USA TODAY US Edition

Eight myths that can affect your small-business future

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

- 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.
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.
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