I get tired with all the doom and gloom about owning your own company. The generic media often presents owning your own company as if it’s so risky or difficult that only a limited few could ever do it.
Sure, maybe only a small fraction of a percent will ever build a true “unicorn”, but if the work I’ve done with our business coaching clients over the past decade has taught me anything it’s this–owning a successful, scalable, owner independent business is doable and realistic.
Here are the four biggest “business owner” myths and why they simply are not accurate.
Myth 1: “It’s too risky.”
I’ve heard it; you’ve heard it. Starting your own business is too risky and 90 percent of new businesses fail within the first five years. It’s almost enough to scare you into taking another job with the nearest large, stable, “safe” company you can find (if, in fact, such a company exists).
But is starting your own business really so risky? Let’s look at the facts.
Fact: According to most credible government and academic studies, a generic business start-up that has at least one employee has a roughly 70 percent chance of still being in business after two years (the way most studies define “success” for a start-up business). More than 50 percent are still in business after five years. And these numbers are misleadingly low in most instances. Why? Because the data doesn’t account for businesses that close for legitimate reasons other than “business failure”–reasons such as health issues, the desire to start a new business, or other personal reasons.
I believe these statistics are a source of encouragement. After all, if 70 percent of new business owners can succeed through the first two years and at least half make it through year five, imagine how much better your odds are when you tap into the support, training, and input from resources such as local business groups, online business networks, and a solid business coach.
In my experience, most of the new businesses that fail do so because the business owner has no clear model, few skills, no mentors and advisors, and an inadequate support system. It’s not the businesses that fail them; they fail their businesses because they don’t invest the time and energy in themselves as owners. They work hard, but they work hard at the wrong things. They work at the job of doing their business, not at their role as a business owner.
Hard work is never enough; you’ve got to do the right work hard. When you develop your skills and peer group as a business owner, your odds of success rise dramatically. In fact, skilled entrepreneurs commonly have track records in the 80 to 90 percent success zone. They regularly move from one successful venture to another.
The bottom line? Owning your own business does have risks, but the degree of control you have over your future–and the success rate for building your dream life–is magnitudes better than being trapped working for someone else.
Myth 2: “It will consume your life.”
Yes, launching a new business is intense. So are the middle years of establishing, grooming, and growing your company. But when you understand that the real goal of your business is to create an enterprise that profitably creates value in the world in a scalable way (i.e. INDEPENDENT of you the owner) then you see that as you grow your company, you not only can but must build it to be increasingly less dependent on you.
I’d like to share with you a critical lesson all business owners who want more than just the money must learn. If you don’t, while you may be rich, you’ll never enjoy real wealth. You see, as I’ve enjoyed more and more business success, I’ve had the opportunity to spend time with some of the top business people in the world–people who have literally launched and run multi-billion dollar enterprises. During that time, I’ve observed that most entrepreneurs fall into one of two groups.
One group is driven, but without a vision or mission, and these people use their business activities to fill that part of their lives that are broken or empty. This group covers up broken relationships and a fundamental feeling of lack by working long hours with no extended breaks or regular recreation because stepping back or sitting still is too uncomfortable for them. The silent, still moments scare them.
The second group is equally ambitious, and its members are moved to build out of enjoyment and a desire to serve. They maintain that state of play that transforms their work into a joy and develops a dynamic harmony between their work and the other core areas of their lives. They’re not afraid to step away from their businesses for extended periods of time. They maintain and nurture their personal relationships. If they’re married, it’s an ambitious marriage with a vision and mission. They contribute to their communities or charities. For them, their business is merely one part of their vibrant and full lives and is kept in the context of their deeper personal values. I urge you to join this second group. Follow your passion when building your business, and maintain the harmony between the roles you play and the domains in which you move and care about.
How you do your business life mirrors how you live your values in general. If you let your business crowd out all the other areas of your life, then regardless of the dollars you earn, you’re still living an impoverished life.
Again, the bottom line is to build a business, not a job. Yes, it will be all-consuming early on, but over time you can transition your business away from needing you on a daily basis. This magical shift gives you freedom.
Myth 3: “You’ve got to stay in control.”
Control is a trap that will wrap your business around you, making it grow progressively more dependent on you. Instead, learn to build your business with the systems, team, controls, and scalable solutions in place that enable it to operate independent of your autocratic control. The more you build for personal control, the more you’re trapped into being there daily to exercise that control and to personally run your business.
If all decisions and key actions must come back through you, then you become the single greatest bottleneck inside your own business. What’s more, you don’t have a business, you have a self-employed job. While this may satisfy some, don’t settle for it. You can have more.
Building an owner-independent business is a viable and realistic choice for you, but one you’ll never enjoy if you cling to the fool’s gold of building your business to maximize your personal control. You have to strengthen your muscles to intelligently and effectively let go of parts of your business to your team, systems, and internal controls.
Myth 4: “It takes a lot of money to launch a new business.”
This is one of the most common and damaging misconceptions about launching your own business.
Fact: According to studies, most new businesses are launched with less than $10,000 of start-up capital. One study from Wells Fargo conducted by the Gallup Organization found that 73 percent of new businesses were launched with no outside funding of any kind and that the average business start-up used less than $10,000 of launch capital. While most new business owners wish they had more money at the start by keeping their expenses to a minimum and being creative, they’re able to launch their companies on a small amount of money–making launching a new business accessible to almost anyone. Of course, some businesses do require large capital outlays (usually for expensive equipment, extensive facilities, development costs, or required staffing), so these new business owners must raise outside funding.
Fact: If you require outside funding, you can bootstrap (fund out of sales), raise private capital (from family, friends, angel investors, or venture capital sources), borrow through SBA (Small Business Administration) loan programs, crowd source your funding, or create a joint venture to launch your business without a lot of personal capital.
A hundred years ago, it did take quite a bit of capital to establish a new business. But technology has changed the playing field, giving the newcomer easier and less expensive access to the great game of business than at any other time in history. And the trend is accelerating. Never before has it been easier and less expensive. So don’t let lack of funding stop you from launching your dream business. You can and will find a way to access the capital you need.
I launched my first successful business with $7,600. In fact, I launched it with $7,600 I didn’t even have–I financed for several months through two of my credit cards.
About 80 percent of the time the money issue comes up around launching a new business, I think it’s just an excuse. That leaves 20 percent of the time when businesses do require larger amounts of capital to launch than the would-be founder has easy access to. But even in these cases, if the business idea, plan, and team are strong enough, the entrepreneur will find a way to raise the required start-up capital.
Remember, in life you can either buy your excuses or buy your dreams–but you can’t buy both.
I hope this article inspires you to follow your dreams and take the entrepreneurial leap.
For more ideas on growing your business, including a free tool kit with 21 in-depth video trainings to help you scale your business and get your life back, click here.