Entrepreneurs usually go into business wearing some lovely rose-colored glasses, only to learn that there are a whole host of myths and misconceptions about owning your own business. I asked a variety of entrepreneurs what was the one thing that they wish that somebody had told them about business ownership before they started their companies. Below are the biggest business myths and misconceptions, straight from their mouths, that could have reshaped their entrepreneurial journeys.
1. It Is Freaking Hard!
Hindsight In Entrepreneurship: I never appreciated how hard entrepreneurship is. I read so many success stories prior to becoming an entrepreneur myself that I thought it was easy. At least it seemed easy. Part of me wishes someone told me how hard entrepreneurship was before I got into it. Another part of me is grateful for not having known, because I might have never tried.
2. Flying With Clipped Wings
Hindsight In Entrepreneurship: Under capitalization can be a constant barrier even to the most noble goals in business. It affects many areas of the business from a competitive standpoint – speed to get to market with new and innovative products would be one good example. Other examples would be marketing restraints and the limitations on hiring the best and most high performing people.
3. It's Going To Take A Lot More
Hindsight In Entrepreneurship: I did not realize prior to founding that "it was going to take a whole lot more". From money to time, every entrepreneur underestimates how much it really is going to take to become successful. No matter how well you estimate your costs; there will be a host of extra costs that you failed to take into consideration. Plus, you will spend more time working on your business than with anything else.
4. Client Selection
Hindsight In Entrepreneurship: I learned that I at times must fire clients who don't deliver on their promises so that we can overdeliver on ours.
5. Bootcamp/Training Junkie
Hindsight In Entrepreneurship: I wished someone had told me not to fall in the trap of becoming a "getting trained" junkie - attending all training seminars, bootcamps, buying DVD/CD training programs - and spending time on constantly getting better; INSTEAD, make sure to spend at least 8O% of my time on income-generating activities.
6. Going It Alone?
Hindsight In Entrepreneurship: The one thing I wish I knew when I first started my business was that I didn't have to do it all alone. Operating on shoestring (and a broken one at that), I originally did have to do everything myself. The thrift that made it possible for me to survive and then thrive in the beginning however quickly became a hindrance when I delayed hiring people who could do any number of specific tasks easier, cheaper and far better than I could.
7. What I Didn't Know
Hindsight In Entrepreneurship: I didn't realize how much TIME you have to expend when you own your own business. When launching a business it can be 24/7 when you're in startup mode; and continues if you're a solopreneur. Not to complain; I love having my own company. But you have to LOVE what you're doing as an entrepreneur. If you don't, it may be better to stay in a job you like! Before jumping into entrepreneurship, know that you will be putting in long, hard hours - so love what you're doing!
8. Religious/Political Beliefs?
Hindsight In Entrepreneurship: It is critical to know your potential business partners' religious and political beliefs as it can be a potentially disastrous combination. What if your partner wants to shut your business down one day a week or to observe a holiday? What if they want to use the business as a platform to promote their personal political views? You don't need to be completely alike, but make sure you understand the differences upfront so you minimize the chance for any surprises or misunderstandings.
9. No Pay If The Phone No Ring
Hindsight In Entrepreneurship: Having owned four different businesses, it took a while and several business to reason out why I needed a bigger (meaning longer period of time) reserve of money to cover marketing and advertising expenses. The pay back on marketing and advertising is good, but there is a time lag between an ad or web site change and your first sale resulting from these changes. You can't pay the phone bill if the phone doesn't ring.
Thanks to: Peter Zawistowski.
10. Don't Bet Over Your Head
Hindsight In Entrepreneurship: I am a CPA and have seen many entrepreneurs fail and succeed. For those who failed, the biggest thing they should have focused on is "how much money are they prepared to lose" BEFORE they started. If they gave that thought time and consideration, they would have saved thousands of dollars as they poured and lost good money after bad.
11. Understand Your True Value
Hindsight In Entrepreneurship: I wish someone would have convinced me my time, effort,energy and knowledge were unique commodities and very valuable. In order to attract business, I undercharged for my services, which was a significant mistake. It's much easier to lower prices than to raise them.
12. Entrepreneurial Hindsight
Hindsight In Entrepreneurship: Things nobody told me before I became a professional services entrepreneur:
Nobody pays in 30 days. The cash / credit cushion you've got is not enough.
There's never a "cigar moment" to relax. There's always a crisis: project quality, new business, cash flow, militant subs...
You don't know your business partner(s) until you're in this foxhole together.
"Working for yourself" is a fantasy. You work for clients, subs, vendors, the taxman, and the brand/business itself, in that order.
13. Entrepreneurialism As Therapy
Hindsight In Entrepreneurship: When starting my business, I wish someone would have told me that my "stuff" would come up along the way. Along with branding, marketing, networking, etc., I faced (and continue to face) every fear and insecurity lurking deep inside me, waiting for an opportune moment spill out in the form of lack of confidence, fear of taking bold action, and a paralyzing fear of failure. What a surprise! But now I have grown as a person, enjoy a great business, and saved big bucks with the local therapist.
14. Gut Instincts Rule!
Hindsight In Entrepreneurship: Never give up control of you brand even if you have to grow slower. It's much harder to grab it back later. That equity is priceless! Also, no matter what experts might tell you is best or new client's pie in the sky big money promises...at the end of the day go with your gut instinct. If something feels off don't do it. Not enough credence is given to one's own intuition!
15. C Corp? S Corp? LLC?
Hindsight In Entrepreneurship: The one thing I wish somebody had told me about business ownership before I started Loyalty Factor (a consulting and training firm focused on increasing corporate profitability by providing individually tailored consulting and training services that enhance employee, customer and brand loyalty) is the various differences between C Corp, S Corp and LLC and the advantages and disadvantages of each.
16. There Are No Guarantees
Hindsight In Entrepreneurship: Myth: "Provide a great service at a good value, market it well, and they will come." I spent 6 years learning my industry before launching out on my own, did an extensive competitive pricing analysis, and implemented great customer service and a remarkable marketing plan. However, I've still had to scrape and scramble to make ends meet in this economy. You can have your ducks in a row, but you'll still have to think on your feet to stay afloat when things outside of your control go a bit wacky.
17. Most Gurus Can't Teach
Hindsight In Entrepreneurship: Now, after 5 years online - starting with NO tech ability and no background in marketing or sales -- we produce our "Bridging Heart and Marketing" conferences, and are the proud authors of #1 bestseller The Heart of Marketing - Love Your Customers and They Will Love You Back.
We wish we'd known at the start that lots of people will take your money promising to show you the way - AND VERY FEW are skilled enough to help you know the way that's right for you AND show you how to do it!
18. Location, Location And Zoning
Hindsight In Entrepreneurship: Location is key to retail success. Too bad no one shared a tip to beware of zoning issues during an election year. As the owner of a unique ladies boutique, we chose the second shop based on an area that we thought we would have little to no opposition. But due to the local commissioners up for re-election, Sassy became an issue. Eight days open, nine months closed, and a battle in court during that time. We did win our case and re-opened in the same strip mall. Great shop mediocre location.
19. I Still Love You
Hindsight In Entrepreneurship: Friends/family may not be as enthused or supportive as you'd hope. They may not buy your service or product or promote it. It's not that they don't care. They just may not quite GET that at the beginning every little bit of support feels huge.
Barbara Hranilovich of BARBCO
20. Gotta Fan Those Flames!
Hindsight In Entrepreneurship: The one big thing I wish someone had told me before I began textSAT is how much time and energy I would need to devote to marketing. I wish I had known that offering an outstanding service at a reasonable price to a hungry audience would not be enough to fan the flames. I had to stop being an academic purest and focus on getting the word out! Knowing this ahead of time would have braced and prepared me for the magnitude of the marketing effort required for success.
Sue Wilkowski of textSAT
21. You Get What You Inspect...
Hindsight In Entrepreneurship: "You get what you inspect, not what you expect." 20 years ago, a friend & I launched a start-up. My friend was in charge of product liability insurance and got a quote from an insurance firm. Relying on his quote, I invested $30k in manufacturing dies and an initial run. Months later I learned the real cost was 50 times what he was quoted, and found out that he got the "quote" at a family barbecue, over a hamburger! I was completely out of money and had to shut down the company - losing $30k!
22. Collect And You Will Receive
Hindsight In Entrepreneurship: I love what I do. In fact, sitting all day dreaming and writing about skateboarding is probably the best job I could have ever hoped for. I don't just love what I do, I thrive on it. About the only time my job ever feels like work is when I have to collect on accounts that take a long time to pay. So, perhaps it's not so much hindsight as it is a simple truth:
you sell your product or service twice...first when people buy it..and then second when it comes time to collect.
23. Delegating Successful Actions
Hindsight In Entrepreneurship: Running a construction company for 13 years has taught me many lessons, but two stand out as the most significant.#1-DELEGATE!!! From the very beginning get a bookkeeper/accountant. Knowing your financial status at all times is crucial. YOU MUST keep in CONSTANT communication with them and KNOW what's in, out and pending.
#2- Successful Entrepreneurs hold NO ASSETS in their personal name. Protect yourself through a corporation and keep personal-PERSONAL!
24. Know Your Most Remarkable Idea
Hindsight In Entrepreneurship: Understand where you are most remarkable. Too many businesses communicate too many offerings to their potential customers. These customers then become confused and do not remember what you want them to know.
When you are planning your marketing efforts, be sure to know what you are most passionate doing and where you are most remarkable. Once you know that, then you can highlight that point in your written materials and your networking.
25. Invest In Top Talent
Hindsight In Entrepreneurship: My first start-up had all the makings of the next great company, but did not have an owner (me) that understood the recipe for start-up success. With my new company forecasted to achieve $10 million in 2010, I obviously learned what most benefits clients: Give yourself an edge by getting the best people. Big firms get a pass on depth of talent as they can fall back on name recognition. Small and midsize companies do not. Hire top talent and you will succeed.
26. Seek Wise Counsel And Use It
Hindsight In Entrepreneurship: When I opened my first business it was an independent restaurant with 120 seats, full bar and full service menu. I took some advice from the SBA and met with a retired restaurant owner through S.C.O.R.E. The mistake I made was not continuing this relationship and utilizing this assistance weekly or at least monthly. Owning a business requires many moving parts and lots of fires and landmines. When you have someone to help guide you, your mistakes will be smaller and farther apart.
27. Myth: Go Big Or Go Home!
Hindsight In Entrepreneurship: I wanted my first business (now defunct) to appear professional right from the start. I invested thousands in web, graphic, and product design. But doing so put me too deep in the project to make changes as I learned more about what customers wanted. Had I started small, I could have been more flexible and grown the business incrementally. I recently launched a new business with minimal investment. Doing so has allowed me to be adaptive to customer response. Already I'm pleasantly surprised.
28. It Takes Money To Make Money!
Hindsight In Entrepreneurship: No matter how good an idea, unique a product, great your sales skills, you must be adequately financed! Whether using savings, credit cards, investments, or loans, plan your adventure. You need at least 2 years of expenses set aside as the business grows. To be safe, double that amount,there will always be the unexpected. A well financed business can become a successful business, but a badly financed one is more likely to become a doomed one.
29. You Get What You Pay For
Hindsight In Entrepreneurship: The biggest business truth that I learned is trade-outs are never mutually beneficial. I have been approached numerous times to provide public relations services in exchange for Website updates, SEO, consulting, products, you name it. Early in my journey of owning my business, I knew it was important to get our name out. However, after trying trade-outs a couple of times, I vowed to never to do it again. The old adage of “you get what you pay for” rings so true in the context of trade-outs.
30. Entrepreneurial Ignorance
Hindsight In Entrepreneurship: It's true for me & I've heard it from other "E's". If they knew what they would have to go through to successfully reach the running phase of their startup they would have never done it. That's not an endorsement to jump in blind, but a great amount of following your gut will be a constant as an entrepreneur. Being an "E" can be the greatest experience of your life, but failing to prepare and putting forth the required effort can make it the most miserable experience. Go for it - and good luck!
31. Build It On Your Own
Hindsight In Entrepreneurship: I wish I had known prior to becoming an entrepreneur that when you allow someone to help you in the start up phase, they have a sense of ownership and feel like you owe them something for their financial assistance. I would have rather taken baby steps and built my firm on my own rather than allowing my boyfriend at the time to finance the start up and when we broke up, I had to start all over from scratch.
32. The Rules Of Accounts Payable
Hindsight In Entrepreneurship: You may think you set the payment process, but if you have multiple types of clients -- non-profits, county governments, school districts, corporations, etc -- all have different accounts payable processes. You have to learn how and when they pay. Want to work with that non-profit? Be prepared for the fact that they only cut checks every other Friday. Want to sign the local school district? Be prepared for their vendor vetting process that could add three weeks to the invoice payment cycle.
33. Fantasy Revenue Projections
Hindsight In Entrepreneurship: From personal experience and from what I've seen from clients of my law practice, entrepreneurs are frequently over optimistic about their projected financials. I projected revenues for the first year of my business that, eight years later, I still haven't hit.
I hope that these valuable insights from real entrepreneurs can help shape your journey. Many thanks to all of the entrepreneurs who generously shared their insights!