8 Small Business Myths (And Why You Don’t Need Them)
There are a lot of myths surrounding small businesses, but just like the Loch Ness Monster, they have no place in your future (unless you happen to be the owner of a tourist boat franchise on Loch Ness). Myths are not harmless – they can be deadly to your business practice, and need to be knocked on the head as quickly as possible.
Here are eight of the most common myths and misunderstandings along with exactly why you shouldn’t pay them any attention.
1. The Customer Is Always Right
If you haven’t heard this one, you must be living in Outer Siberia. (Even there, some ancient Siberian is probably muttering it under their breath.)
Here’s why it’s a myth: No customer should understand your business as well as you do. You understand precisely (or should do!) what you can and cannot offer and the reasons why that is the case.
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Unfortunately, there will always be customers who believe they know better, who would like you to do something at their whim, and you have to resist them. However, while the customer may not always be right, they are always important.
Manage customer expectations from the start by dealing with them up front. If you can’t do something you should be able to explain exactly why – whether it’s technically impossible, physically not doable, you just don’t have the time, or it’s not within your skill set. You’re the expert, and you know your limits.
2. Customers Only Care About Price
While this may be true if you’re a pound shop or a major brand, small businesses generally aren’t in a position to compete purely on cost.
Small businesses compete on value, and what they can bring to the customer that a larger, less flexible business doesn’t have – a more focused and personal customer experience, and unique goods and services.
You also bring a lot more advantages to your customers – an individual touch; better and more responsive customer service; better understanding of local issues and community needs; and better adaptability to any event, crisis or opportunity. That’s why customers choose you, not because your product is cheaper than the Quick-E-Mart. Don’t forget that!
3. If You Build It, They Will Come
Whether we’re talking about a website, product or service, this simply isn’t true. Just creating a site or manufacturing a product doesn’t mean that people will visit or buy. It’s that simple.
You have to fully understand what your customers want before anything you make or build stands a chance of attracting them. It’s not about what you think, it’s what they need and want.
Finding out what this takes time, research, and sometimes bringing in professionals in areas such as SEO and web design to ensure that your website is drawing in exactly the people who are seeking your services and products.
A proper “gap analysis” – an exploration of whether there’s a niche for your product – should take into account whether you’re likely to be able to sell your idea.
4. I’m Going Into Profit Soon
No matter what you do, the facts show that most small businesses don’t become profitable for the first year or so, as this article reveals (see also this report from the UK’s Money Advice Trust).
It takes time to develop your brand and raise customer awareness to levels where you are seeing not just one-off purchases, but repeat business. You’ll need time to learn what works and what doesn’t in persuading people to adopt your service or product.
Remember, just because you may not nail it from the outset doesn’t mean you won’t eventually. All businesses go through this start-up process – the key is to have a plan to make sure you can power through it (reducing costs is a good start) and on to success.
5. My Product/Service Sells Itself
Nothing sells itself, no matter how good or how useful it is – even sliced bread, and everyone knows that there’s nothing better than that. You will need a clear and well-researched marketing plan to bring your product to the attention of potential customers.
The dark art of marketing isn’t necessarily quite as black as it’s painted though – you can look at simple, free awareness-raising ideas such as using social media, running competitions, offering inventive deals or getting free publicity in local press through newsworthy activities.
6. You Don’t Need a Business Plan
Every small business needs a business plan, regardless of their size or whether they plan to apply for grants or loans. It’s simple business sense to have a clear vision of where you want your business to be, so you are aware instantly if you are falling short of your aims.
If you are aware early on that you are diverging from your plans, you can get back on track, whereas if you only have a vague idea of what you want from your business, you might not realise until it’s too late, and key actions to resolve the situation can no longer be taken.
Have weekly and monthly targets for sales and cash flow, and drive these by setting activity goals – targets for emails sent, phone calls made, and appointments made. Be flexible, because experience may show that your original plans need adjustment, but that is partly the purpose of a good plan – so you understand when you need to change.
Also, remember that plans don’t have to be tomes. It can be written on the back of a napkin, so long as it shows you where you’re going and why.
7. I’m the Boss – I Can Do What I Want
You may have gone into your business with dreams of having bags of spare time for your hobbies and being less pressured than you were as an employee, but the reality is that starting a successful small business is hard graft.
The truth is that your leisure time may get squeezed (almost to nonexistence), and your work/life balance, particularly in the early days, will lean heavily towards work. Manage a tough work schedule by being productive, managing stress, assigning realistic timescales to projects and being ruthless in cutting out unnecessary activities.
8. The Idea Is More Important Than The Details
Yes, the idea is a really important part of your business, but unless you have a whole strategy to execute it well, you won’t stand a chance of your idea becoming reality.
You need to understand detail such as local demographics, carry out research on competitor offerings and have a thorough understanding of each step required to take your idea from concept to reality.
Myths may sound pleasant, but the reality is that many of those we’ve covered above are pernicious and have destroyed many good companies. So, if you want to make sure your business is a success, these are the myths to avoid falling prey to:
- The customer is always right
- All customers care about is price
- If you create something, people will buy it
- Profits will roll in from the start
- Your product sells itself
- You don’t need a business plan
- You can do what you like
- The idea is more important than the details
Do you have any particular myths you have encountered, and how have you avoided falling into the trap? Let us know in the comments section below!
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