I recently came across a very interesting article in the New York Times about the misunderstandings of starting a small business. There are many fears to venturing out and starting a small business of your own. Hopefully after reading over this list, you will have a better idea of what is true and what is false when it comes to opening a business.
1. All new business’ have a 50% chance of success
Studies find that the failure rate of new businesses is about 50% after 5 years. However, each individual business’ odds are different and a business plan is essential. A well thought out and strategic plan will dramatically increase your chances of surviving.
2. Innovation is key
While innovative companies such as Facebook, Apple, and Google have had tremendous success, most new start-ups take an existing idea and try to make it better. Taking something already around and making it more attractive, affordable, or efficient is a formula for business success.
3. You can control your own destiny (and set your own hours too!)
Being in business for yourself will allow you to be responsible for the success of your company, for better and for worse. That being said, there are also many external factors that can affect your business’ performance, such as economic downturn, competitors, and market conditions. Owning a business is a non-stop job that can entail many hours and a lot of stress.
4. Start-ups receive most financing from venture capitalists
The reality is that most entrepreneurs get money from somebody that they know, or often from their own personal assets. Banks don’t normally finance start-ups either.
The key to having a prosperous small-business is having a successful business plan that avoids these costly mistakes. Entrepreneurship can open doors that wouldn’t be possible otherwise. Do you think the likes of Bill Gates and Steve Jobs would be household names without the creation of Microsoft and Apple?
For more advice and insight on entreprenuership, check out our "International Entrepreneurship" and "Identifying and Measuring Drivers of Global Entrepreneurship" online course modules!