Starting a business used to be a fairly straightforward process. It may not have been easy, but it certainly didn’t subject entrepreneurs to a deluge of competing opinions like those faced by today’s business owners. There are some persistent truths which are rarely challenged due to their successful track record in successful companies. There are also many misconceptions about starting a business.
1. Business Plans aren’t Necessary
There are three things we know about startup business plans: one, you will write one eventually. Two, you will come to rely on your business plan, no matter when or why you write one. And three, you will throw the first business plan you write in the trash. You need to be prepared with a plan that is both flexible and simple.
2. Business Plans Shouldn’t Change
Not only do business plans change, they must change in order to meet the needs of your startup. Your company is a startup, and that means rapid growth, numerous failures and a lot of evaluation and re-evaluation. If your plans never change, you’ll never be able to take advantage of what you’ve learned, nor will you be able to avoid already-experienced failures or capitalize on successes.
3. You Need Investors
Crowdfunding, micro-loans, web-based pre-orders for rapid prototypes and ad-hoc partnerships are four of the newest and hottest alternatives to traditional loans or equity placements as a means of raising capital.
4. You Need Capital
The related ideas of starting a company by amassing a big pile of money and leasing an office are, in a word, obsolete. The fastest and most reliable way to get a company going now is to find customers, not investors.
5. The Product has to be Flashy
Some of the most boring businesses in the world are also some of the most profitable. Don’t presume starting a business requires you to be featured levitating in a rock garden with your product on a trendy magazine cover.
6. A One Man Band is King
One person simply does not have the hours or the strength to create a company and lift it high enough to get it off the ground. Done properly, delegation is one of the most powerful skills an executive can have. It will magnify your creativity and your ability to implement your vision.
7. Someone Might Steal My Idea
Like talent, ideas must be combined with something to make them valuable. Talent requires discipline. Ideas require hard work. Without hard work, even the most brilliant idea is really nothing more than a “what if” question. It’s also likely someone has already thought of your idea anyway and abandoned it because it was too hard. Be the one that makes it happen instead.
8. I Don’t Need an Attorney Yet
The sooner you get competent legal advice on your ideas, the better. At the very least, you will have a record of your ideas, plans and related details in the hands of someone well qualified to write, evaluate, and sign off on your initial business plan.
9. I Don’t Need an Accountant Yet
Your accountant should sign the check to pay your attorney. Competent professional financial advice is crucial to a startup’s success. Even if your plans don’t involve complex financing, the basics of taxes, business insurance, payroll and making sure the light bill gets paid are all things that will be at the top of your list for some time.
10. Everyone Will Respect Me
Everyone was taught from a young age they should “get a good job and work hard.” This conditions them to believe starting a business is a frivolous pipe dream. They will continue to believe that right up to the moment when it is no longer a pipe dream. So any delusions you have about being congratulated should be abandoned as soon as possible.
11. I’ll Strike it Rich
A well-executed and simple plan is more likely to succeed than not, but you have to give it time and stick with it. Believing you will announce your big idea and be showered in cash is the fastest way to discourage yourself. Make a good plan and implement it. The rest happens by itself.
12. I Have to Take a Big Risk
Starting a business is a risk to begin with, because you are already risking failure. From that point forward, however, the one thing that separates the successes from the failures is the ability to avoid unnecessary risk.
13. I Have to Hurry
One of the most important virtues is patience. Farmers make money by mixing patience, water and seeds. You will make money by mixing patience with your raw materials as well. Take your time and let your plan work.
14. There will be a Big Win
Small business success is a series of wins, each a little bigger than the last. Be aware of your victories, but don’t disappoint yourself if it doesn’t play like a Hollywood script. Business owners are the ones that make things happen that otherwise wouldn’t.