10 Myths About Small Businesses

Owning a business means you will have more free time.
With this myth, the exact opposite is usually true. Nearly all-new business owners find that they actually have much less free time when they open a business – especially in the beginning. Yes, your schedule will be more flexible but it will not be lighter. Being a business owner is more of a life style than a job. If you are going to be successful, you will probably need to dedicate most of your time to it.

You should not worry about a business plan.
People often mistakenly think that if they do not need to secure funding for their business, it means they should not worry about a business plan. Technically, you do not need a business plan in this situation, but you should still compose one for your own purposes. Creating a business plan will allow you to research your industry, organize your thoughts, and set your long-term goals.

To get customers you need to be cheaper.
New business owners frequently think that they need to have the cheapest prices if they want to get customers from competition. This is anything but true. Look at stores like Macy’s or Nordstrom’s – they do not have cheap prices but still attract customers. You do not necessarily want to overcharge your customers, but do not take a loss in order to offer cheap prices.

If you cook well, you should open a restaurant.
How many times have you overheard someone saying, “Wow, you are a good cook. You should open a restaurant”? Little do they know that opening a restaurant requires a lot more work than just cooking the food. As any small business owner will tell you, there are dozens, if not hundreds, of hurdles to opening a business. Then, after opening the restaurant, business owners typically end up hiring a chef and focus entirely on operating the business.

Good friends will work well together.
Every year, friends forming partnerships open hundreds of new businesses. Unfortunately, just because you are good friends with someone does not mean you will work well together. Forming a partnership with another person is a huge commitment. You need to be 100% sure that you will be able to work together before you take this big step.

Failure is the opposite of success.
In life we are all taught that failure is the opposite of success. However, the opposite is true when it comes to small businesses. Failure is actually an essential part of success. When you open a business, you are embarking on a new journey, and you learn through trial and error. It is unlikely that any business is going to be immensely successful from the start. There are going to be failures and bumps along the road.

Watch employees closely or they will slack off.
As we mentioned in last week’s tips for managing employees effectively, you cannot expect your employees to be productive 100% of their shifts. By allowing employees to have some time to breathe they will be more efficient when they are working on a project. The last thing you want to do is cause employees unnecessary stress by breathing down their necks.

If you build it, they will come.
Small business owners often invest all of their money into opening their business and forget to save funds for marketing purposes. People think, “if I open my store, people will naturally just come in off the sidewalk.” Uh, not true. You might get a few walk-ins if you have a great location, but it is essential to advertise your business if you want to attract new customers.

You can write-off everything.
Too many people learn this myth the hard way. If you take too many business deductions it sends a huge red flag to the IRS and could cost you thousands in unpaid taxes and fees. A general rule for write-offs is to ask yourself, “would I make this purchase even if you did not have a business?” If the answer is yes, then the item you are purchasing is probably not a business expense.

The customer is always right.
This is one of the oldest – and most incorrect – myths about running a small business. No, the customer is not always right. In fact, they are frequently wrong. If you always tell customers they are right, then you can wind-up losing thousands of dollars to customers who take advantage of you. There is nothing wrong with correcting a customer who is in error. However, you always want to be polite and professional in doing so.

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