There are a wide variety of misconceptions about entrepreneurship you’ll encounter when you’re considering whether to start a business. Some paint a dire picture that can make you think every small business is doomed to fail (and gobble up your life savings in the process). Other small business ownership myths make it sound like you can make a fortune overnight working only when you want to.
The reality of being your own boss in today’s economy is somewhere in between these extremes. Let’s compare some common business myths vs. realities of entrepreneurship to clear up some of these false beliefs about business ownership, and avoid the new business mistakes these misconceptions can often lead to.
Myth #1: Starting a business means instant financial freedom.
You absolutely can make a living (or even make millions) by starting your own business—but that kind of revenue isn’t going to start coming in right away. The viral videos you’ll see online of new businesses that made six-figure revenue in their first month aren’t necessarily complete lies, but they’re deceptive in the sense that this kind of fast growth is exceptionally rare.
It’s also important to remember that you likely won’t keep all of the revenue from your business for yourself, at least not at first. It’s not uncommon for entrepreneurs to run their business for a year or longer before they start paying themselves a salary. Instead, they reinvest their profits into marketing, equipment upgrades, or other areas that can further grow the business. Because of this, even a well-run business poised for long-term success may not seem profitable on paper—and may not make its founders much, if any, income—for years after it starts.
The reality: Success (and profit) requires persistence and long-term strategy.
There are two small business myths at play here: the idea of overnight success, and the perception that business ownership automatically translates to profit. While it can be disheartening to pour your passion, savings, and free time into something without getting much back, debunking myths about entrepreneurship and success can also be freeing. Just because you’re not turning a profit right away doesn’t mean your business is a failure. In fact, that’s perfectly normal, and can be healthy if the business is still showing signs of positive growth.
Of course, this also begs the question of how an entrepreneur is supposed to survive while they’re waiting for their new business to become profitable. Some people keep their day job, or take a part-time job that can work around their business schedule, until their business can support them. For others, the solution is to live off of your savings or get support from friends and family. You may find that you can pay yourself at least some kind of wage sooner than you expect, too, but if you’re expecting the business to deliver big profits right away, you’re likely setting yourself up for disappointment.
Myth #2: Starting a business means investing a ton of money up front.
This is one of the top myths that stops people from starting a business. There’s the perception that you need at least a six-figure budget to even get your business off the ground—and probably more, if you want to start something like a restaurant.
There’s an element of truth in this myth. Opening a new brick-and-mortar business can be expensive. But one of the main misconceptions about starting and running a small business is that you need to go this expensive route from the start, and that simply isn’t true. For example, if you want to start a restaurant but don’t have the capital to buy one, you can start with a smaller investment like a food cart or food truck. This gives you a chance to test and refine your concept while you start bringing in revenue, which you can invest into a full restaurant down the road.
The same concept can apply in just about any niche. If you want to sell products, you can start with an online store or booths at farmers markets and festivals. Many service-based businesses can be run out of your home, too, until you’ve brought in enough revenue to invest in a storefront.
The reality: You can bootstrap your way to success.
There are plenty of examples of successful companies that were started on a shoestring budget. If you’re looking for some inspiration, the U.S. Chamber of Commerce has a list of well-known businesses that were started with less than $10,000. Many of these were founded with less than a grand, including household name brands like Hewlett-Packard (started with $538), John Paul Mitchell luxury hair line (started with $700), and Plenty of Fish (started with $500).
Myth #3: I can do everything in the business myself.
Business owners often do wear a lot of hats. When you first start, it’s common for the owner to personally handle everything from financial management to long-term strategy to day-to-day operations like marketing and serving customers. This is often a matter of necessity, especially those who are bootstrapping and don’t have the budget yet to hire employees.
That doesn’t mean this is sustainable in the long-term, though. As the business grows, it’s increasingly necessary to find ways you can automate or delegate tasks. If you don’t, you’ll likely put yourself on the path to burnout. This kind of solopreneur mindset can be damaging for the business, too, preventing it from reaching its full potential because you’re too busy putting out everyday fires to focus on the big picture.
The reality: Even solopreneurs need a support network.
Some businesses are one-person operations for their entire existence—but that doesn’t mean the entrepreneur is doing things on their own. Even solopreneurs who don’t have employees rely on others to drive their success. This can include mentors and coaches who help them unlock their full potential, a support network of other business owners they can turn to with questions, or paid services you hire to take over things like marketing or bookkeeping.
The bottom line is that no entrepreneur is an island. When you’re first starting your business, take a step back to consider your strengths and weaknesses as the owner, and identify the functions or areas you’ll first look to delegate to others once you have the resources to do so. Along with this, consider who you can include in your support network, from friends and family to other professionals whose guidance can help you on your path to success.
Myth #4: I’ll have more free time as a business owner.
For many, the main allure of being an entrepreneur is that you’ll have the freedom to work whenever you want to and more flexibility to adjust your work hours around other interests or responsibilities in your life. However, while you technically do set your own schedule as a business owner, the full reality is often a bit more complicated. One of the unfortunate truths about being your own boss is that business owners often work more hours than the average employee, one reason that maintaining a healthy work/life balance is often one of the greatest entrepreneurial challenges.
Now, it’s worth mentioning that every business is unique and some are well-suited to working part-time hours. However, even those businesses that are often cited as “passive income” like dropshipping or selling online courses require some kind of time commitment to manage and grow into something that will generate enough revenue to live on.
The same is true when it comes to flexibility. In some businesses, your work schedule will be entirely up to you. On the other hand, if you run a service business like tutoring or consulting, then your schedule will be dependent on when your clients are available and need the service you offer. The same goes for restaurants, brick-and-mortar retail shops, and other customer-driven businesses. To be successful, you need to be open and available when your customers are.
It’s also important to remember that these customer interactions aren’t the only things it takes to run a business. There is a lot of behind the scenes work involved in business ownership, from ordering supplies and inventory to bookkeeping and marketing. Once you have revenue coming in, you can hire people to take care of some of those things for you. At the very start, though, many business owners do many things themselves, and that often translates to long hours.
The reality: A successful business is a big time commitment.
As an entrepreneur, you often get out what you put in. Committing just a few hours a week may be enough to keep the doors open, but you likely shouldn’t expect the business to grow quickly or bring in much revenue if you don’t treat it like a full-time job.
Before you take the entrepreneurial leap, do some research into the type of business you want to start to determine how much time you’ll realistically need to devote to it in order to succeed. One exercise that can be helpful is to list all of the tasks you’ll need to tackle in a given week then write out a mock schedule to get a rough idea of what time commitment to expect.
The good news is that, like we mentioned earlier, every business is unique. There are types of business suitable to just about every schedule and circumstance. If the first one you think of doesn’t feel like it will be feasible, keep your options open, or consider what adjustments you can make to fit that venture into your lifestyle.
Myth #5: I need to wait for the perfect time to start my business.
Harlan Sanders bought a roadside motel in 1930—the middle of the Great Depression—as a 40-year-old who had tried several failed careers. That was the origin story of KFC, today a global chain with more than 30,000 restaurants. Other Depression-era business startups include Westin Hotels, LEGO, Rubbermaid, and Allstate insurance.
You’ll see the same if you look at any period in history when economic conditions seemed absolutely wrong for entrepreneurs. Patagonia and Microsoft were both started during the oil crisis of the 1970s. Airbnb, Beats, and Uber are just a few of the successful startups to come out of the 2008 recession. On the other side of things, there are countless businesses that started during economic booms but are now forgotten because they quickly failed. The current state of the economy can absolutely affect how a business performs, but it’s not synonymous with either success or failure.
The same applies from a more personal standpoint. Some entrepreneurs are lucky enough to have ideal life conditions when they start their business—but that’s true less often than you might think. In the case of Airbnb, for example, the founders started the business because they were struggling to pay their rent.
The reality: There is no such thing as the perfect time.
It’s impossible to control or predict what happens in the broader world. The truth is, if you wait for ideal economic conditions to get started, you might find you never start your business at all. The same is true if you wait until you feel 100% ready to become a business owner. Granted, if your life is in complete disarray and you have no money in savings, that might not be the most conducive environment for a new business—but you’ll also find examples of successful businesses started with someone’s last five bucks.
It is smart to be prepared, and you should take the time to research your market and do some planning before you jump in. The trick is not to get stuck in “analysis paralysis”, where you spend so much time planning your business that you never actually start it.
