Eight myths that can af­fect your small-busi­ness fu­ture

Don’t let ‘fake news’ get in the way of pros­per­ity

USA TODAY US Edition - - MONEY - Rhonda Abrams Colum­nist

With USA TO­DAY’s launch of USA & Main, let’s get some of the most per­sis­tent myths about en­trepreneur­ship out of the way.

Hav­ing worked with thou­sands of small-busi­ness own­ers over my more than 25 years in busi­ness, and be­ing an owner my­self, I know how be­liev­ing these myths can keep you from suc­cess.

❚ Peo­ple are born en­trepreneurs or they’re not: You’ll hear this a lot if you’re just start­ing your busi­ness, es­pe­cially from naysay­ers try­ing to dis­cour­age you. They’ll tell you there’s one kind of per­son who can suc­ceed – an ex­tro­verted risk taker, a nat­u­ral sales­per­son, a leader, a vi­sion­ary. Hog­wash. The key: Find the type of busi­ness that suits you.

❚ Fifty per­cent of busi­nesses fail in the first few years: This is one of the most of­ten re­peated “al­ter­na­tive facts” about small busi­ness. Yes, within five years, about half of new small busi­nesses close. Few ac­tu­ally “fail.” The own­ers may have changed busi­nesses, moved, got a job or made so much money that they bought a boat and are sail­ing the seven seas. Nearly 80% of busi­nesses started in 2014 were still in busi­ness the fol­low­ing year; about half of all busi­nesses are still in busi­ness five years later; and a third of all es­tab­lish­ments will still be in busi­ness after 10 years.

❚ If you build it, they will come: You’ve worked hard to start your busi­ness. You fi­nally open your doors, put up your web­site and – noth­ing. Just be­cause you’ve created some­thing new, bet­ter or cheaper doesn’t mean cus­tomers will flock to your door. You’ve got to get out there and mar­ket, mar­ket, mar­ket. And then sell, sell, sell.

❚ En­trepreneurs must work 24/7: You will work long and hard run­ning your own small busi­ness. You’re the one who must deal with emer­gen­cies, staff not show­ing up, the pipes break­ing. When you run the show, it’s easy to feel you can’t af­ford to ever leave the shop. But with­out some week­ends and nights off and va­ca­tions, you’ll burn out.

❚ The first com­pany to mar­ket wins: You’ll hear a lot about the “first mover ad­van­tage.” For most small busi­nesses, it’s usu­ally bet­ter to be a fol­lower than a leader. The com­pany that in­vents an in­no­va­tive prod­uct spends a great deal of time and money not just de­vel­op­ing the prod­uct, but also build- ing a mar­ket. Typ­i­cally, it’s the com­pa­nies that im­prove upon ex­ist­ing ideas that win big. Google wasn’t the first search engine, iPods weren’t the first

mp3 play­ers and Face­book wasn’t the first so­cial me­dia net­work.

❚ You can write off ev­ery­thing as a tax de­duc­tion: Sure, busi­nesses can deduct a lot of ex­penses you can’t as an in­di­vid­ual. But don’t imag­ine you can sim­ply deduct $10,000 worth of ex­pen­sive cam­era equip­ment be­cause you sold two of your pic­tures to an on­line stock photo com­pany or you can write off that va­ca­tion be­cause you bought one or two prod­ucts to sell in your shop. And be cau­tious be­fore writ­ing off part of your mort­gage or rent just be­cause you work from home. You’ve still got to fol­low the rules.

❚ As long as you make sales, you’re OK: Yes, you have to make sales – i.e., have cus­tomers. But the three most im­por­tant fi­nan­cial as­pects of a busi­ness are “cash, cash, cash.” Man­ag­ing cash flow is key to busi­ness sur­vival. With­out cash, you can’t pay your em­ploy­ees, your bills or your­self.

❚ You don’t need no stink­ing busi­ness plans: You may hear that since the busi­ness world changes rapidly, all you need to do is sketch your idea out on a nap­kin or on a can­vas. But it’s be­cause the world changes so much that a busi­ness plan is more im­por­tant than ever. No, you don’t need a 35-page per­fectly pol­ished doc­u­ment. It’s the plan­ning, not the plan, that helps you stay out of trou­ble.

Rhonda Abrams is the au­thor of “Six-Week Start Up,” just re­leased in its fourth edi­tion. Con­nect with her on Face­book, and Twit­ter through the han­dle @Rhon­daAbrams. Regis­ter for her free busi­ness tips news­let­ter at Plan­ningShop.com.

The views and opin­ions ex­pressed in this col­umn do not nec­es­sar­ily re­flect those of USA TO­DAY.

AP FILE PHOTO

Oops! Harry S. Tru­man holds up a copy of the “Chicago Tri­bune,” which an­nounced a Dewey pres­i­den­tial vic­tory on Nov. 4, 1948.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.