5 Facts about Small Business that Everyone Thinks Are True
Posted on August 19th, 2010 in Small Business | 3 Comments »
Lots of people have toyed with the idea of starting their own business, becoming their own boss, or somehow changing the world. However, most people are downtrodden by bullet points that have been engrained in them, about how starting a business isn’t worth the trouble. Today we’re going to put some of these ideas where they belong – in the dump.
1) XX% of Small Businesses Fail
I laugh every time I hear this statistic. Sometimes it’s 50%. Sometimes 90%. It’s the idea that because you are a small business you will fail, regardless of who you are or what your business is. This automatically puts risk on being an entrepreneur that most can’t stomach. There are two things wrong with this fact – the definition of small business and the definition of failure. First, ‘small’ covers such a huge range of businesses. How do you define the size of your company? Revenue? Number of employees? Carbon footprint? Secondly, how do you define failure? Has the time commitment and stress of the company gotten to you and you voluntarily close down? Or have you missed your revenue target and only made six figures instead of seven? Most would consider that a successful exit.
2) It Takes Money to Make Money
You’ll be told you’ll need a building, employees, equipment, and inventory and you’ll need money up front to even get your dream off the ground – yeah, if you’re in a capital intensive industry. Using all the free tools and resources online, starting a business has never been cheaper. Starting a blog and selling shirts on Cafepress.com requires exactly $0.00 (that’s American dollars, by the way), and you don’t need to manage inventory. Even if you need monthly costs for online storage and servers, it’s getting cheaper every day.
3) You Need a Rock Solid Business Plan
The myth is that you need a great business plan, usually to get business loans or secure funding, in order to be successful. Having a focus or a target market is a good thing. Having a document that you will measure the rest of your life against isn’t. If you do have a business plan, save the trees and don’t bother printing it out, because it will change constantly. Part of being a startup is flexibility. Think of companies who are now offering radically different services and products than when they first started – Google comes to mind immediately.
4) You Need a Great Idea
The inspiration for this post comes from a friend of mine. He’s a great guy. He’s even letting me be his best man at his wedding. He’s the type that has tons of ideas and knows he’s going to be a millionaire because of them – yet, he does nothing with those ideas. It turns out ideas are like belly-buttons, everyone has them (unless you were born in a test tube). It’s what you do with your ideas that will matter. Even if your idea is something that’s been done before, if you do it better your product will take off. Which leads us to…
5) You Need to Be First
Many people instantly give up on their dream the second they hear that someone else already has something just like it. This is actually a good thing. You now have a real world example that you can watch and follow. Improve on their shortcomings. Learn from their mistakes. Facebook certainly wasn’t the first to offer people a way to connect with their friends, but they have the most users in the world. Apple wasn’t the first to make great computers, portable music devices, phones or even tablets but they are now the biggest consumer electronics company in the world.