Avoid These Entrepreneurial Myths
1. Bootstrapping Everything
If bets were made as to why a business was going to fail, the safe bet would be under capitalization (not enough money invested into the business) or negative cash flow (more money is spent than made). So although it is entirely possible to bootstrap a new entrepreneurial venture, it’ll make the start-up process infinitely easier if there is enough capital to work through the first six months smoothly.
2. Living Off the Profits Prematurely
Few entrepreneurs are able to live off a business for six months to a year after setting up shop, as for the most part, more money is spent towards growing the business than anything else. So with that in mind, try starting any entrepreneurial venture as a part time gig to gauge how things may go before making a big jump. As well, try having enough cash on hand to make it through at minimum the first six months of living expenses so any cash that is made can be reinvested.
3. Being the Boss
Many well-established entrepreneurs still believe this entrepreneurial myth to be true. Unfortunately, it is one of the more insidious of the bunch. Being in charge of running a business is the draw for most potential entrepreneurs, but the reality is that one’s customers and suppliers direct where most entrepreneurs time and money is spent. Additional bosses include the bank, investors, employees, and partnerships.
4. Getting Rich Quick
Yes, there are some entrepreneurs that make a lot of money very quickly- but most don’t. And of those who do, many fail to share the months or years of work behind the scenes that went into the supposed short term success. Entrepreneurship is a way to build wealth, but usually over the long term. In fact, some studies have shown that the most successful business owners don’t see significant growth until year five, or even year ten.
5. Needing Money To Make Money
There is only some myth to this statement, as it depends on what kind of business is being started. Anything in manufacturing and most retail businesses require a tremendous amount of capital, but service-oriented or consulting businesses typically don’t require as much capital. Therefore, entrepreneurs who are strapped for cash should review those businesses that can be started up with minimal funds, whereas those determined to start up a business in the manufacturing industry should be aware this myth isn’t a myth for them.