Teaching entrepreneurship, you’re going to run into a bunch of so-called “experts,” who are going to tell you the “truth” about starting and running a business. But much of what they’ll tell you is just not true—no matter how widely held the beliefs.
1. People are either born entrepreneurs or they’re not
You’ll hear this a lot. They’ll tell you there’s just one kind of person who can succeed—an extroverted risk taker, a natural salesperson, a leader, a visionary. Hogwash. All kinds of people can and do run successful businesses. The key: find the type of business that suits the entrepreneur.
2. 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 have actually ‘failed.’ 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. 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.
3. If you build it, they will come
Students—and entrepreneurs—often believe that if they create a great product or service, customers will naturally flock to their door. They need to understand that they’ve got to get out there and market, market, market. And then sell, sell, sell.
4. Entrepreneurs must work 24/7
Yes, entrepreneurs work long and hard starting and running a business. But without some weekends and nights off and vacations, they’ll burn out, and so will their employees. Millennials, especially, value some work/life balance.
5. The first company to market wins
You’ll hear a lot about the “first mover advantage.” For most 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 building 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.
6. As long as you make sales, you’re OK
Yes, entrepreneurs have to make sales, have customers, to be in business. But the three most important financial aspects of a business are “cash, cash, cash.” Managing cash flow is key to business survival. Without cash, a business can’t pay employees, bills, or the owner.
7. You don’t need no stinking business plans
You may hear that since the business world changes rapidly, all an entrepreneur needs to do is sketch out an idea on a “canvas” or prepare a presentation deck. But it’s because the world changes so much that a business plan is more important than ever.
Hey Small Businesses: Do You Know Where Your Customers Are?