There’s been a sort of mythology surrounding entrepreneurs in the United States. A young dreamer, tired of slaving away for an unappreciative employer, decides to strike out on their own with nothing to their name but their billion dollar ideas. After the montage of early struggles and successes (you know, like in every movie about an entrepreneur, ever) they finally overcome the adversity of the marketplace and make their indelible mark on the future of business or technology or whatever.
This being the case, it’s no surprise that a lot of people are more aware of the glamorous myths surrounding going into business for yourself than the real conditions that entrepreneurs typically face.
In keeping with this week’s theme of ideals in business, we’re going to be talking about many of the misconceptions that exist about entrepreneurship and the truth behind those misconceptions.
The first thing that everyone should be aware of is that there is a lot of risk associated with starting your own business. While you might think this is fairly obvious, there is a misconception about the nature of that risk. It’s not a risk like you take when you shoot craps or play the lottery.
When you decide to start a business, you’re risking all the capitol that you’ve gathered for staffing, production, rent on your office, etc. on the merit of your business plan. Now, unlike the lottery, in which everyone has an equal chance of winning, an entrepreneurial venture might be doomed from it’s very inception. You won’t know if what seemed groundbreaking on paper will actually translate into money in the bank.
Now, as I’ve never started my own business (unless you count all that lemon-aid I sold as a kid), here’s a New York Times article from small business owner Jay Goltz to help debunk some more entrepreneurial misconceptions. In the article, Jay goes over some of the most common phrases that he’s heard from entrepreneurs that reflect many of the falsities associated with going into business for yourself.
One of the best phrases that he featured has a lot to do with the risk that I was talking about earlier “I’m going to start my business as soon as I raise the capital.” While you’ll certainly need resources to get a small business started, it’s a mistake to think it’s as sure a thing as this phrase suggests.
Sure, your idea could get a lot of notice, get crowd funded or kick started or even taken in by some sort of Daddy Warbucks-like investor, but that’s pretty rare. According to Jay, “But the reality is, most new entrepreneurs get money from their own bank account, their parents, their 401(k) plans and anyone else they know.” Entrepreneurship is about trying to make a success out of your hard work and ideas and should not be taken lightly. If your little company goes belly up, it’s generally your little buns that will be toasted.
While creating your own company can offer great rewards, both personal and financial, you should get into it for the right reasons and be aware of the risks involved.