Today, politicians and the press are fully aware of entrepreneurship’s crucial role in economic prosperity, innovation, and growth. However, as the popularity of this topic grows, many false and incorrect beliefs have taken hold in the minds of individuals.
Approximately one in every 18 people across the world runs their own business. Some start as a small business venture to pursue opportunity, while others — particularly most entrepreneurs in developing countries do so out of necessity because it is the most promising way to make money in their area.
Every would-be entrepreneur can benefit from understanding what the job entails, regardless of where they’re starting or why they’re doing it. However, it’s always a good idea to begin by debunking the numerous fallacies and misconceptions around entrepreneurship. They might assist startup companies in figuring out what’s truly required to succeed with their fledgling firm.
The truth is, that entrepreneurship is hard work. It’s not for the faint of heart. There are many myths about entrepreneurs, and in this blog post, we will dispel seven of the most common myths about entrepreneurship.
What Is Entrepreneurship?
According to Investopedia, an entrepreneur is a person who creates their own business. One must also have many innovative ideas, be an inventor, and know how to set up a firm from the ground up to fulfill the requirements. To lower the chance of failure, beginning entrepreneurs should be aware of the difficulties of developing a brand and take measures.
Most entrepreneurs make a significant contribution to the economy’s growth. They must anticipate the demands of consumers, recognize market gaps, and elicit demand for new products and services. They must also have the ability to introduce innovative, relevant solutions. They should also be able to expand their enterprises and turn a profit and survive in today’s extremely competitive market.
Major Entrepreneurship Traits One Must Possess
- Confidence: An entrepreneur must be certain in their talents to start from the bottom and develop a successful brand. To inspire their employees and other folks around them, entrepreneurs must first believe in their skillset (and own it).
- Passion and Motivation: Entrepreneurs who lack passion are certain to fail. To achieve the success you want, you must be completely dedicated to your work and how you do it.
They must anticipate the demands of consumers, recognize market gaps, and elicit demand for new products and services. They must also have the ability to introduce innovative, relevant solutions.
- Good Leadership Skills: It’s impossible to run a company by oneself. For your firm to succeed, you need a team of driven workers and excellent experts, and the ability to lead and inspire them. Otherwise, everything you do and sacrifice will be for naught.
- Being Able to Think Quickly: There are many other successful entrepreneurs out there, and you must be proactive to surpass your competitors. Keep your mind open and pay attention to those around you. Think about potential threats to your business and possible responses that you could apply.
- Competitiveness: There are hundreds of other firms competing for your business in every industry. As a successful entrepreneur, you must continually consider new ways to improve products, services, or your firm to stand out. Find out what your target customer wants and prepare in advance so that competitors don’t catch up.
- Creativity: The most successful entrepreneurs have one thing in common: creativity. Always explore new methods to generate excitement and anticipation for your business.
The Entrepreneurship Myths
The word “myth” refers to a thing or individual that does not exist but is believed to be real. Myths become limiting beliefs that paralyze and generate fear of failure in entrepreneurship. However, the following are the most common myths about entrepreneurship:
1. You Need a Great Idea to Develop Your Business
Everyone has a business idea, but they don’t believe it’s good enough. This is because individuals frequently compare new ideas to well-established firms. However, no business ever springs fully formed from the ground. Every great concept begins as a modest idea and may develop into something greater over time.
Did you know that Sir Richard Branson’s Virgin Group began as a small mail-order company? The firm would take orders via the mail and send music recordings to clients. In those early days, it’s doubtful Sir Richard Branson knew how big the company he started would become today.
The truth about entrepreneurship is that an idea does not have to be perfect from the start, nor does it need to be unusual. For example, in a study of 100 highly recognized startups, only 12% of the founders credited their success to an exceptional or unusual concept. The other 88% of respondents said that their success was due to the superb execution of a simple concept.
Given all this, the pressure individuals put on themselves to develop a revolutionary idea is unwarranted. Many successful businesses don’t start that way, and many great entrepreneurs only improve on an existing concept better than others have. Put another way; you don’t need a brilliant concept to start a firm. All you need is a solid concept to start with.
2. Entrepreneurs Are Not Made; They’re Born
Phil Knight, the founder of Nike, did not realize he wanted to be an entrepreneur until he enrolled in business school for his master’s degree. During a class, the instructor urged students to develop a new business that Phil Knight decided he wanted to pursue a career. Was he born an entrepreneur? No! He didn’t start working in the business until his later years.
Furthermore, this is one example of how someone becomes an entrepreneur, but it wasn’t always something they had a strong desire to do. Despite this misconception, however, the myth that entrepreneurs are born persists. The fact is that there’s no proof that some people are natural-born entrepreneurs while others are not.
According to several studies, entrepreneurs come from both entrepreneurial and non-entrepreneurial backgrounds. Over half of the entrepreneurs polled in one study, which included more than 500 company founders, were the first to start a business in their families’ background. If entrepreneurship is hereditary, you would not expect this proportion to be so high. Therefore, it’s clear that you aren’t born an entrepreneur; rather, you become one.
3. Age Matters
When Zoe “Zoella” Sugg was in her early twenties, she made approximately $20,000 a month from her social media small businesses. When Fraser Doherty was just 14 years old, he started a small business (Jam-making), and by the time he was 18, it supplied jam to Waitrose.
There is never a shortage of media attention on young entrepreneurs since the younger they are, the more interesting the story. On the other hand, these studies distort individuals’ perceptions of the relationship between age and entrepreneurship. The truth is considerably more diverse.
Doris Fisher, who was 37 at the time, co-founded Gap. Ruth Handler created the Barbie doll business when she was 42 years old. Giorgio Armani did not find his business until he was 41 years old, and a pharmacist in his mid-fifties created Coca-Cola.
Individuals found the majority of businesses in their late thirties to mid-forties. In reality, the average age of a first-time founder is 45. On the other hand, the media is drawn to younger entrepreneurs because they are more newsworthy. As a result, you will hear considerably more about the twenty-something billionaire than the mature businessperson.
Does this imply that you should put off starting a business until you are 35–45 years old? Not necessarily. Starting a firm when you are young has certain benefits. You have fewer duties and are more adaptable. However, you’ll have a mortgage and a family to consider when you’re older, limiting the risks you can take.
The benefit, of course, is that you will have more expertise and experience, a stronger network of connections, and potentially more cash to put into the business. The advantages and disadvantages of each age group vary, but one of the most significant benefits of beginning now is youth’s adaptability and energy.
4. Entrepreneurs Love Risk
Another frequent myth is that entrepreneurs like taking risks and that you must be a big risk-taker to start your own business. However, business owners (small business owners particularly) aren’t much different from the average person regarding risk preferences.
The perception of risk from an entrepreneur’s perspective is the same as anyone else’s when leaving their automobile unlocked while they go shopping. There is, however, one exception: entrepreneurs tend to be considerably more confident and optimistic. They are extremely confident in their ability to profit from a business opportunity after conducting market research.
On the other hand, other people are more likely to perceive threats where entrepreneurs see an opportunity. Entrepreneurs are not risk-taking enthusiasts on that basis. They believe that they can transform risk into profit and rapid growth if they work efficiently.
5. Nine Out of Ten Businesses Fail
The notion that nine out of ten businesses fail is one of the most prevalent misperceptions in entrepreneurship. Fortunately, it’s a bit of an exaggeration. It’s too simple and overlooks an important aspect: if you take away this element, you’ll forget a far more strange reality: all businesses ultimately fail over time.
The world’s oldest company, the Japanese firm Kongō Gumi, is a good illustration of this phenomenon. After such a long existence of 1,400 years, the firm came to an end in 2006 — a remarkable life span for a business considering that the typical lifespan of one is 40–50 years.
Given the length of time involved, the ultimate end of all business organizations, which should not bother you, underscores an important point. When you talk about business organization failure rates, you must also consider a time component. A more telling statistic should be able to show or tell how many companies go out of business over a specific amount of time.
According to research by the University of Sussex and Barclays Bank professors, only one in six firms (16.98 percent) fail within the first six years. However, this percentage rises over time, but 30 percent of the original firms are still operating after six years.
Thus, when next someone tells you that nine out of ten businesses fail in the first year, ask them how long they have been in business. However, it’s worth noting that statistics are informative but not always instructive. Thus, your chances are greater than you might imagine.
6. Starting a Business Is Easy
Starting a company is not always perceived to be simple, but many people underestimate the work involved. Entrepreneurs typically work long hours and don’t make much money at the outset of a business. According to statistics from the United Kingdom, entrepreneurs put in an average of 52 hours each week. That’s a 63 percent increase in longevity over regular workers.
In the United States, renowned investor David Rose claims that he has never encountered an entrepreneur who works fewer than 60 hours per week. Starting a company is an ‘all-in’ game, according to him. You can’t perform tasks half-heartedly. It will help if you fully commit yourself once the engine starts up.
In addition to their lengthy hours, budding entrepreneurs generally earn little or no money in the early phases of their firm. Innocent Drinks’ founders, on the other hand, went a year without earning money. They spent four years earning $40,000, the same amount they had left at their prior corporate jobs.
The paradox is that entrepreneurs are generally happier than the average person. According to the authors of the 2013 Global Entrepreneurship Monitor Report, entrepreneurs score higher on happiness and life satisfaction when compared to non-entrepreneurs in a worldwide poll of over 197,000 people.
While it is more difficult to start a firm, it typically provides greater fulfillment than regular employment. When you’re working on a particular project you care about, you have more creative freedom, and time goes by much faster.
7. You’ll Need a Significant Sum of Money
It is possible to start with very little money. The amount of money you’ll require is determined by the sort of company you want to establish. There are several instances of individuals who started an internet business for less than $100 but earned six-figure incomes.
Also, a medium-sized coffee shop that seats between 20 and 30 people may cost anywhere from $15,000 to $20,000 to set up. The overall trend is that service firms have lower expenses while product-based companies (restaurants, manufacturers, and retailers) have higher costs.
As a side remark, there is a risk of having too much money at the beginning of a business. It’s quite simple to get swept up in the idea that everything must be fixed with money. For example, if you are not making enough money, you may be tempted to invest more money in marketing even though the product isn’t meeting customers’ needs.
In contrast, a scarcity of resources inspires greater self-discipline. You will be forced to consider why something isn’t working rather than attacking every problem with the raw power of cash.
As a side remark, there is a risk of having too much money at the beginning of a business. It’s quite simple to get swept up in the idea that everything must be fixed with money.
The Reality of Entrepreneurship
You may have never considered entrepreneurship before. You might still be in school, or you may have already earned your degree. It’s never too late to start, no matter your present situation.
The chances of success — especially if you are educated are greater than most individuals think; you don’t need a million-dollar business idea; your age has little bearing on your ability to run a business successfully; it is feasible to acquire the business skills needed to be an effective entrepreneur.