Top 10 Business Success Myths Entrepreneurs Must Avoid
Nowadays, everyone can write an article listing the best advantages of being a successful entrepreneur. But this doesn’t necessarily make them true. Go on reading to find the top 10 myths about successful entrepreneurs you must avoid.
In today’s world, full of high speed information sharing, never-ending stream of data and all of world’s information at your fingertips, it is easy to think that you should get your business going before somebody else does. But is this true?
Even though it seems that first comers to the market have an advantage and they can capitalize on the blue ocean they have created, this strategy is very hard and challenging for many businesses nowadays, where many blue oceans are based on technological advances. If you are interested in reading more about this, visit following link.
1. Spread your idea to the world before somebody else does
What you need to do is think thoroughly about your idea and identify the core value points that you believe will be highlighted by the customer. Consider these in detail and pay attention to all the alternatives they could use besides your idea/business model.
“...think about all the alternatives and consequences”
Let’s say that you want to open a bakery that will be based on self-service of your customers. Your main value proposition would be that people will spend less time in queues and they can enjoy more of their day with freshly baked pastry. Sounds like anybody would like that, right? Here comes the moment when you need to pause and think about all the alternatives and consequences.
Are people ready for your idea? Is the outlook favorable from financial perspective? Could there be a direct competitor that is cutting costs moving in right across the street? Do people in the area prefer self-checkout or casually chatting with the vendors?
2. You need an MBA to start a business
This common misconception is probably as old as an MBA degree. This usual proposition of all business schools can be easily translated to ‘pay a lot of money to learn how to make it’. In a way, isn’t this counter intuitive?
As someone who has studied business in university, I must admit that there are things that you will not learn on your own, when it comes to business. World of business is increasingly getting more complex and one can simply lose focus if he doesn’t know how to execute plans and strategies correctly. This is even more true in financial strategies which require immerse focus and attention to detail.
“...it is no longer needed to pay high tuitions…”
But you are not planning on building a business empire overnight, are you? With all the information, freely accessible on the internet, it is no longer needed to pay high tuitions to access them. With online tools, such as Google Scholar, Udemy or even YouTube, one can easily go through relevant strategies and tools that apply to his/her business for little to no money. You can also enroll on online courses that teach you how to build a business by actually launching some products to the market and gaining real experience, like LaunchMBA.
Average MBA costs more than $50.000, don’t you think you could use that money for your own business instead?
3. You need to work all day every day
What do all CEO’s from large and innovative companies have in common? Warren Buffet, Elon Musk, Jeff Bezos all work 16 hours a day, 7 days a week. Only, it is not exactly true.
In numerous interviews, all great business owners and leaders tend to say they are working all the time and that made them successful. Being a workaholic certainly works for some people, though there are more measures of success than just hours worked every day. Nowadays, entrepreneurs must focus more on being productive, rather than being busy.
First and foremost, you need to identify if you are a morning bird, night owl or a midday worker. There are differences between each. If you find yourself more productive at evening, you should not push yourself to your limits in the morning. You will be tired by the time you would be otherwise achieving more and you will not accomplish what is needed.
“Focus is what drives results.”
As far as hours go, you don’t need to put 16 hours of day to work. All you need to do is find hours when you feel most comfortable working and focus. Focus is what drives results. Take a break every hour to do something that will distract you for a moment, get back to work and don’t break your focus for another time block. That is how you start achieving your results.
Do you know what Facebook, McDonald’s and JPMorgan have in common? They are not aiming to make everybody happy. And you should not too.
Many business models nowadays are becoming very customer oriented and many more and becoming service oriented. Look at internet providers, for example. Ages when internet companies were making their profits solely by selling internet to their customers are gone. Now, every provider is focusing more at customer care and service than ever before. With UPC internet, you can now get an antivirus, online TV package, cloud storage or special privacy VPN service.
“...20% of your customers will bring you 80% of your profit.”
Will this please all the customers that just want a regular internet service for cheap? Maybe, but how about the rest that wants to have all these extra features. They would have gone to the competition and as it generally applies, 20% of your customers will bring you 80% of your profit. What is funny is that many businesses ignore this rule and try to please every single one of them.
Don’t get fooled, if your strategy is to please everybody, your strategy is most likely wrong!
5. Financial results are crucial
Maybe you are a starting entrepreneur, maybe you are running your third business. This bit focuses on what key financial metrics are important to investors. Coming from many successful businesses, do you really need to be in ‘all greens’ to be successful?
Getting funding or finding a sponsor is crucial for many small businesses and entrepreneurs. Whenever you pay a visit to a bank or investment centers, they are all very likely to ask for financial results and ask very intimidating questions about key ratios. If you are not a graduate in economics and finance, this can be tricky.
If you are wondering what key ratios your company should be in ‘green’ at, focus on cash contra assets ratio, meaning how much money you have at hand now and how much you spent in total. Make sure that you are decreasing your debt (if you have any) and make sure that your investors are getting paid their dividends.
“Financial ratios are just on a paper…”
Your business can be growing and serving many happy customers, without necessary bringing in tons of profits, especially for a starting company. If your outlooks is favorable, your business model sustainable, and you can bring the profits increasingly over time, people will invest in your company, regardless of last quarter's financial results.
6. Do what another entrepreneurs do
I heard this many times. People are always quoting big entrepreneurs that started from nothing, worked hard all their 20’s and finally landed their first million. “You should follow their steps; they know how to do it.”
“…take everything with a grain of salt.”
Looking at many successful entrepreneurs among many fields, do you think that following steps of someone from age prior to landline phone will work in 2018? There are many great wisdoms that come with age and obviously, many entrepreneurs have a great deal of knowledge to share with us. But as always, it is important to take everything with a grain of salt.
Our world has never seen such a radical change as in last 50 years. Social statuses change, career paths change and needs of people change. There are new ways every day to capitalize on this and in the age of internet, entrepreneurship has taken on a whole another step. Can you imagine how the world would look like if cell phones would be at Kickstarter back in the 60’s?
7. Always take risks
Are you confident that your idea will take over the world? Do you see yourself as the entrepreneur of the year? I believe you do, that’s why you have decided to go down this path. And I also know that you are smart and you will not lose it all on one idea.
Where does that leave us? You should trust in yourself and your idea, you should work hard and don’t take small fails for what they are – challenges. Also, you should be smart and not throw all your life savings into starting your business or taking second mortgage on your home.
“Many success stories have their counterparts…”
There are many people who did that and ended up millionaires. Even big companies fail, especially when they take bad decisions and go wrong directions. You can read about them in news everywhere. Have you ever wondered what happened to those who failed at this? Certainly, newspapers are not very interested. But you should be. Many success stories have their counterparts, stories of people who cashed out on idea and were left out with nothing in the end. Be smart and don’t risk it all at once.
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8) You can do marketing yourself
Marketing trends are changing fast and strategy that worked few years ago, might now work today. Same applies to business models and customer preferences. In last 2 years, marketing world has changed more than in past 50 years. Every month it seems that marketing is shifting more and more towards digital and many companies don’t even waste their resources on traditional media such as TV commercials or radio advertisements. Facebook ads, Google AdWords or SEO optimization are on the top list of all digital marketing skill sets needed to kick-start your business. Do you have what it takes?
“…convince your customers to trust…”
You might be confident that you understand your business and you know who your customers might be. You can also understand the market where you want to start your business, but you probably don’t understand one important thing. How do you convince your customers to trust your brand?
This is where years of experience of marketers needs to be used. It is important to arise an eager want in your customers, not just showcase them your products. Digital marketing requires deep understanding of SEO, targeting and use of big data to convert visitors to customers. Trust professionals and let them excel your business.
9) You need to put everything aside to work on your business
Good work-life balance is crucial for any successful entrepreneur. Being in a right state of mind requires things you might want to set aside while working, though they are proven to have great impact on our well-being.
Every successful entrepreneur in this world needs to treat himself the way he would his business. As Josh Stemile says: “I schedule my workouts during the workday and prioritize exercise over all my work activities. There is some flexibility, but if there is a conflict between a trail run I need to get in, and a meeting with a client, I’ll reschedule the client meeting first.” This shows how important it is for entrepreneurs to treat themselves right.
Relationships with your family and close people must be treated as equally as the business you are running. When possible, take a break to think about people that matter to you and show them that you think about them. This is important because many entrepreneurs find themselves in very intense schedule, without much free time to spend with others.
“…customers are the best brand ambassadors”
Creating long lasting relationships is also very important aspect of running business. Bernard Kelvin Clive says it very straight forward, “people don't really trust advertisement they trust people. Brands that rely sole on adverts to sell, will eventually fade out. You need to get people to talk about your brand in a more positive manner without twisting their arms. So, focus on relationship marketing, because customers are the best brand ambassadors.”
10) Follow your passion and money will follow
People tend to be stuck in boring 9-to-5 jobs with no perspective, doing things they don’t like for people they hate. This can be found in all countries all over the world. What is less found is people who are courageous enough to make a change. If you are reading this, you are one of them and you are on your way, or already are, an entrepreneur. Though should you follow your passion?
“It might not pay out…”
First thing you need to ask yourself is, do you have that strong passion for something? Many people don’t even though we think we would be happy doing that. It might not pay out in the end and people might just not be interested after all.
Having a steady income will assure you that you can keep working on whatever you are passionate about, with the imaginable safety net in your mind in form of your steady income. Monetizing your passion could lead to not liking what you are doing anyways, and finding yourself only deeper in regret. This especially applies to people with no big savings, big student loan or family to support.
On the other hand, if you decide to start working on your passion and treat it like a full-time job, make sure to create a solid sustainable plan for yourself, that will provide you with income no matter how tough the month is or how many unexpected expenses you will need to pay every month. There's no shame in building your business as a side project during some years until you get comfortable enough to make the leap and start working full-time on your beloved project.