Have you ever thought of starting your own business? According to the Commerce Institute, on average 4.4 million businesses are started every year in the United States. It can be an exciting endeavor filled with challenges and rewards, but there’s also a lot to consider as you begin your entrepreneurial journey. As you begin to research and plan, you may find that you have some incorrect assumptions that can hold you back from success.
Common misconceptions of owning a small business
1. The most successful businesses are based on the best ideas
The first step to starting a small business is coming up with an idea, but the rest is about the execution and bringing the idea to market. To be successful, a new business needs more than just a good idea, it needs a solid plan, a strong work ethic, and the business skills to execute effectively. Simply having a good idea is not enough to start a small business.
2. You don’t need to write a business plan
A business plan helps you visualize who your business is and where your business is headed over time. You need to know who your customers are, what you are selling, and what people are willing to pay for your product or service. You also need to know how much cash you have to invest and how long it will last. Take the time to do market research and determine a plan of action. A business plan is a living document that will be updated as your business evolves and matures.
3. Great products don’t need marketing
The importance of marketing for your business is that it makes customers aware of your products and services, engages them, and helps them make the buying decision. A great product is useless if no one knows about it. The market needs to be educated about new products, especially when they are disruptive. Look for online resources or marketing professionals who can help you to identify the best use of resources for each marketing channel.
4. You can entirely rely on your own financing
Many entrepreneurs believe they can use their savings to finance their start-up but soon discover they need more financial support. Small business loans can be a great resource, but you should only take out a loan if you fully need it, as an over-reliance on loans can lead to debt if a business is not as profitable as expected. Be careful to evaluate potential interest rates on loans and assess cash flow and costs. It is important to have enough personal money invested in a new business and to be careful to only spend on things necessary for the business to succeed. Be wary of spending too much on office space or high-end furniture.
5. Taking a risk is too risky when first starting
For entrepreneurs, risk-taking comes with the territory. Evaluating risk and acting strategically is key to success in business decision-making. When faced with risk, arm yourself with information and assess carefully to make the best decision and not miss out on potential opportunities.
Perhaps the biggest misconception of starting a business is that you can do it alone. No matter where you are in your small business journey, having a proper business insurance policy can make all the difference in protecting the endeavor that you worked so hard for. To find the right business insurance policy that will best protect your business, contact your local agent.
