What Myth are you buying into?

When I completed my tour of duty at my corporate cubicle farm a few years ago, I was going to take a totally different direction…escape the rat race and buy or start my own small business.

Despite that conviction, I will admit that I fell for one of the more pervasive myths that are out there – the astoundingly high percentage of business failures!  I think part of the reason that people easily believe the idea that 80+% of businesses fail in the first couple of years is that you feel like you can support it anecdotally by just driving around.  I remember a wrap sandwich place that opened up about the time I started considering a change.  It had a great location – the product was different and interesting, the price was reasonable and the service was good. 

They didn’t make it 6 months.

I still feel bad for the owner – I didn’t even know his name, but I’m sure this wasn’t the outcome he was planning for.

Ultimately that wasn’t the reason I didn’t buy or start something at that point (I went back into corporate consulting), but it certainly impacted my thought process.

I was reminded about all of this by an article that I saw on the NFIB (National Federation of Independent Businesses) website:  Debunking Small Business Myths.

I don’t agree or relate to everything they cover, but there were several that I definitely recognized as things I thought about and that I hear people talking about a lot.

It takes money to make money. 

There’s no point in starting a business until I have a huge nest egg – I’ll just stay in the dead end job for a few more years and then I’ll start that dream business.

Although it’s undoubtedly easier to start something up when you have money, there are literally thousands of small businesses in Kansas City area alone that started out with next to nothing.  It takes hard work, diligence, commitment and a willingness to do without for a while, but you can obviously be successful starting from scratch (or close – I know some bankers you can talk to if that will help…).  Nothing ventured, nothing gained!

80% of small businesses fail in the first 2 years.

We pretty much covered this above, the actual number of failures that I had found previously on the SBA site was ~56% failure after 4 years (which corresponds to the research in this article).  Obviously that’s still a big number, but a lot of those closures probably didn’t ‘fail’ as much as the owner decided that the work wasn’t worth the effort – they were never able to get in control and get systems in place (they probably didn’t work with their local, friendly business development firm…!).

Small firms only create a small share of new jobs.

I’m not sure I would have called this a myth, but the statistic that small firms (under 20 people) create somewhere between 60% to 80% of new job growth is pretty amazing.

The Health Care Crisis is created by the media.

This might have been a valid myth a couple of years ago – I’m sure a lot of politicians worked hard to spread that story, but I think the last couple of years has thoroughly destroyed the idea that the health care crisis isn’t real.  Listen in on almost any discussion (corporate or small business) and you’ll likely hear someone talking about how they can’t afford their health insurance and it’s having a tangible negative effect on their business.  There’s something wrong when people are making long term strategic decisions to account for health care costs…!

What myths do you battle?  Are you making decisions based on things that aren’t actually true?  We didn’t cover any marketing, sales or Internet related topics here – I can think of quite a few things that might fall into that category.

What about you?  Let me know what you think.

Shawn Kinkade  www.aspirekc.com