Top 5 Startup Myths
by Rebecca Button on May 29th, 2008
You may think you know what you’re getting into…but you have no idea. There are probably a few preconcieved notions you have about starting a business whether you think you’ve done your homework or not. So without further adieu here are the top 5 startup myths you should be aware of:
5. The government gives grants to small business startups – While some states may have special funding programs in place for people with disabilities, minorities or veterans, the federal government does not have any programs that give money directly to any business. Your best bet is to get involved with the Small Business Association (SBA) and see if you can work with them to have them back a bank loan. You can also contact your local Economic Development Corporation to get help regarding information and resources that will help small businesses.
4. The only reason you need a business plan is to obtain financing – Forget about the financing, a business plan should be made to give you a realistic perspective of the market and the competition. Preparing a business plan keeps you from discovering the hidden pitfalls that can lead to an early closing. Yes, a business plan is the best tool to use to figure out the startup and monthly cash needed to fund a business, but that is only a portion of why a business plan is so useful.
3. A unique product/service sells itself and doesn’t need marketing or advertising – Every new business owner believes their product or service is compelling, otherwise why would they invest their time and money in the business? In a marketplace filled with billions of product offerings, it’s the ones that use the power of marketing to their advantage who get the most customers. The worst thing a business owner can do is sit back and wait for customers. You need to work to grab the attention of your target market, because you can bet that if you don’t another business will. And, inferior products or not, they’ll get the business because they put their offerings in front of more people. It’s as simple as that.
2. Small business owners have more free time – Ah, the life of an entrepreneur: Lying around in pajamas, eating bon bons on the couch and leisurely typing away on the laptop – Ha! Try the complete opposite: Early mornings, late evenings, long workweeks and working on the weekends. Sure you’ll be able to see the kids off to school and take them to the dentist, but in order to grow your business, you’ll need to put in the extra time – and that’s especially important in the first three years.
1. Business owners can write off practically everything – Not unless you enjoy being audited by the IRS! Sure there are perks to being a business owner; you can write off business lunches, computers, office rent and utilities, but that doesn’t mean groceries, clothes, haircuts, etc. Some people think that just because they’re a business owner, they can magically deduct every purchase if they can somehow link it to their business ("I need a $5000 ‘power suit’ for the meeting"). The reality is, it just isn’t so, and that kind of thinking is likely to get you into serious trouble with the IRS.
Bottom line: There’s no easy way to the top. Good old fashioned knowledge and hard work is the key!