Young Upstarts

All about entrepreneurship, intrapreneurship, ideas, innovation, and small business.

10 Startup Myths Busted

by Caroline Revell

You don’t have to look far for ‘Start-Up Business Advice’ but some of them seem to be fake news.

To help you ignore the fiction, here are our top 10 myths busted:

1. You Need A College Degree.

This is one of the main reasons which stops entrepreneurs starting a business, thinking that they are under qualified or need a degree. Mark Zuckerberg is worth an estimated $34.8billion and had no degree before starting Facebook. Thomas Edison was a newspaper salesman before creating the light bulb and motion picture camera. But you will need a passion and be keen to learn fast as you go!

However, some experience will give you a head start! The best way is to work within the industry you are interested in before you invest all your time and possibly your whole life into your new venture. It would make sense for an aspiring confectionary maker to work in a sweet shop or factory first to get a feel for the industry and of course have the unique opportunity to be able to ask questions.

Gaining management and leadership skills is trickier but you’ll need them every day on your new business. There are some unusual ways to practise leading and organising other people, here are a few:

· Organising groups of volunteers at well-known music festivals and large events in your community
· Create an event of your own which requires you to hire and manage volunteers yourself
· If you have the money, hire someone for a few hours as a one off to get your foot on the management experience ladder, from cleaning your apartment or a helper toad content to your first website.
· Volunteer abroad long term on a smaller project where you have opportunities to work in every organisational aspect and manage others
· Sign up on a leadership course (link to British Council in Singapore which offers courses) where you can practise skills face to face and gain a qualification

2. It’s All About A New Idea.

An innovative product may be unique and nothing like you’ve seen before but you don’t need to reinvent the wheel to have a successful start-up.

The iPod wasn’t the first MP3 player.
Google wasn’t the first online search engine.
Lego wasn’t even the first building block toy.

As long as you are determined to be successful you have the basics for a successful start-up.

3. Quick Growth Is Essential.

Building a business is a marathon, not a sprint. If you try and force unnatural growth your business will burn out quickly. Unnatural growth often has high costs involved, high marketing budgets and staff costs can often lead to failure or at least sudden downsizing.

Zynga is a prime example of a business which grew too quickly. It started off with millions of downloads of its free games, then the company decides to grow and open its own data centres, spending $100million. They had brand new equipment but weren’t innovative enough to sustain their growth. They then shortly began laying off staff and shutting shop.

4. Sell Via Social Media.

Not all businesses are require a strong social media presence. A hospital bed supplier or community refuse service does not need to be posting Instagramable photos and tweeting every day to attract new clients and keep existing clients happy. Instead, they will rely on pitching competitively for their six monthly or annual contracts.

Think about the needs of your business. The money spent on social media is rising and it is not always profitable. Eric Schmidt, Coca Cola’s senior marketing strategist remarked following 62 million likes, ”we didn’t see any statistically significant relationship between our buzz and our short-term sales.” Ouch!

5. Professional Advice Is Valuable.

Many business owners crave a mentor or consultant, especially during turbulent difficult times but don’t be fooled. A good mentor should never trample your dreams, they should be excited for you and your business and want you to succeed. A mentor will try to offer ways round problems or affordable alternative options.

Consultants on the other hand will charge excessively by the hour. Typically a consultant will need at least two weeks to sit in and observe your business up-close before they are in a position to try to find the root of the problem, if they can find it at all.

Beware any consultant who finds a major flaw in your business, offers a worst-case scenario followed by a claim only they have all the tools to solve it for you at great expense. This is a well known technique used by the top global business consultancy firms!

6. You Need An Office.

You may picture your start up with a trendy office. A break room with couches and a ping pong table, keeping staff motivated with a fun work space.

Hold off on renting an office for as long as you can. The main reason start-up businesses fail is because they have too many overheads, renting an office is one of the largest overhead costs.

When your business is profitable enough and has grown to need an office, there is no reason you can’t have a lovely stylish workplace.

7. You Need A Big Market.

Niche markets can be as profitable as mass markets. If you have a more unique product and can gain the majority of a smaller market, rather than spending high amounts on advertising trying to gain a 1% market share of a larger market.

If you don’t have a product for the masses, don’t try and sell it to everyone. Figure out who your target market is and sell to them!

8. Hiring Staff.

Staff are one of the highest overhead costs for a business. Just like an office space, try and put off hiring for as long as possible. Their wage might be your profit.

Hiring is also a long and time-consuming process. Allow four to ten weeks for new staff to start from the day you post the job advert. It could be as late as six months before you realise they are not a great fit, or more sadly, incredible as they were for your business, realises the job is not for them and they take a job elsewhere, it works both ways!

When you hire staff for the first time make sure you have read through all of the local employment legislation. You don’t want to get caught in the middle of fiddly and costly technicalities. It may be worthwhile to hire an employment lawyer for a couple of hours each month during the first year of hiring to run through potential pitfalls before they occur so you can avoid them.

9. You Need a Business Plan.

There is a lot of controversy online about whether you need a business plan or not. While you don’t need a business plan to have a successful business, they can be useful to write out to give yourself a clear plan.

If you are looking to gain capital from venture capitalist or start-up bank loans. You will need one as they will want to understand what they’re investing in.

If you aren’t literate and don’t want to write a twenty-page business plan, then don’t. Richard Branson, the English business magnate of Virgin Group was dyslexic, rarely writing anything down.

10. The First Year Is The Hardest.

Upsettingly, it is not just the first year which will be the hardest for start-ups. While you will be more experienced the longer your business runs and more familiar with your business. You will also encounter new problems. According to Bloomberg, 8 out of 10 entrepreneurs fail within the first 18 months.British commercial insurers RSA reports 50% of new businesses close in their first five years, with 60% within ten.

Unfortunately for a startup, you have to work hard for years of business, it’s not just a case of making it through your first year and then smooth sailing.

 

Caroline Revell has worked for the break-through low cost British based volunteer-sending organisation Original Volunteers in the UK since its inception in 2006, incorporated 2008. Caroline talks to many graduates looking to volunteer to gain experience before starting careers or their own businesses. She has also mentored overseas project staff and created practical train-the-trainer workshops for project staff around the world.

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This is an article contributed to Young Upstarts and published or republished here with permission. All rights of this work belong to the authors named in the article above.

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