Myths of Entrepreneurship

Myth #1: Entrepreneurs Are Risk-Takers.

That’s the conventional wisdom among non-entrepreneurs. But non-entrepreneurs are standing on the outside looking in. Non-entrepreneurs can’t envision themselves as entrepreneurs, don’t see the opportunity that entrepreneurs see. Entrepreneurship is about vision. Building a business in your head, formulating a comprehensive plan, then putting the plan into action. And yes, weighing risk. Every step we take in life has risk associated with it, whether we’re aware of it or not.

Entrepreneurship doesn’t have to be risky. Entrepreneurship may be the safest career path you could choose. There’s never been a better time to be an entrepreneur, considering the frightening number of downsizings, mergers, and consolidations over the past few years. Loyal, capable workers lose their jobs, too. But entrepreneurs don’t fire themselves.

Most of us are conditioned to believe that holding down a traditional job is the safe choice. The entrepreneurial spirit views that “safety” as Golden Handcuffs.

Myth #2: The Failure Rate of New Businesses is Extremely High.

Four out of every five businesses fails within the first two years…that’s the sort of statistic you hear tossed around in the media. But it’s not that simple. That 80% statistic is misleading because it includes voluntary terminations, the dissolution of companies that never actually conducted business, and part-time businesses that were started for supplemental income and were never intended to endure for the long term. Business success or failure rates are subject to who is reporting them, to how “success” or “failure” is defined, and to how, for that matter, “business” is defined. (Many studies, for example, don’t include sole-proprietorships and home-based businesses.)

Recent studies suggest how complex any evaluation of entrepreneurial success actually is…

According to a five-year study conducted by the U.S. Bureau of the Census (1992 – 1996), 75.5% of all firms which existed in 1992 survived until 1996.
In a 1999 U.S. Small Business Administration study of businesses that close, only one in seven left unpaid obligations. Business bankruptcies were at an all-time low in 1998, dropping 18 percent from 1997.
A recent Dun & Bradstreet study found that 76% of new firms survived more than two years, 47% survived more than 4 years, and 29% survived beyond 8 years.
A 1999 survey by the National Federation of Independent Business found that of all businesses which were closed, sold or deactivated, 56% ceased operations in the first five years.
What do these statistics mean to you? Nothing. Absolutely nothing. The results of someone else’s business decisions are no predictor of the outcome of yours. The devil is in the details. Talent, good management, good timing, and a little luck.
It’s often true that, in the short term, the entrepreneur doesn’t pull the salary he/she pulled in the last job. But entrepreneurship is about building security for the long term. Entrpreneurship always has the potential to generate unlimited income. Few salaried positions do. While it’s true that only a few entrepreneurs achieve great wealth, it’s also true that many are financially comfortable.

And oh yeah, entrepreneurship is fun. For many entrepreneurs, money is not the top priority. If you ask most entrepreneurs why they started their own businesses, they’d tell you that it was about creative freedom and controlling their own destiny. Employ other people and other resources to handle the aspects that you aren’t good at and don’t enjoy. Work is fun when you’re not watching the clock, counting the minutes until the next weekend arrives. Dreading that alarm clock tomorrow morning, facing another workday, just like the one before. And the one before. And the one before.

The best way to learn to be an entrepreneur is to become one. Take control of your life, work hard doing what you love, and have fun. That’s what being an entrepreneur really is.
By Johne Moore