Top 5 myths about starting a business

More Americans became entrepreneurs in the past two years than at any other time in the past 15 years, according to the Kauffman Foundation. But if you’re considering leaving your day job to take the leap into entrepreneurship, first learn the facts behind these Top 5 myths about starting a business:

1.All you need is a great idea

Your great idea is a starting point – not the end point – of starting a business. (Jake Turcotte/The Christian Science Monitor)

Rarely is a great company based on one great idea. Typically, the initial idea you have for a company gets transformed significantly over time. For example, PayPal initially offered a service that allowed one Palm Pilot to pay another. When customers told the company they really wanted the ability to pay others online, PayPal changed routes and built a billion-dollar business.

This is a great idea because everyone tells me so

Financial support – not moral support – is the way to judge if you have a great idea that can fuel a successful business. (Jake Turcotte/The Christian Science Monitor)

Don’t be blinded by other people saying they really like your idea. Even if they’re not just being polite, they probably come from similar backgrounds as you do or share common values. (That’s why you’re friends and/or chose that person to share your idea with in the first place). But those people aren’t necessarily your future customers. The best question to ask is whether someone will write you a check to fund your business. If someone really believes in your idea, they will vote with their wallet.

If you build it, they will come

Have a better mousetrap? Great! Now, find a way to promote it. (Jake Turcotte/The Christian Science Monitor)

Many budding entrepreneurs think that if they build a great product or service that customers will flock to it. But an entrepreneurial venture doesn't come with a built-in Hollywood ending. Particularly in today’s environment, every product or service needs to compete mightily for mind share. Yes, you need a great product. But you need even better marketing.

When you start your company, you become the boss

Entrepreneurs still have bosses to answer to. (Jake Turcotte/The Christian Science Monitor)

While it is true that you may not report to a single boss each and every day, most entrepreneurs and business owners have numerous bosses. They have customers that they have to appease. They have vendors to take care of. They have employees who need nurturing. And so on. Yes, you may be able to set your own hours. But no, you won’t be making all the rules.

Most entrepreneurs are rich

Most rich people are or were entrepreneurs. But most entrepreneurs are not rich – or ever will be. (Jake Turcotte/The Christian Science Monitor)

Unfortunately, the vast majority of entrepreneurs don’t become wealthy. Research shows that most entrepreneurs go out of business. And most make less money as an entrepreneur than they would have made had they worked for someone else.

But the converse is true: Research shows that 80 percent of pentamillionaires (those with a net worth of $5 million or more) are entrepreneurs who grew and sold their companies. So, yes, if your entrepreneurial endeavor does pan out, you might become very, very rich.

Dave Lavinsky is president and co-founder of Growthink (www.growthink.com), a national consulting firm and investment bank.

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