The Myths of Starting a Business

A couple days back I bumped into and subscribed to a new blog simply named Personal Finance Advice. This is not unusual, I have close to 200 blogs and sites in my Bloglines account and I add and delete almost daily.

What hit me was a good message from Amy Fontinelle. She wrote regarding the “need-to-knows” about starting a business.

“Who hasn’t fantasized about quitting their job and striking out on their own? The desire is perhaps especially strong for Americans, since doing it yourself and creating your own successes are so ingrained in our value system.”

Here are her five, which you can click through to read more about.

Then, let’s take a look at mine.

From Personal Finance Advice:

  • Myth #6: Being self-employed will make my life easier
  • Myth #5: I’ll get to be my own boss–I won’t have anyone breathing down my neck anymore
  • Myth #4: I’ll have more vacation time and get to set my own schedule
  • Myth #3: I’ll save money on taxes by starting my own business and incorporating
  • Myth #2: I’ll get to keep more of the company’s income if I start my own business
  • Myth #1: I’ll earn more money if I start my own business

Not bad. I may have a problem with Myth #3 because a lot depends on the type of business and the number of employees you’ve started, however altogether it’s a good primer.

Here are some additional points that I thought I’d forum. Like Amy, I too will list these as myths:

  • Your family & friends will always understand the time commitment, even when no money is coming in.
  • Your friends’ constructive criticism is never out of jealousy
  • Your college degree is all you need to secure the knowledge entrepreneurship requires
  • Your lack of a college degree will ensure your business fails
  • Anyone that has tried and failed automatically must be trusted because “they’ve done it”.
  • If the majority of your peers call the idea silly, it probably is.
  • You have to spend money to make money (this one is borderline, but a lot can be earned by charging people for your knowledge on something)
  • Risk is always bad.
  • You should liquidate all of your possessions to start a business because you believe in it so strongly.
  • No competition today equals no competition tomorrow.
  • Distributors, lawyers, manufactures or other vendors will always keep your trade secrets confidential (see how to get a provisional patent).
  • Your co-founder will always have the same objectives and is as ethical as you.
  • Having a well written business plan guarantees a lender or inventor will supply you with capital.

I am positive that there are other pitfalls to watch for. The intent is not to scare a would-be entrepreneur into staying at their day job. For that matter, we are also not trying to force you to analyze everything to the point of not starting a business. However, the more you know on the way in, the more prepared you will be.

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