Common Misconceptions About Entrepreneurship
Entrepreneurship is a popular topic. Apparently, everyone is an expert on entrepreneurship and has a firm opinion about the issue.
There are several myths and misconceptions surrounding entrepreneurship. People who want to become entrepreneurs are often discouraged by the rumors and myths they hear about entrepreneurship.
Misconceptions About Entrepreneurship
Here are some of the most common myths and misconceptions about entrepreneurship:
Entrepreneurs risk it all.
There is a risk in starting a business. There is no beating around the bush with this one.
Entrepreneurs need to deal with risk daily, but that doesn’t mean that they risk everything.
Entrepreneurs need to learn how to balance risks and rewards. They need to come up with strategize to minimize risk and maximize rewards.
Successful entrepreneurs tend to analyze all possible outcomes and identify potential risks to their business. They then come up with strategies and countermeasures to tackle these risks.
There is never going to be a scenario where there is no risk. Entrepreneurs need to be courageous and make decisions in difficult situations that will hopefully lead them to success.
This is why a lot of people never start a business because they think that there is too much risk involved.
Here are somethings that you should do when you start your entrepreneurial journey:
- Always make sure that your business is legal and adheres to all state and federal laws.
- Read the fine print on any document before agreeing to it.
- Communicate the perceived risk to your teammates so that you may come up with the best strategy to deal with the threat.
Entrepreneurship translates to you having a flexible schedule.
When people think of entrepreneurs, they assume that an entrepreneur has hundreds of staff taking care of the business while the entrepreneur relaxes on a beach halfway around the world.
Having a flexible schedule doesn’t mean that you have to work a few hours each day. What a flexible schedule means is that you’re able to work around your responsibilities.
Entrepreneurs don’t need to follow a nine to five schedule. Instead, they get to work on their business 24/7. Because of this, most entrepreneurs can’t stop thinking about their business.
Entrepreneurs are responsible for the growth of their business.
While entrepreneurs have a flexible schedule since they are their own boss, but that doesn’t mean that they have to sit in longer than all the other team members. They have to put in just as much effort, if not more than other teammates, all the while ensuring that the business has a clear vision and purpose.
Entrepreneurs get rich quick.
If you think that entrepreneurship is a get rich quick scheme, you need to do some research.
In a study conducted by American Express OPEN, entrepreneurs that paid themselves a full-time salary made around $68k a year. So, you can expect to do well for yourself, but don’t expect to be driving a Ferrari anytime soon.
Most entrepreneurs need to work extremely hard in the initial phases of their journey. They need to put in long, tiring hours only to keep their business afloat.
When the business gains some traction and stability, the entrepreneur still needs to keep working hard. He needs to be aware of the market and its competition. An entrepreneur’s job is never over.
Entrepreneurs need to work 24/7. They can’t flip a switch and call it a day.
Businesses that are an instant hit tend to have a lot of factors contributing to their success. Timing, luck, market research, unique selling proposition, market need, and a plethora of other factors need to be perfect for a business to become an overnight success (even a startup that’s an overnight success isn’t built overnight).
Entrepreneurs are born, not made.
Some people think that entrepreneurship is about genetics.
People think that entrepreneurs need to be born with a silver spoon in their mouths. Entrepreneurs also need to be 6’2 tall or more, have the physique of an athlete, and be as charming and charismatic as a celebrity.
The truth is that entrepreneurs, like other people, have a mix of traits. Some positive and some negative.
Most entrepreneurs have never been in a leadership position before starting their business. They need to learn how to manage and lead people effectively.
Not all entrepreneurs have an abundance of charisma or confidence. Some introverted entrepreneurs have to face their fears and address investors and crowds when their business needs them to.
Entrepreneurship is a skill that can most definitely be learned by putting in the proper time and effort and going in with the right mindset. By having a growth mindset, entrepreneurs can learn new skills and constantly improve themselves.
Here are the skills that all entrepreneurs should learn if they are serious about succeeding:
- Effective communication.
- The art of persuading a customer to make a conversion.
- Adapting technology early on and becoming an early adopter of new technology yourself.
- Using social media to your business’s advantage.
Entrepreneurs know the best time to start a business.
There is no best time to start a business.
Finding the right time to invest in a business is like timing the stock market. No one knows when the market is going to crash or rise, you can only make guesses and educated predictions.
Gurus and experts will often claim that they know the best time to start a business in a particular industry. But the truth is that they can only guess.
Colonel Sanders started selling fried chicken in the Great Depression, but that didn’t stop him from creating one of the most famous fast-food franchises on the planet.
Entrepreneurs can only take measures to minimize risks, but they can never wholly mitigate risks from their business. There is always going to be uncertainty.
No two businesses are the same. Even if the two are solving the same problems, the set of challenges they face might be completely different.
An entrepreneur needs to face the challenges that he might encounter and come out on top if he wants his startup to be successful.
Entrepreneurs become successful fast.
Time is one of the few things that you can’t buy. You have the same amount of time as everyone else, and it’s up to you to decide how you’re going to utilize your time.
When people see a successful startup, they think that the founders worked on the idea for a few days or weeks. The reality is quite different.
Entrepreneurs need to work on their businesses for months and even years in some cases before they see their business making any progress.
Success is only attained when a business founder has put in the due diligence required to start the business. Proper market research needs to be conducted before you choose an industry to penetrate. Your business needs to have a USP (Unique Selling Proposition) to differentiate you from your competitors.
Entrepreneurs need to be effective at scheduling tasks for themselves and their employees.
Even after all these preparations and planning, businesses can fail. Luck and timing also play a crucial role in determining whether your business will become successful or not.
Entrepreneurs don’t have a personal life.
Entrepreneurs need to work extremely hard. Starting a business from scratch takes a lot of hard work and dedication. But working long hours is not something unique to entrepreneurs.
Corporate employees often have to work long hours when they need to meet a deadline or when the fiscal year is coming to an end. If your manager sets up a meeting on a Saturday morning, you’re going to have to attend the meeting.
Entrepreneurs have to put in long hours, but they are their own bosses. They can always design a schedule that suits their needs.
Entrepreneurs need to manage their time effectively. Getting things done is the only way an entrepreneur is going to get some free time.
Entrepreneurs get funding exclusively from venture capitalists.
Every day, people think that entrepreneurs get funding exclusively from venture capitalists. There is so much noise in the media that entrepreneurs are raising more money than ever before that ordinary people get misguided. The facts are quite contradicting.
Around 80% of entrepreneurs start a business using their own money. Only 20% ask friends and family or banks or other financial institutions.
Startups that get funding from venture capitalists are in the minority. Some experts speculate that only 3% of entrepreneurs get funding from venture capitalists.
There are many reasons why raising money via venture capitalists is difficult.
Venture capitalists often have no experience in the industry they are investing in. They solely invest in an industry because it’s doing well, and it is predicted to do well in the future as well.
Since venture capitalists usually don’t have experience in the industry they are investing in, entrepreneurs cannot go to them for counsel.
Women entrepreneurs are often cast aside by venture capitalists. Women entrepreneurs are still in the minority when compared with their male counterparts. Venture capitalists usually prefer to invest in startups led and founded by men because they think that male-led startups a higher chance of success.
Convincing venture capitalists to invest in a business is also tricky. Venture capitalists want to get ten times the return on investment within three to five years. They expect companies to have a detailed plan on how they are going to provide them with the ROI they expect.
Entrepreneurs are young.
There is a big misconception that entrepreneurs need to be young and in their twenties. People think that entrepreneurs start businesses in their parent’s garage after school and work on little side projects that turn into these huge corporations.
According to a study conducted by Duke University, the average age of entrepreneurs is forty years. That’s the age when entrepreneurs start their first successful businesses.
You don’t need to be a certain age to become an entrepreneur.
Mark Zuckerberg started Facebook when he was just 19 years old. Bill Gates laid the foundation for Microsoft when he was twenty years old. Larry Page developed Google when he was twenty-five years old.
You might be thinking that only young people can start successful businesses, but stick a little longer.
Sam Walton built Walmart when he was forty-four years old. Ferdinand Porsche entered the automobile industry when he was fifty-six years old. KFC was formed by the colonel (Colonel Harland Sanders) when he was 65 years old.
Age is something that doesn’t matter when it comes to entrepreneurship. All it takes is passion, devotion, and hard work to become a successful entrepreneur.
Every entrepreneur is going to become successful.
Whenever we think of entrepreneurs, we think of the ones that made it. We never think of the ones that are struggling with their businesses.
Not every entrepreneur is going to be successful.
Around 50% of all businesses fail within the first five years of their inception. The longer a company stays afloat, the higher its chances for success.
For first time entrepreneurs, the rate of success is around 18%.
But there is hope.
Having a failed business doesn’t mean that you can’t start another one. Second-time entrepreneurs who had previously owned a failed business have a slightly higher rate of success of around 20%.
Failure in business is something that comes with the territory. You can’t be successful in every venture you choose to undertake, but learning from your mistakes will provide you with the knowledge to become more successful in your future endeavors.
Entrepreneurs like Mark Zuckerberg, Steve Jobs, Bill Gates, and others have revolutionized our world. They provided innovative solutions to problems that so many of us had and made an impressive amount of wealth.
Every day, people only think of these highly successful entrepreneurs when the word entrepreneurship is brought under consideration. Due to this reason, there is a lot of misinformation.
The majority of entrepreneurs are struggling and have to work extremely hard to get by.
After reading this article, I hope that a lot of your misconceptions about entrepreneurship are cleared, and you have a new perspective about entrepreneurship in general.