Earlier today I caught the top 10 myths about small business by blogger Wealthy Bag Lady. She proves with examples that you don't necessarily need megabucks, a certain minimum or maximum age, or fancy offices, but you do need to know how to sell, and you have to keep learning, and you can't do it all on your own.
That reminded me of the myths I deal with way too often in the world of start-ups and small business. Several of them make me mad. For example:
Be your own boss ...
No! If that's why you want your own business, keep your day job. In building a business, your customer is your boss. You keep lousy hours. You listen to customers, investors, partners, vendors, bankers, and any employee you want to keep.
If you really want to be your own boss, be very wealthy or learn how to be poor and happy.
2. When I get financed ...
I had a friend once who spent more than 10 years repeating that motto, writing business plans, shopping for investors, waiting for something to happen. What happened was he didn't do anything but dream. Don't wait for it: Get going, start it up, find a way to bootstrap, or finance it with customers.
Even before the downturn, getting investors was much harder than most people realize. Only a few thousand companies get venture-capital financing in a normal year, and a few thousand more get angel financing. Most businesses just get started. Average start-up cost for a U.S. business, according to a bank report I saw maybe three years ago: $10,000.
3. Follow the plan ...
This one is tricky. Following the plan is a good thing when the plan is managed, assumptions haven't changed, and things are on track. And having a plan is a good thing, too; have no doubt about that. But in today's world, you use the plan to manage changing assumptions, you review the plan regularly, and you keep it alive and up to date. The days of following the plan just because it's there are over.
This one, unfortunately, leads to a lot of misunderstanding, because people think the fact that plans have to be managed, that they need to change, is somehow an argument for not planning. Technically, maybe you don't need to plan, unless, that is, you want to grow, or manage well, or get investment, or borrow money, or determine your own future. It is true that you don't need a formal written and produced business plan unless you have somebody you need to show it to, but don't confuse planning with the plan. And follow it because it makes sense, because it's coordinating different functions and managing your business.
Tim Berry is president and founder of Palo Alto Software, founder of bplans.com, and a co f ounder of Borland International. He teaches starting a business at the University of Oregon. He is the author of books and software that includ e Business Plan Pro, published by Palo Alto Software, and The Plan-As-You-Go Business Plan, published by Entrepreneur Press. H e has a Stanford M.B.A. degree and degrees with honors from the University of Oregon and the University of Notre Dame. He blogs at Planning Startup Stories and Up and Running.