Tue 31 Mar 2009
Myth # 1: You Will Not Need a Business Plan
If you think that you can start your own business with just a vague business plan in your head, think again. You should have a written business plan explaining all factors of your company such as financing and attaining specific goals in great detail.
A well-documented business plan will chart out the path that you need to follow in order to achieve your business goals. This is a small business startup fact you should remember!
Myth # 2: Advertising Is Only For the Big Players
This small business myth has led to the closure of many small businesses. However, advertising does not necessarily mean spending obscene amounts of money on TV commercials.
You can at least advertise through flyers, sales letters, or by placing advertisements in newspapers or in trade magazines. You cannot increase your business if no one is aware of your business' existence.
Myth # 3: You Will Become Your Own Master
When you run your own small business, you may have the potential to make more than you would if you were working for someone. It is also quite possible that you will have more time for your friends and family.
However, in the beginning, you will require additional time as you try to set up your business and will also need to put in long hours when you start to expand.
You might be able to attain some flexibility in working hours, but that may only be within a certain limit.
Myth # 4: You Can Convert Your Hobby into a Business
While this myth about business is partly true, it can still be potentially suicidal if you do not conduct proper research into the other aspects of the business.
You will need to arrange for financing, maintain a healthy cash flow, pay off creditors, handle employees and much more if you are to succeed in your business.
A hobby could be a starting point - but it should not be the only point when starting a business.
Myth # 5: You Can Form a Partnership with Close Friends
This myth about business can leave you without both money and friends. Just because you have great friends does not mean that you should enter into a partnership with them.
The small business startup fact is that there has to be the right mix of skills in order to achieve success. Too much money or too little money could cause a fatal crack in the partnership.
You should have all the functions of each partner clearly specified in writing before venturing into a partnership with anyone. Especially your friends.
Myth # 6. You Can Win Customers Just by Lowering Your Prices
Although pricing is very important, equal importance needs to be placed on after-sales-service, politeness and having the right products at the right time.
Your business will not last long if you just lower your prices. By using this tactic, you will not only squeeze your profit margins but land your business in deeper trouble if another business comes along and offers the same products at even lower prices.