Some of the most common myths about entrepreneurs stem from the answers to the question, "What is an entrepreneur?”
Most people believe that anyone who dives into any profit-focused venture other than a 9-to-5 job automatically passes for an entrepreneur. While this notion is widely accepted, it’s not correct, as entrepreneurship involves ideas, products, services, ownership, and customers.
There are many things that entrepreneurship does (and does not) entail. This article focuses on debunking common misconceptions that can limit you from achieving your full potential as an entrepreneur. Read on.
1. You Need to Have Money to Start a Business
Having capital is essential for any business startup. However, cash on hand isn't necessary for a startup's success. Research has shown that almost 20% of businesses fail within their first year, and 82% of business failure is mismanagement of funds. This means entrepreneurs without adequate preparation before venturing into business can experience loss no matter the pile of cash available. On the contrary, starting up a successful business as an entrepreneur depends on your knowledge, foresight, learning, creative ability, innovation, market strategy, and heightened commitment.
2. You Need to Quit Your Day Job and Go All-In as an Entrepreneur
One of the most common business myths is that entrepreneurs cannot run a business successfully if they don't quit their jobs. While we acknowledge that running a business requires time and commitment, the transition can be gradual until you can generate enough income to support the business full-time. Keeping your job when starting can help you maintain an extra source for financing the business. Your job can also provide you with insurance benefits your business may not be able to offer in the early days.
3. You Must Invest Heavily in Marketing and Advertising Right Away
The myth of entrepreneurs investing heavily in marketing and advertising after starting a business can be misleading. This is because pushing huge funds into advertising and marketing for startups or small businesses can leave other aspects of the business vulnerable. It's important to understand your target audience; then, you can apply an organic growth strategy to reach them. One helpful organic growth strategy is using social media to drive sales because 89% of customers are willing to buy from a business they follow on social media.
4. You Have to Be an Extrovert to Succeed in Business
Another common myth about entrepreneurs is that they must be extroverts or have “type A” personalities before starting their entrepreneurial journeys. Extroverts are outgoing, good at networking, charismatic, and jovial, which seem like good qualities for entrepreneurs. However, introverts can excel as much as extroverts at entrepreneurship. After all, businesses thrive on more than extroversion alone; adaptability, resilience, creativity, and vision are crucial for business success.
Research that picked the brains of introverts and extroverts found that introverted brains are more active, increasing blood flow. Therefore, introverts can develop interpersonal skills to adapt, communicate, and handle challenges as needed. Introverts are also detail-oriented listeners, which is a plus for the business, especially when relating to customers.
5. All Entrepreneurs Are Risk Takers
Taking reckless risks is different from taking a calculated risk as an entrepreneur. Nobel Prize winner Harry Markowitz identifies this as a "risk-return tradeoff," which means that the higher the investment risk, the higher the potential return.
Entrepreneurs take calculated risks by conducting in-depth research on market conditions, estimating potential rewards, and analyzing the target audience before launching an idea or product. Besides, not all entrepreneurs are risk takers; therefore, the myth of entrepreneurs being natural risk takers is relative.
6. Success Happens Overnight
Most often, what people see as overnight success is just perceived results. They fail to see the long years of hard work, commitment, sacrifice, and dedication to grow that business. Consequently, no successful business story happens overnight. First, entrepreneurship is a platform for continuous learning and growth, especially with the invention of new technological advancements. Second, success results from preparation, planning, execution, and sometimes failure.
False. All entrepreneurs are businesspeople, but not all businesspeople are entrepreneurs. An entrepreneur is a person who develops an idea and takes the requisite risk and responsibilities to create a product or service that can generate profit. On the other hand, a business person doesn’t need to build anything new. They can be managers, employees, or consultants working within an established business, making money through their contribution toward the growth of the business.
Take Your Business to the Next Level With EO Membership
Now that we’ve debunked some common myths about entrepreneurs, the next big question is how to scale up your business as an entrepreneur and reach your dreams. One of the best answers is joining an entrepreneurial organization like EO Boston. EO Boston is an exclusive network of business leaders across various industries in Massachusetts. Here, you’ll gain access to mentorship, seminars, connections, and so much value that can transform your business in record time. Check to see if you qualify to join.