Five Myths to Bust Before Becoming an Entrepreneur

Avoid becoming one of the five in ten businesses that fail. Bust the five myths of entrepreneurship to see if you have what it takes to become an entrepreneur.

Today’s post is by May McCarthy, author of The Path to Wealth: Seven Spiritual Steps for Financial Abundance.

With record-breaking stock market levels on the heels of success stories about entrepreneurs like Jeff Bezos of Amazon and Mark Zuckerberg of Facebook, there is a desire for many employees to quit their jobs and start their own businesses. Before you quit your job and deplete your savings to fund your own startup, take a close look at your motivations for wanting your own business.

According to the Small Business Administration, 50% of businesses fail in their first year. This is often due to poor planning and the founders’ belief in five common myths about becoming an entrepreneur. Following is an outline of these myths and what you should know to prevent failure from happening to you:

Your income will increase

Most business start-ups are funded by the founders. Depending upon the type of business you start, your business may not produce a substantial source of income for the first year or two. Whatever amount of money you think you need to get to a level of profitability based on your business plan projections, double it so that you can handle unexpected situations that arise. With good planning and execution, you’ll have a better chance at succeeding and can pay yourself the larger salary that you desire in the future.

If you build it, they will come

Perhaps all of your friends and family have told you that you’ll be successful with your new business. That may be true, but before you empty your nest egg to lease the space, buy the equipment and print the letterhead, do some planning on paper first. Determine the feasibility of your business model, marketing plan, location choice, and competitive landscape so you have the best opportunity to succeed. Customers need to know where you are and to believe in the benefits of buying what you have to offer. It’s better to plan this out on paper than to discover it when very few customers show up after opening day.

It will be easier than your current job

As a founder of a new company, you will likely have to manage many of the tasks to operate your company. That includes accounting, licensing and legal issues, human resources, business operations, sales and marketing, and even janitorial services and mailing. As part of your business plan, create an organizational chart to include all of the skills that are required to run your business. Fill in the names of the people or contractors that will do the tasks. You’ll notice that your name is in most boxes and you’ll need to learn to do many of the tasks required for your business. You may not find this easy to do.

You’ll get to make your own schedule

As an entrepreneur, you will make your own schedule, and that can be tricky. You’ll need to manage sales and marketing, process orders, perform billing and receivable services, manage legal issues and vendor agreements, and so much more. Managing these tasks on a calendar will help you to be more productive. As your success and business revenues grow, you’ll be able to delegate some tasks to future employees and free up time to grow your business.

You’ll finally have more freedom

Successful entrepreneurs do have more freedom to build something of value to serve their customers. Changes to products, services, and operating policies can be made quickly, and responses to customer and market needs can be done swiftly. If this is the kind of freedom of expression that you’re looking for, becoming an entrepreneur may be right for you. If on the other hand you want more time, more money, and a less demanding schedule that is free from risk, you may want to use your valuable skills and talents to help another company to grow their business instead. Freedom for an entrepreneur is not free from risk, time, money, and energy.

If you are passionate about becoming an entrepreneur, create a business plan first. You will get a chance to make your mistakes on paper and determine whether your business model is sustainable and feasible. There are a number of free plan templates available on the internet. Once you’ve completed your plan, connect with seasoned and successful business people that you know or contact SCORE at the Small Business Administration to get some feedback on your plan. Communicate with potential customers to discover if they’d even be interested in what you have to offer. All of this is important in determining whether your plan is a feasible one and will improve your chances for success. Good luck!

Since 1982, May McCarthy has co-founded and helped to grow seven successful companies as large as $100 million in annual revenues. She is the author of the best-selling The Path to Wealth: Seven Spiritual Steps for Financial Abundance (CLICK HERE to get your copy). To learn more success principles visit www.maymccarthy.com.

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