There are a lot of opinions floating around about entrepreneurship – some of them accurate, some of them not quite so true. Today we debunk seven myths about entrepreneurship.
Myth #1: Venture capitalists are a good place to go for start-up money
Venture capitalists may be eager to invest in businesses, but they actually fund less than half of one percent of entrepreneurial ventures – and only rarely do they fund a start-up.
Myth #2: The growth of a start-up depends more on the entrepreneur’s talent than on the business that he/she chooses
Talent is great, but the kind of business you choose has a powerful effect on your chances of success. Overall industry health, the need for the business, service or product, and the degree to which your business is able to satisfy its target market are all as important as your talent and experience.
Myth #3: Starting a business is easier than working for someone else
Chances are you’ll need to handle things you may not have experience in, like hiring and firing employees or making sales calls. Seven years after starting a business, only one-third of owners have a company with positive cash flow greater than the salary they left behind.
Myth #4: The best time for new business start-up is when you’re young and energetic
There’s something to be said for life experience. The number of businesses being run today by older Canadians is on the rise. Self-employment is growing fastest amongst young Canadians aged 15 to 24, and Canadians 55 years of age and older. This latter group accounts for 25% of Canada’s self-employed workforce.
Myth #5: Entrepreneurs are gamblers
Although giving up a steady paycheque may be a risky move, it may also be one of the few truly risky moves you’ll make in your career. Successful entrepreneurs only take what they believe to be carefully calculated risks, often trying to influence the odds by getting others to share the risk with them, or by avoiding the risk completely.
Myth #6: Entrepreneurs are completely independent as their own boss
Contrary to popular belief, being an entrepreneur doesn’t mean you no longer have to answer to anyone. You’re still accountable to employees, customers, suppliers, investors and partners. You may also experience pressure from your community, and there may be certain social obligations associated with your businesses. In fact, 35% of self-employed people in Canada work over 50 hours per week – compared with less than 40 hours per week for most employees.
Myth #7: Entrepreneurs shouldn’t waste time writing a business plan if they’re not looking for funding
A business plan is one of the most important first steps you can take in your business. It forces you to think of things like analysis of the competition and understanding your target market. A business plan will give you confidence about how the business must be run to be successful.
What are some entrepreneurship myths that you’ve heard?