There was a time when entrepreneurs were all hankering for advice from anyone and anywhere. Now, everyone seems to know everything about operating and starting a new business that those who plan to start their own business become disillusioned. Truth be told, gurus of small business started out with probably as much hesitation and uncertainty as the next person.
Starting a business is a trial and error process. Business gurus, whether self-proclaimed or not, become such because of tirelessly working to be better, to be well ahead in the game. Business gurus learn how to weed the myths from the realities of starting and operating a business.
There are some business myths from Fortune which entrepreneurs need to break away from. These myths usually give false hope to small business owners and it sometimes drives business owners into believing that they are real when in fact, they are not.
Here are some lessons start-up entrepreneurs should take heed:
- Gross margins typically dip. Your gross margin, gross profit margin and gross profit rate changes. These are highly dependent on the difference between your sales and the cost of production. If your overhead costs are higher than your profit, you’re in for a tough time.
- Competitors are not always looking to put you out of business. There is such a thing as a healthy competition. Your competitors might be interested in doing a joint venture with you and there are some ways that you could get unsolicited, albeit very useful advice from the way your competitors are going about their business. Don’t close your door entirely.
- Focus on your market but make sure to give a wide berth to customers who belong to other niches. There is increasing adaptability in that big corporations may find use for products which were originally patterned after small businesses. But what will you do if a big corporation looks you up and they realize the opportunities your products and services would be invaluable to their company? Would you turn them down? Of course not! In a nutshell, you have to be prepared to cater to your market and you also have to be flexible enough to take in a new niche.
- Are you guilty of being a jack of all trades but master of none? Stick to a product which you and your whole company specializes in. Doing custom jobs may increase your customer base but you need to know and realize the bottom line: Can you vouch for the quality of your employees’ work? Not everyone have the same breadth of experience as you do. And you can’t do all the jobs all at once. Find a specialty and follow-through with it.
- Listen. Being the CEO or President or what-have-you in your company does not make you the mayor of know-it-all town. Everybody has a room for improvement and as the leader of your company, you should know that there are things that you just can’t be kept abreast of. There are some things, some improvements which your employees, friends, families know of that you just don’t know about. Keep your pride in check and listen. Sometimes the best ideas are those made not only by you but by people who desire the same results as you do.
Hi,
Great post. I liked the point where it is about healthy competition . Yes it is correct and we should not always think that they are there to just throw you out of the business. If we do good services people will come to us again and become repeated customers.
Lakshmi
Thank you for your post topic. Change is constant. What may have been true 5 years ago probably has changed. And we shdoul allow our business to be guided by the lastest and best information. It is also important to think out of the box and do what works for your creative business.
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Hi Amanda – This is a great post! Thanks so much for sharing.
“Listen. Being the CEO or President or what-have-you in your company does not make you the mayor of know-it-all town.”
I read another article that said something similar to this, it basically debunked the myth that “employees should be grateful that they still have a job”. If that’s an attitude that’s taking off, it needs to stop. Just because it’s hard to find work these days does not give employers the right to treat their employees like dirt. No company’s going to grow if you’ve got a downtrodden, resentful workforce.
And that’s another big thing; growth. It’s a myth that all growth is good. Growth is a good thing, but only if you’ve got it under control. I’m no business owner and I’m not in any danger of becoming one, but I’d still hazard a guess that it’s much easy to persuade a stubborn donkey to move than it is to restrain a charging elephant. It might seem like insanity to turn down a big prestigious contract, but it’ll do you no good if you can’t deliver on it. And if you fail to deliver on it, you can bet that the client won’t be coming back they’ll warn others to avoid you too.
On the other side of this, you shouldn’t be afraid of growth either. The small business feel is nice, both for you and your employees, but you probably will come to a point where you have to compromise on it, perhaps let it go entirely. You might have to introduce policies and procedures that would never have crossed your mind at the start, you might have to take on more people, you might have to introduce something like SAP Business One for the accounts, rather than relying on Excel. This can all feel a bit threatening, a bit bittersweet. But if you find yourself having to make those decisions, it tends to mean that your business is doing well.