The world of entrepreneurship often seems very different to those who have been in it for a while, compared to those just starting out. Here are the top 10 entrepreneurship myths as told to us by Canadian entrepreneurs – what do you make of them?
Myth #1: Entrepreneurship is an extraordinary phenomenon – only a few will make it big
Contrary to what you see in your newsfeeds or read in the media, every one of us has the entrepreneurial potential to act. Successful entrepreneurship is not reserved for Richard Branson, Jeff Bezos, and Bill Gates. Every one has the ability to create a small business venture that solves problems and creates gains for their customers, and the world around them.
Myth #2: Start-up success depends more on the entrepreneur’s talent than on the business that they choose
Talent is great, but the kind of business you choose has a powerful effect on your chances of success. The odds that you will make the Inc. 500 list (the top 500 fastest growing private companies in America) are 840 times higher if you start a computer company than if you run a hotel. Overall industry health, and the degree to which the business is able to satisfy its target market’s pains, are just as important as your talent and experience.
Myth #3: Starting a business is easier than working for someone else
Yes, you can make your own rules and often set your own hours, but the job of a small business owner is no less demanding than that of an employee. Think about it — you’re often the only one to handle every aspect of your business. You’ll need to handle things you may not have experience in, like hiring and firing employees or making sales calls.
Myth #4: Entrepreneurship will make me rich!
The data suggests that getting rich is possible, but unlikely. In fact, 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. And remember, most start-ups – over 70% – don’t make it. Instead of focusing on the pie-in-the-sky dream of wealth, be realistic about the fact that you may operate at a loss before you begin to turn a profit – how much of that are you comfortable with?
Myth #5: The best time for new business start-ups is when you are young and energetic
There’s something to be said for life experience. Self-employment is growing fastest amongst young Canadians aged 15 to 24, and Canadians 55 years of age and older. These “Maturepreneurs” account for 25% of Canada’s self-employed workforce. Hey, Colonel Sanders started KFC at age 65 with his first social security cheque as start-up funds. There’s no time like the present!
Myth #6: Entrepreneurs are risk-takers
The image of entrepreneurs given in the media is exaggerated. Although giving up a steady paycheque may be a risky move, it may also be one of the few truly outlandish moves you will make in your career. Successful entrepreneurs only take what they believe to be carefully calculated and managed risks, often trying to influence the odds by getting others to share the risk with them or by avoiding the risk completely. Collaborating with others and building a team to take on the business opportunity means you’ll be spreading the profit around, but you’ll also be sharing the uncertainty and risk.
Myth #7: Entrepreneurs are completely independent as their own boss, leaving more time to do what they want
Contrary to popular belief, being an entrepreneur doesn’t mean you no longer have to answer to anyone. Although you may be the boss, you will have to answer 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. Don’t get caught up in daydreams of having more free time than ever before. 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. All the more reason to get the best small business training you can!
Myth #8: Entrepreneurs shouldn’t waste time writing a business plan if they’re not looking for funding
A business plan is an important step you can take in your business. This detailed road map of sorts forces you to think of things that will be important down the line. Every section of this plan, from analysis of the competition to understanding your target market, will give you confidence about how the business must be run to be successful. If you’re starting a small art gallery, knowledge of art is a great starting point. But consider the best marketing options; will you need to hire in three years? or will you need to expand in the future? Putting together your business plan on paper reveals things that you need to know, which will help you come up with solutions to potential problems ahead of time.
Myth #9: If I share my business ideas with anyone, they might steal them
Many believe that keeping ideas secret prevents another from stealing your business idea and starting the business themselves. The business idea is the cheapest part of a business – ideas are plentiful. If you share your ideas and resources with others to co-create a business opportunity, you gain access to their expertise, network of people, and resources.
Myth #10: Entrepreneurs instinctively know what their customers need and want
While we’d like to believe that entrepreneurs are oracles with the ability to see all and know all, that’s simply not true. Only your customers know what pains and problems they have a desire to solve. Engaging with customers, understanding them, testing your potential solutions with them, taking feedback, and testing again is a more direct path to success than creating and perfecting – a product or service first, only to find out your solution is off-track. A very costly mistake.
The reality of entrepreneurship can be difficult, involving lots of hard work and sacrifice. But fear not! Studies show that entrepreneurs with education in entrepreneurship and previous entrepreneurship experience have an 80–90% chance of success with a new business.