On the average, almost half a million businesses are being created in the U.S. every year. The American dream of starting your own business is just too strong.
Unfortunately, not a lot will actually be successful. According to a study by Statistic Brain, more than 50 percent of startups fold up after just five years. If that is not grim enough, you’ll even be more surprised knowing that this number increases to 70% after 10 years.
The statistics are staggering. They show that more than half of the startups in the United States do not make it to even five years. It should be a sobering thought for people who want to start their own business and should actually give people a big warning sign that maybe they should give more thought about entering entrepreneurship.
This is not to say that people should give up on their dreams of becoming a self-reliant businessman. It is just prudent that those who want to build their own company should recognize the risks that come with it.
The problem is that people tend to go into business because of pre-conceived beliefs. They quickly find out that those beliefs are not only not true, but are also the eventual cause of their business failure.
To help you recognize these signs, here are some of the most common startup myths about starting your own business.
Startup Myth 1: If You Have a Great Idea, Everything Will Fall Into Place
Ideas can only get you so far.
Surprisingly, everyone has a great idea, it is the execution of that idea into something that consumers are willing to buy that is more challenging.
How do you do that?
It’s by gathering information. You get it by listening to your customers and gathering the necessary data and leveraging it in order to come up with sound business decisions.
If you carry out a thorough market research on your idea, it might amaze you to know that the end product/service that you finally came up with will be totally different from your original idea.
Startup Myth 2: If You Have a Great Product or Service, It Will Sell Itself
Having a great product or service is great and all but without anyone knowing about it, how do you think will it sell?
In fact, with what the Internet is today, you can even start an online business without any product.
As a newbie entrepreneur, you would have to be a jack-of-all-trades because with little resources and no income yet, you would need to stretch yourself into functions that you would normally not do. You would have to be involved in every aspect of your business from marketing and sales, to procurement of supplies, and selection of providers for operation needs like business phone systems, storage solutions, etc.
Coming up with a great product or service is just the first step, running a business so that people actually buy your product is another.
Startup Myth 3: You Have to Come Up with a Perfect Business Plan
While you were trying to come up with the perfect business plan, somebody else has already launched their own online business in just six weeks or even less.
The truth is having a business plan is important. It will serve as a roadmap or guide to your goals, strategy, and budget. However, there is also no such thing as a perfect business plan.
No matter how you want to control everything, there are just too many variables to consider. The market changes so fast that there is really no way of completely preparing yourself for what’s to come. It will be up to you, the business owner, to steer your startup and adapt to the environment you brought your business into.
Startup Myth 4: You Will Have More Time for Yourself
A lot of people go into business because they want to have more time with their family and friends only to find out that they have less free time than when they were employed.
As mentioned above, the business owner would have to be involved in every aspect of the business, especially in the initial stage of the company. With all the things to take care of, startup owners discover that they have to spend more hours in the office (which might be their home office) taking care of different things.
Some people just quit because they are not able to spend any time with their family, which could well be the very reason why they went into business anyway.
So, if you plan to start your own business, make sure that you know what you are getting into, or you will end up as another statistic on failed startups.
This is a guest post from Mark Dacanay. Mark is a Digital Marketing Professional who has been working with a B2B company, Ring Central, offering cloud-based services for more than 5 years. He is obsessed with anything about the cloud – the technology, not the fluffy stuff in the sky. You can reach him through Twitter.