Small Business Myths

[This post originally appeared at Mine Your Own Business on November 2, 2006.]

In this past Sunday’s (actually 10/29/06) Napa Valley Register, writer Beth Pratt exposes 8 myths about starting and running a small business.

1. Over 95% of small businesses fail. In the 1990s there was a report that said 95% of all new restaurants fail. Somehow, like the old “telephone” game, this statistic somehow got applied to all small businesses. According to the Small Business Administration 2/3 of new small businesses survive at least two years. Over 1/2 survive at least four.

2. The government will give you cash to start a business. The SBA will guarantee a loan, but the government isn’t in the business of making loans.

3. My favorite. Small business owners are rich and get to take it easy. No comment needed.

4. I’m a good cook so I should start a restaurant. Feel free to insert any specialty in place of the word “cook” and any type of business in place of “restaurant”. As we all know, there’s a big difference between doing any other type of work and running a business.

5. Failure is bad. Most successful business owners will tell you that they failed many times before they became successful.

6. Small business owners, with few employees, don’t really have to worry about federal and state labor laws. As you know, it just isn’t so. In fact, lacking human resource and legal departments, small business owners may have more to worry about than their larger counterparts. This is one you’d better take seriously.

7. You need a lot of money to start a business. It depends on the business, but getting the money is usually not an obstacle to getting started.

8. Money will fall out of the sky if you have a great idea. Money’s never easy to come by, but hard work and persistence are usually more important than the idea. Edison had lots of great ideas, but he had to work awfully hard to make any of them successful.

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