Every year, hundreds of thousands of entrepreneurs make the huge leap from working for somebody else to running their own business.
Launching your own venture is a leap into the unknown, and many new business owners discover that much of what they thought was true about starting their own business, turns out to be completely false.
There are many common misconceptions about running your own business, and being caught out by some of these can prove very costly indeed. To help you separate truth from fiction, here are 8 common myths about starting and running your own business;
Myth 1: If you build it, they will come
This line works well in the movies, but less so in real life. The best business idea in the world can still fail if nobody ever hears about it, so it’s vital to ensure that you’ve made adequate provision for marketing, both in terms of planning and budgeting.
Another danger is setting up a business to offer a product or service that actually isn’t in demand; if the market is already saturated, or if there simply isn’t enough desire for what you have to offer, you will struggle.
By conducting thorough market research before you begin, you can establish the actual demand for your service and plan accordingly.
Myth 2: You must be utterly unique
It can be discouraging to look at your market research and find that, actually, somebody else is already offering the product or service you want to bring to the market. Some would-be entrepreneurs pack up at this point – but this can be a mistake.
Whilst it’s important not to underestimate your competition, their mere existence doesn’t bar you from the market entirely, so long as there is sufficient demand to sustain you both – something that your market research should make clear.
A unique selling point that differentiates you from other business in your market is good, but don’t feel forced to narrow your business into an unsustainable niche simply to avoid competition.
Myth 3: You don’t need a plan
You’re excited, you’re confident, and you want to get on with the business of your business. If you don’t slow down and make a plan, however, you’re likely to wind up in some significant trouble.
A business plan is more than just a document to show to banks and other lenders; it gives you a framework for your business, a timeline to establish success, and sets measurable goals for you to aim for.
Taking the time to plan properly means that you can avoid falling prey to many of the common pitfalls that catch out new businesses. For help on putting together your plan, read;
- Top 10 business planning tips for start-ups
- If your startup doesn’t need funding, your business plan only needs these 4 things
- 10 Do’s and Don’ts of writing a business plan
Myth 4: The Paperwork is complicated
For every entrepreneur who takes the plunge, there’s another who hesitates because they think it’s just too complex. Whilst there are many factors to take into consideration, the paperwork for establishing a limited company can actually be quite straightforward.
You may not fancy tackling the 18-page form required to register with Companies House, but you don’t have to – you can use a formations agent instead. Such agents often also offer services past the initial incorporation, such as reminders for important filing dates, making it easy to keep on top of the paperwork.
Myth 5: You can set your own hours
Many look to their own business as a way to escape the office 9-5 and work fewer hours. However, becoming your own boss may not free you from those hours in quite the way you expect. After all, if something unexpected occurs in the middle of the night, you’ll be the one on call.
Starting a new business often means long hours, working on weekends and being called upon at all times of the day. Even those who understand this may not always realise the impact it can have on you and your family; make sure that you pace yourself and don’t allow yourself to get burned out.
The reward, of course, is that when you’re operating a business you love, it doesn’t feel as much like work!
Myth 6: You need lots of money
Whilst your own capital can be very useful in starting a new business, you don’t need to be able to fund your business entirely by yourself.
There are an increasing number of avenues for bringing funding in, from investment partners to crowdfunding websites, which make it easier than ever to start a business without a great deal of your own capital.In addition, the internet offers plenty of free resources that you can use to reduce your costs.
On the other hand, if you do already have your own capital, this isn’t a reason to ignore outside funding.
Many self-funded entrepreneurs fail because they think they can just apply for funds when their own cash runs out, but banks are much more open to lending when you don’t arrive with your pockets already empty.
Myth 7: Funding = Success
Those crowdfunding websites have given one particular misconception new prominence – that once your business or product is funded, it’s a success.
Unfortunately, this isn’t the case, and it can even be the complete opposite. In one notable failure, the makers of a mini-drone helicopter were unable to scale their project up to meet the unexpected levels of demand from their Kickstarter appeal – and as a result, were unable to deliver on their original promises, leaving thousands of customers disappointed and leading to the company folding.
Being realistic about the funding you need, having a plan for how to spend it, and tracking how it actually is spent, will help you to achieve the real success of your business – delivering to your customers.
Myth 8: Hard work guarantees success
It’s easy to think that if you just work hard enough, you’ll achieve success eventually. This can, however, be a blinkered view. If your work isn’t properly directed, your task can become Sisyphean – and just like that mythological king, you could see your work come crashing down like a boulder rolling downhill.
The key is to work smart; don’t shoulder every burden when you can easily outsource expert help, hire good staff who you can delegate to, and make sure that your plans and processes are efficient and effective.
Starting your own business is a challenging task – but it can be incredibly rewarding, and if you’re properly prepared for all it entails it could be the most exciting and enjoyable thing you ever do.
About the author
This guide has been written exclusively for ByteStart by Rapid Formations, a professional formations company assisting with start-ups of varying company structures, from LTDs to those with more bespoke business requirements.
More on starting and running your own business
ByteStart is packed with help and tips on all aspects of starting and running a small business. Check out some of our most popular guides;
- 5 things you must do when you go self employed
- 10 advantages running your business as a limited company has over being a sole trader
- How to set up a limited company
- How to choose the best online accounting software for your business
- 15 Questions to ask when hiring an accountant for your new business
Funding your business
- How to maximise your chances of securing a small business loan
- A Guide to ‘Alternative Finance’ – the new funding options for startups and small businesses
- Finding finance for your new business – funding advice for start-ups
- How peer-to-peer lending offers businesses a new funding option
- What to do when the bank says “NO”!
Money & Tax matters
- 10 ways small business owners can pay less tax
- Sole trader tax – a guide for start-ups and the newly self employed
- Dividend tax changes from April 2016 – A summary of the financial effects for small business owners
- ByteStart’s Guide to the main business taxes
- Corporation Tax – How to reduce your bill
Promoting your business
- Making your small business a BIG hit online – A Digital marketing guide for small business owners
- How to create business cards that make a big impression
- The “Magic 10” Tips on networking – how the experts build great networks
- A Practical guide to Content Marketing for small business owners and start-ups
- 10 Top tips for small businesses starting out with social media
- Which types of insurance must your business have?
- Becoming an employer – Your responsibilities when you hire staff
- Health & Safety compliance for small businesses – where do you start?
- A Guide to the National Living Wage for small business owners
- Why it’s vital you have clear ‘Terms & Conditions’ for your business