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Entrepreneurship Corner: Myths that Ruin a Smart Start-up

Myths are start-up ideas that entrepreneurs believe but are untrue. We will expose these myths so that you can know them and avoid personal disappointment and loss of investment.

You need a feasible plan

Once you have made up your mind to go into business and your thoughts have crystallised into a viable idea, the next step is to develop a plan for your business start-up. Your plan is a written document that injects to life your idea, and provides a blueprint or steps-to-action for you. It is popularly referred to as start-up plan, feasibility study, business plan, marketing plan, operational or strategic plan. If you already have a business, you may need a growth or expansion plan.

Writing your thoughts down is simple. But, writing your plan requires professional assistance from business advisors. There are tons of ready-to-use templates and online resources you can source freely or at minimal fees on the Internet. However, information overload may overwhelm and frustrate you. So, you should seek professional assistance to write a feasible plan. This is the plan that will attract investors to your start-up, and interest your bankers. It will also show your unique selling propositions to prospective customers. When you have a feasible plan, you can raise funds and attract investors to your start-up venture.

In addition to getting assistance from a professional to write your plan, you also need some resource persons such as accountant lawyer, tax consultant, banker, and relevant government agencies among others (which we will consider in the next edition) prior to your business start-up.

Let us look at some myths that can ruin your smart start-up.Myths are ideas or assumptions that you believe but which are not true regarding how you can go about your business start-up Would-be entrepreneurs have been discouraged after believing these myths and later realised that things did not work out as they had expected. They got burnt out and ended up losing their investments.

Myth #1: It takes only good ideas to do business

It is untrue that all you need to start-up a good business is to have a very good idea. Is your idea feasible? Is it bankable? Does it add value? You need to work and rework your idea into a proposition that sells your services and generate income for you. Good business ideas should be lifted from the realm of the thoughts of their owners into a feasible plan that will make meaningful impact in the market. You should subject your good ideas to test to determine if you can take them to the market to make money.

Myth #2: You do not really need money to start business

You have been told that you do not need money to start-up your business. It is not true. Money is critical at every step of the way as you initiate your start-up from idea phase to business planning till you open your shop to customers. You may not need huge sum of cash but whatever the level of your equity there is always an element of money involved. You start spending money (and should track such expenses in writing for future auditing trail) from the time your thoughts begin to crystallise into viable ideas and feasible plan.

Myth #3: You can startup your business alone

Can you go all out by yourself to do your business? No, you cannot even as a sole trader. That a tree cannot make a forest is also true in business start-ups. You have to relate with different stakeholders such as start-up guides and resource persons, customers, suppliers and employees depending on your type of business start-up and service offering.

Myth #4: You can start up any kind of business and succeed

If you venture into a business without any prior industry knowledge and skills and have to depend on other people to run it,your likelihood of failure is very high. You should not engage in any start-up business where you lack personal expertise. A corporate office worker tried out interstate transportation business because he heard that it is lucrative. He did not have any personal expertise. Later, he realised that the driver he engaged was cheating on remittance. The driver wrecked the office worker’s bus and saved up money from the proceeds he was not remitting to purchase his own bus. He later returned the damaged bus as unprofitable.

Myth #5: You can cut corners and regularise later

You should not start any business with the intent of cutting corners.You should ensure you get all your necessary government approvals and local authorities’ permits.Doing it the other way round and resorting to bribing corrupt government officials to stay in business is a more expensive route. It is prudent, better, smarter and safer to get all requisite government approvals, and pay all fees and permits applicable in your industry before you start up your business.

Myth #6: You will make quick money within a short time

The money may not come in as fast as you anticipate. You should brace up for this reality. Becoming an entrepreneur is a life-long journey. Break even period for your start-up depends on your type of business, industry and strategy. Realistically speaking, breaking even for businesses ranges from a period of three months to three years. You must have a feasible plan for your business so that you do not end up with frustrations when the quick money does not come in.

It is commonplace knowledge that over seventy-five per cent of small and medium-sized enterprises fail within the first three years of their operations. You should not add yours to the statistics of failure.You do not want to waste your time and investment banking on myths that are untrue. You have to unlearn them in order to move to the next phase of planning your business start-up.

Author: Babatunde Fajimi

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broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH. Contact: editor@punchng.com

This article was first published in The Punch Newspaper, Nigeria via http://www.punchng.com/business/am-business/myths-that-ruin-a-smart-start-up/

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