For many people, the thought of owning their own business is like a dream come true. Many Americans would love to have their own business. With the downturn in the economy, and lack of good jobs in the marketplace, many Americans are turning to starting their own business as a last resort.
While owning a business has many advantages, it is NOT what you think. The failure rate among businesses is VERY high. Nearly 90% of all businesses don’t make it five years. And many of these businesses that fail leave the entrepreneur in a horrible financial situation. Sure, a few people make millions (or billions) but it is not the norm.
I’m not here to paint a doom and gloom picture for you. I just want you to know that building and owning a successful business isn’t as easy as you think.
Yes, there are some amazing rewards to being an etrepreneur. But’s it HARD to build a profitable business that succeeds over a period of years. Just ask any entrepreneur. Or, drive through your local home town and see how many closed down businesses and vacant buildings there are.
What I would like to do in this post is share my top 7 myths about owning your own successful business. These myths are just my own thoughts from being an entrepreneur for the past 13 years. Enjoy!
# 1 You Will Make a Lot of Money
Yes, you can make a lot of money by having your own business. Many of the world’s wealthiest people are entrepreneurs. And for every successful entrepreneur earning a comfortable six figure income, I’d bet there are 100 to 200 other entrepreneurs struggling to survive.
The truth is, most business owners earn less than their employees. In the early years of their business, many entrepreneurs earn less than minimum wage. Some business owners can go one to three years without earning a PENNY of profit. I know that might come as a surprise to some of you, but it’s the truth.
As your business gets established and grows, you might make more money. But good things take time. That’s why I suggest starting a business part-time while you keep your day job OR making sure you have enough savings to live off for a few years.
# 2 It’s Easy to Build a Successful Business that Does the Same Thing You Do In Your Job
Many people make the mistake of thinking because they are good at the job they do, they are qualified to open a business that does the same thing. For instance, the disgruntled barber thinks he can open his own barber shop and have the money rolling in. Or the good car salesman thinks he can move on to bigger and green pastures by opening his own car dealership.
What these folks quickly discover is that there is a BIG difference between opening and running a successful business compared to doing the technical work of the business. In other words, just because you are good at cutting hair does not mean you will be able to have a profitable barbershop of your own.
# 3 You Will Have the Time Freedom to Do What You Want, When You Want
This one is the biggest myths of all! With most businesses, the business owner is a SLAVE to their own business. They work 12+ hours a day, six to seven days a week, because their business depends upon them for survival. They can’t take a week off, let alone a day off! They are the business and without them there is no business.
# 4 My Employees Are My Friends
Your employees are NOT your friends, nor should they be your friends. In many cases, they will be the enemy! If you’ve ever owned a business, you will quickly discover that employees are often your worst nightmare (not always).
They don’t care about your business as much as you do. Most will do the bare minimum, just so they don’t get fired. Some will steal from you or your business. Others will make huge demands that are unjustified and unrealistic.
I believe that your employees will be your biggest source of frustration and headaches in your business. And if you try to become their friend, you are in for a big surprise. After all, you can’t discipline, fire or reprimand a friend. You lose your authority when your employees become your friends.
I’m not saying you should treat your employees bad. You shouldn’t. You should treat your employees well. And I’m not saying that people who have jobs are bad people. They’re not. I’m just saying that having employees creates a lot of headaches. That’s why so many small business owners would rather go it alone.
# 5 I Won’t Have to Answer to Anyone
This is another funny myth about owning your own business. When you own a business, you answer to A LOT of people. You end up answering to each one of your customers. You answer to the bank that loaned you money. In many cases, you end up answering to your employees. You answer to your spouse when you aren’t making any money. The list goes on.
# 6 My Products Are So Good They Will Sell Themselves
This one makes me laugh. People fall in love with a product so they start a business that sells the same product. What they quickly discover is that very few things ever sell themselves. Your real business is not your product or service. Marketing your product or service is your real business. If you think you can just open up shop and have people “flood” your doors and spend their hard earned money with you, you are in for a BIG surprise.
# 7 All I Have to Do Is Set My Prices LOWER Than My Competitor to Win More Business
If you go with the lowest price business model, you are in for a rude awakening. As a small business owner, you cannot and should not try to compete with the Wal-mart business model of having the lowest prices. If you have to rely on high volume to make a big profit, get ready to eat a big lunch! Instead, you want prices that are competitive, with a high enough profit margin to cover your overhead and advertising and still have money left over to generate a profit.
In summary, these are my top 7 myths about owning your own business. While owning a business of your own can be very rewarding, it is often very challenging. Many of us start our own businesses not knowing what to expect. I hope this article will help “open your eyes” about some of the myths of having your own business, so you can go into it with realistic expectations.
If you have ever owned your own business, I would love to hear from you. Please leave a comment below to tell me some of the myths you’ve learned about owning your own business. I look forward to hearing your story!