is not the case. You will need to extend your reach, multiply your effectiveness and divide your work by employing other people, by getting them to help you. I know in the woodworking business for instance it is almost impossible to turn out enough work on your own to survive. But if you hire other people and those hours are billable hours to the client, to the customer, then you can begin to make some real money, because you can turn out more work. That typically is the case.
Even if you’re doing a consulting or an educational practice, much as The Practical Leader is, we hire people who do a website design, we hire people who do book cover designs, we hire people who are social media marketers, we hire people who are accountants, we hire all of those people so that we can focus on those things that are going to make us money. But if we didn’t do it, I’d have to do it, which would limit my time and my ability to tackle those things that are really, really, really important.
The reality is the limitations are largely in your head. So it requires a different way of thinking. It requires an expansion of your consciousness about how business actually works and what it requires from you in order to make a successful business.
In the next video that’s going to be uploaded in a week, we’re going to talk about your good idea and how to qualify that idea. And I’ve got some great stories to tell you about some people who had a great idea and about the people who thought they had a great idea but it turned out to be a disaster for them.