2 Myths About Starting a Business
Entrepreneur.com has their list of 10 myths on starting a business but they’ve missed 2 important ones.
There’s no question the myths they’ve listed are true. And by debunking the myths with some real facts (particularly related to funding) they’re not just ranting and raving about the difficulties of being an entrepreneur.
The truth is, lots of entrepreneurs fall into the traps of these myths and survive to tell about it. But knowing the pitfalls beforehand is bound to help even more.
Here are 2 additional myths about starting a business that belong on Entrepreneur.com’s list:
- It’s all about doing what you love and doing what’s fun. It should start out being about what you love. That’s why so many people look to take a hobby and turn it into a business (which I think is a great approach.) But once the honeymoon is over and it’s time to get to work, you may be facing a cold splash of water on the face.
Setting up a business and running one has a lot to do with a lot of things that don’t involve what you love. (Assuming you don’t actually love any of the things I’ll mention right now…) Examples include: Incorporating (dealing with lawyers), accounting, chasing clients for money, cold calling, paying bills, unhappy customers, slow vendors, etc. The list goes on and on.
When you’re starting a business there are a million-and-one ducks you need to put in a row. And as soon as you turn away for a second, one of those quackers is waddling off on you. That’s not to say the core of what you do can’t be fun…and yes, it should be! But if I was going to bust one myth it would be this one: it ain’t all a song and dance.
- You can do it alone. This is the second myth. Simply put, you can’t be successful alone. That doesn’t mean you need a 50 person consortium of partners (cause partners bring their own headaches), but you’re going to have to rely on others. In a recent episode of The Great Big Small Business Show we talked about delegating. In particular, Becky McCray talked about ways of delegating without hiring…forcing family to help you, for example (kidding!)
I’m reminded of Leonardo DiCaprio’s words in Titanic, “I’m the king of the world!” Well…we all know how that ended up. Wanting to conquer the world is fine, but don’t assume you can do it alone. You’ll need a dedicated team of people to help you with a wide variety of things.
So there are two more myths about starting a business…adding to Entrepreneur.com’s list of 10.
Care to add some more?
I have to say that I disagree with #2. Building a company on your own can be done. I know several entrepreneurs who are quite successful and they own their own companies with no partners. In fact, my own consulting company has started to become very successful and it is still just me working for the company.
If by “You can’t do it alone” you mean that as a one person company, you will never make it big without ever hiring anyone, then that statement is self evident. One person can only do so much, and has neither the time, nor the wide range of talent required to do it all.
But it is certainly possible to build a successful company all by yourself. Does having a single employee put you in the “Not doing it alone” category? What about outsourcing your payroll to ADP or to Paychex. Or obtaining the services of an attorney or a CPA. Do those actions disqualify you from being in the “doing it alone” category?
Hi Mike,
Thanks for stopping by and commenting!
There’s no question that a single person can run a company. I don’t disagree with that…I don’t think it’s necessary to have partners. In fact, partners bring all kinds of headaches of their own unique variety.
Outsourcing non-essential stuff like payroll (obviously paying people is important), accounting, etc. is part of what I’m talking about — you can’t do it all by yourself. You can’t be the guy that sells, markets, runs operations, manages all the nitty gritty without outsourcing something to someone. That may be hiring people, or it may mean finding other service providers like accountants, lawyers, etc.
So you might still consider yourself in the “Do it alone” category at that point, it’s semantics perhaps, but the important part of this is that you can’t do everything; something has to be outsourced. Or, it might involve partnering with people to help in certain aspects of the biz (like resellers.)
Thanks again Mike! I appreciate the discussion and hope you’ll keep coming back!
I understand your point now, and yes it is merely semantics. I think that saying “You can’t do everything alone” would be more accurate. For myself, I outsource a lot of functions for two reasons. First, because someone else could do a better job. For example, my wife is a graphic designer, so I had her create my company logo.
Second, because some things just aren’t worth my time to do. ie: Payroll processing. For a nominal fee, I save myself hours of work that I would otherwise spend figuring out the tax laws. It’s just not worth my time.
I think that the real question in my mind is that in this day and age, how fast can a company that’s owned by just one person climb the corporate rankings? Obviously, hiring would be part of that, but a lot of the more prominent companies these days seem as if they’re all partnerships, or small groups of people.
What about single owner companies? Do they never make it big? Are there only a few that do? It’s hard to find examples of those types of companies that weren’t started eons ago.
I think a 1-person shop will always be limited in scale…it’s 1 person after all. And most people aren’t experts at everything. Plus, there’s only so much time in the day, so if you have to outsource a lot and manage all of that and do what you’re good at, and deliver for clients, etc. etc. … well, we see pretty quickly how hard it is to scale.
Even if you’re very successful, you can only handle a certain number of clients and grow the business to a certain size by yourself.
Having said that, if that’s what you want, then that’s great. If you don’t want to grow into a bigger organization, that’s totally fine.
To grow bigger (which I won’t say is “more successful” cause success is defined by the individuals) I think you need a team. Might be a small team…especially in the technology world where it’s becoming easier/cheaper to develop software/web-based apps…but I think a small team of people with complimentary skills is where most businesses are growing from at this point.
Single owner companies are not the same as 1 person shops. I think you’re traveling down the wrong road with that answer. Ambrosia Software, for example, is owned by 1 person named Andrew Welch. He has no less than 10 full time employees and is doing quite well.
What I was referring to was 1 owner companies, rather than partnerships, or VC funded companies which are owned by many people. How far can a 1 owner company go? The largest one that I know of is Wegmans Food Market. 25k employees and still privately owned. Not sure if there’s just one owner or if ownership is split up among the Wegmans family members.
I used to work for them. Wonderful company and top ranked by their employees as a great place to work year in and year out. Are there other examples of this type of success?
It’s a good question. I don’t have an answer though.
I would guess that when most companies start, the original person with the idea almost immediately looks for partners with complimentary skills, and since there’s probably not a lot of money (if any) on the table, it’s about sweat equity and ownership. And so you’ve got partners.
I don’t see any reason why a 1-person owned company can’t be as successful as any other company, although if they require financing to help they may need to go out and get it (which may mean losing some ownership / taking on partners.)
I’d say when starting your FIRST business it might be harder as a 1-person owned company because you’ll have less financing, experience, connections, skills. After your 2nd or 3rd go of it, you might have more success.
If anything, being a single owner could be an advantage in terms of making decisions, clarity of vision, etc.
Maybe someone else will have some great examples?
I one that I disagree with on the entrepreneru list is the need for a business plan or a marketing plan. Acutally on the INC 500 list over 52% did not have business plans.. Now I am not arguing that you dont need one, becuase I find it a very useful exercise. And Planning is a good exercise. But BUT, some people just wake up and do it and make mistakes and keep going.
just my 2 cents.
Hey Kim…I would bet that many of those INC 500s that didn’t have business plans, have them now…
But I’m in partial agreement - there’s a certain advantage to saying, “Just do it.” (to steal a catch phrase)
And, even with plans you’re going to make mistakes. Plans aren’t fullproof.
Having started a few businesses and almost started many more, I can say that there’s a definite advantage to putting *something* on paper. Even if it’s not your traditional/typical business or marketing plan. Get something written…a vision, a mantra, goals, a few bullet points on strategy…put something down and roll from there.
I’d also say that you can start something by doing things like talking to people, fleshing out an idea, while you’re also working on a more formalized plan; the process doesn’t have to be totally serial.
Thanks for stopping by! Keep coming and discussing…your site looks very interesting too.
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