The internet is a great place for sharing information. And misinformation. I hear small business myths all the time. Bogus “facts” about running a startup that are repeated endlessly online. Here are some of my favorites.
- Business Plans Are No Longer Needed
“Angels invested in my business and all I had was a one-page, Executive Summary; I never prepared a business plan.” So, what? I once cashed a lottery ticket. Exceptions do not make the rule. You cannot get an SBA loan without a business plan. The SBA and most investors want to see that you have taken the time to strategize about product, market, customers, competitors, funding, and so on. Business plans may not always be closely scrutinized, but they remain a prerequisite.
- Websites Are Obsolete
According to this small business myth, consumers interact via mobile apps, social networks, and text messages much more than they do with company websites, even e-commerce ones. Yes . . . but they still engage with websites. Websites, while no longer a company’s sole online destination, remain a part of the marketing “ecosystem.” Reports of their demise are premature.
- Always Patent Your Ideas
As we learned at Keurig, well drafted and market driven patents can be worth their weight in gold. Other patents, not so much. I once had a pre-revenue, startup client (“Newco” for present purposes) with 7 granted and 12 pending patents. Impressive. Yet, since the value of a patent is usually based on the potential future economic benefits to its owner or licensee, those benefits must be demonstrable, not simply imagined. Newco never got past the imagination stage.
- Anybody Can Be a Successful Entrepreneur
This is one of my favorite business myths. Joe-N-Eintofive has been a successful senior executive at BigCo for the past twenty-five years, but he just knows he’s an entrepreneur at heart. When opportunity knocks, Joe jumps ship and takes a job with an underfunded startup. It doesn’t work out. It seldom does. I’ve written about his before. Entrepreneurs tend not to be followers of conventional paths/wisdom. They seldom spend decades collecting plump paychecks from large corporations before getting started.
- All Sales Are Good Sales
No, not even close. I’ve seen numerous startups chase large, somewhat suspicious, foreign or bulk-bidding transactions in the hopes of landing much needed revenue. Established company pricing, distributors, and/or sales channels were ignored in the hopes of capturing these elusive opportunities. Little good resulted. Not unlike spending 90% of your customer service time helping clients representing just 10% of your sales. In short, some sales are not worth pursuing.
These are but a few of the small business myths I encounter. In my next blog I will explore a few more. I am also available to chat. Drop me a line. Worldwide Local Connect helps entrepreneurs and small business owners succeed. We can help you as well.