The Internet has helped broaden options and level the playing field for people who want to start a business. Access to information, networks of like-minded people, and resources help one plan and set up their business from scratch with little capital.

What would have taken longer, like ordering individual parts, can now be achieved faster with the transaction mainly done online. And there are many ways to solve problems, such as outsourcing for staffing, dropshipping for fulfilling orders, and crowdsourcing for generating ideas.

The relative ease of starting a business nowadays and the whole promise of success open to a lot of beliefs that have been taken to be absolute truths. Myths, as they come to be known, tend to muddle one’s mindset and create false complacency and inaction.

This guide identifies and debunks the leading myths about entrepreneurship or at least adds nuance to them. As someone who will organize, manage, and assume the risks of your business, you deserve to know the truth about what you are getting into. This way, you can start your business with clarity, manage your expectations, and act accordingly for the benefit of your business in the long term.

Myth 1: You Need a Lot of Money to Start a Business

Some businesses are capital-intensive; some are not. Some can be run from your room, at least initially, and some would require a manufacturing complex from the outset. Entrepreneurship leans more toward innovation, and an entrepreneur is someone who has limited resources is part of the branding if we go by this definition.

Starting a business will cost money in one way or another. You’ll need funds for equipment, raw materials, people, and space. That will depend on the type of business you’ll be running and how you intend to go about it. To offer perspective, consider the four types of entrepreneurship.

The table below categorizes and summarizes the four main types of entrepreneurship, highlighting their key characteristics and examples of notable companies in each category.

Type of Entrepreneurship	Key Characteristics	Example Companies
Small Business Entrepreneurship	Independent businesses with less than 500 employees Accounts for 99.9% of American businesses	Independent car washers, local coffee shops, and small-time cleaning services,
Startup Entrepreneurship	Focus on scalability and innovation Often started in modest settings like dorms or garages	Airbnb, Uber, and The Honest Company
Large Company Entrepreneurship (Intrapreneurship)	Multibillion-dollar companies Evolve to create multiple products or product lines	Amazon, Alphabet, and Meta (with products like Facebook, Instagram, Messenger, WhatsApp)
Social Entrepreneurship	Focus on social causes Aims for both profitability and social impact	Tom’s, Lush, and FIGS

So, yes, starting a business with small capital is possible. This is often referred to as bootstrapping, where you use your personal money (or borrow from your family and friends) and depend on sources like credit cards and personal loans to fund your entrepreneurial venture. The bootstrapped company may then use money from sales of products and look into funding from outside sources to finance a specific business activity.

Pulling yourself up by your bootstraps becomes a myth if left unchecked. While bootstrapping allows you to start a business with limited funds and really be hands on in managing it, also consider the amount of time you’ll have to spend doing all the tasks as well as the perfect timing for pulling out your money.

With your tight budget, you need to have a solid plan. Write a business plan that includes financial projections to budget how much money you’ll need to raise and potential sources for it. Consider seeking seasoned entrepreneurs for advice on how to make efficient use of resources.

Reality: Starting a business with minimal or even no funds is achievable, yet it demands a high level of creativity and dedication, as well as careful planning.

Myth 2: A Great Idea Guarantees Success

Every celebrated company today started as an idea, be it a breakthrough or an improvement to an existing one. But for every Google, there are scores of startups that failed and fizzled out their first year for various reasons. The search engine giant’s growth and success are both an inspiration and a cautionary tale that it takes more than a brilliant idea for a business to succeed.

The idea behind Google is “to organize the world’s information and make it universally accessible and useful.” For it to be the search engine of this generation and become synonymous with searching anything online, it has spent on things that would deliver on its vision per this report. Also, not everything Google created has been successful or survived.

How to turn your idea into a reality is as critical as the idea itself, and you’ll need to do your research to test the viability of your idea in the real world first. In the same way that you have to have plans to proceed with your idea, you also need to learn to make changes and include uncertainties like the recent COVID-19 pandemic.

These recognizable businesses prove that ideas, no matter how simple they look on paper, can be great with proper execution:

• Under Armour started from its founder’s desire for a shirt that remains dry while he wears it underneath his football jersey during practice. He then came up with this shirt that wicked sweat faster.
• Etsy began in 2005 as an online marketplace for artists selling their crafts. Now a publicly traded company worth billions of dollars, Etsy continues to be a community for independent creators and buyers of arts and crafts.
• Udemy’s (You + academy) mission is for everyone to have access to quality education, as its founder knew the Internet’s role in unlocking learning opportunities.

Reality: Success in business demands more than a great idea. It hinges on effective execution, strategic planning, market adaptability, and the ability to innovate and respond to changes, as exemplified by companies like Google, Under Armour, Etsy, and Udemy.

Myth 3: You Must Have a Formal Business Education

The success of entrepreneurs who did not have a degree can easily debunk this statement. While their success stories are shaped by their unique circumstances (e.g., skills, family finances, business niche, and luck), entrepreneurial hopefuls without business background and of different educational levels can look up to these people for inspiration:

Bill Gates has shown passion for computers and things related to it before founding Microsoft with Paul Allen in 1975. Then Microsoft struck a deal to develop the software for Altair 8800 and later the operating system for IBM’s personal computer. Gates dropped out of Harvard University where he took math and computer science courses to focus fully on Microsoft.

Steve Jobs dropped out of college because he couldn’t see the value in his parents’ hard-earned savings being spent on his college education at Reed College. He did take a calligraphy class, which inspired Mac’s typography. Jobs was 20 when he and Steve Wozniak famously began Apple at Jobs’s parents’ garage.

Richard Branson dropped out of high school and founded a magazine at 15, which paved the way for his records business. His Virgin Group of companies includes travel and leisure, space, and health and wellness.

Entrepreneurship shows you the realities of doing business, where you have to take action and learn simultaneously. You’ll be solving problems, making decisions, negotiating, working with diverse people, and so on. In fact, you’ll be able to test theories and concepts taught in the classroom.

This is not to say that a business degree is not advantageous, given the fundamentals you’ll learn from it. When the opportunity presents itself, and you want to enhance your knowledge as an entrepreneur, you can take relevant courses while running your business. You can also pursue an MBA without a business degree; your business experience will be invaluable here.

Tapping the knowledge and experience of a mentor who has managed or run their business is also part of your learning path as an entrepreneur. This mentor becomes part of your support group, someone you can rely on for sound advice regarding your business.

Reality: Entrepreneurial success isn’t confined to those with formal business education, as shown by the successful business above. Their achievements highlight the value of innovation, hands-on learning, and leveraging unique skills and experiences in building business empires.

Myth 4: If You Build It, They Will Come

“If you build it, he will come” is from Field of Dreams, a movie about a farmer who builds a baseball field where legendary players play. The line has been adopted as a sort of business mantra where they (customers) come after you build your business. So not only is the quote inaccurate, but the truth is you need to find customers for your business, like the farmer in the movie who sought out certain people.

Conduct market research to remove guesswork about your potential customer base. Per the US Small Business Administration (SBA), market research allows you to determine the demand for your product and the size of that demand early on, such as where your customers live and what similar options are available to them. Moreover, an analysis of your competitors’ strengths and weaknesses can help you find your edge over the competition.

Use data to develop your product and market it in a way that attracts and engages the audience. Because you are a new entrant in the market, you have to introduce who you are as a business, your story, and your mission.

Your marketing efforts will largely depend on who your target audience is. If you are aiming for those who use the Internet, digital marketing is a cost-effective way to reach them. Consider these ingredients in cooking up an effective marketing strategy online on a tight budget:

• Run digital ads on Google, Facebook, and other platforms.
• Invest in mobile ads for smartphone and tablet users.
• Still, invest in a relevant and user-friendly website.
• Publish quality and shareable content.
• Be active on social media, like making educational TikTok videos.

Reality: Success in business demands more than just building it; it requires active customer engagement, thorough market research, and strategic marketing.

Myth 5: Instant Success Is Common

Instant success in business is rarer than you think. Instant success also takes time, and overnight is relative, say 5 years, 10 years, 20 years. Then there’s the task of making money and keeping the business profitable after the initial hype.

Those hailed as overnight successes have either been years in the making or something else before they achieved their current success as in these examples:

• Instagram: It was initially called Burbn, which was like Foursquare that allowed people to check in spots. Instead of using the check-in option, Burbn users were more into the photo-sharing functionality. The app’s focus then shifted to the photo-sharing aspect, and it later became known as Instagram.

• Twitter: Twitter’s history started as the podcasting platform called Odeo or as a side project of Odeo. A year into its launch, Twitter started to get popular and got Series A funding. From there, it was a series of highs and lows for Twitter until more recently when Elon Musk bought the company and renamed it X.

A startup aims for speed and growth that culminates in it going public, says Forbes. How the startup gets its funding serves as a sort of timeline for the business that starts with bootstrapping, seed funding from angel investors, and series funding A, B, C, or even D. IPO or initial public offering is the last stage or end goal.

It can take years for businesses to break even and profit—Amazon recorded profits around its 10th year. Against the prospect of what could be a long wait and setbacks along the way, patience becomes an ever-important virtue. As the cited HBR article notes, what separates winners from losers is that the former works harder.

Reality: True business success is rarely instant. It often involves years of development, strategic pivots, and patient growth. The cases of Instagram and Twitter highlight the importance of perseverance and adaptability in the entrepreneurial journey.

Myth 6: You Need to be a Risk Taker

To recall, an entrepreneur is someone who assumes risks of a business. They also take a risk after weighing the pros and cons of a situation, although some entrepreneurs are really skilled at making decisions almost by instinct. So more than a risk taker, an entrepreneur must know what risks to take that will pay off and how to manage risks.

We can learn from this categorization of risks that organizations face in this HBR article:

Preventable risks, such as inappropriate actions from employees and managers, can be controlled and must be avoided.

Strategy risks are defined as “those a company voluntarily assumes in order to generate superior returns from its strategy.”

External risks or events outside the organization are beyond the company’s control.

There is a whole calculation and careful consideration involved to ensure every single risk you take is worth it. That the reward you get from a strategic decision will be more than the risk associated with it. How do you calculate risks?

1. Define how much risk you can take based on your risk appetite, tolerance, and threshold.
2. Think of the best and worst possible outcomes if you were to proceed with a potentially high-reward decision.
3. Related to the point above, consider how you plan to manage the negative consequence/s of that decision.

Risk and reward go together, and so do risk-taking and management. It also calls for setting precautions to protect yourself and your business from damage caused by events within and beyond your control. These solutions include complying with relevant regulations, getting adequate insurance for your business, and creating a business continuity plan.

Reality: Entrepreneurship involves calculated risk-taking and management, not just boldness. Successful entrepreneurs assess and manage different types of risks, including preventable, strategic, and external, to achieve balanced risk-reward outcomes.

Myth 7: Work-Life Balance Isn’t Possible

The perpetually busy entrepreneur is a myth and a recipe for burnout. Entrepreneurial burnout is a real concern linked to obsessive passion, as this survey showed. As you embark on your entrepreneurial journey, it’s key to revisit how your passion is influencing your work and life.

You have several tools and solutions to make your workload bearable after the frenzy of a 14-hour workday. You can delegate tasks to the team or hire a virtual assistant. Schedule meetings online or in-person and vacations effectively.

Hiring additional people and using software will cost money for sure. But prioritizing what you do best may be a better use of your time and stave off burnout. Here are additional tips to achieve work-life balance as an entrepreneur:

• Stay hydrated and eat a healthy diet.
• Strive to be productive (not busy).
• Set time for exercise.
• Socialize.
• Sleep.

Finding that sweet spot is a personal pursuit that can take a long time, and understandably, your hands will be full as you figure out things early in the business. John Zimmer of Lyft, Luis von Ahn of Duolingo, and other successful entrepreneurs have these insights to share about work-life balance.

Reality: Work-life balance is achievable for entrepreneurs. It involves smart delegation, effective use of tools, prioritizing health and well-being, and personalizing strategies to prevent burnout.

Myth 8: You Need to Be an Expert in Your Industry

Under the concept of bootstrapping, you don’t have to be an expert or be experienced to start a business in your chosen niche. However, you are required to know enough about your business. Doing your homework will be helpful in creating your business plan and presentations to be given to potential investors.

As disruptors, entrepreneurs are known to bring new ideas to the industry and do things their way or combine them with conventional methods. They also creatively find solutions to problems given their limited resources, as they aim for their business to expand and grow.

Your employees are just as important as they bring in their time, expertise, and knowledge to the business–for example, Uber, whose first hires included an intern who later became an executive.

Indeed entrepreneurs need to foster a growth mindset and recognize that there is room to develop their skills and abilities, be it through continuing education and professional networking. This growth mindset is key to innovation in the face of change.

As you grow into your role as a founder and learn the ropes through first-hand experience and education, you are shaping yourself up to be an expert.

Reality: Entrepreneurial success doesn’t require being an industry expert initially. It’s about having a growth mindset, doing thorough research, and leveraging the expertise of your team to innovate and evolve in your niche.

Myth 9: The Market Is Too Saturated for New Entrants

A market can be saturated for new and old players. The situation will be more challenging for new entrants that need to first establish who they are and earn the trust of customers. Consider this myth a challenge to know your market and come prepared to thrive and succeed.

Market saturation occurs when the demand for a product decreases as more businesses offer the same product or the demand has been satisfied and there seems to be no growth. Sometimes the business has to lower its prices to stay competitive, which strategy is not really that effective in the long run

Ideally, you’ve done your research prior to opening your chosen business. Here are more ways to overcome a saturated market:

• Find your niche: Focus on a specialization in your market. This will make your product unique, specific, and easily identifiable among similar products.
• Create a unique value proposition: Your unique value proposition (UVP) tells prospective customers why your product is different, how it adds value, and why it is better than the competitor/s.
• Be exceptional: Newer can be better, right? You can position your business as one that does its products well consistently and offers them at the best price.

If you are creative and innovative, all other things being equal, there’ll be room for you in the market. Warby Parker recognizes that glasses are expensive and professes to be that alternative in the eyewear industry. According to the company, it has distributed over 15 million pairs of glasses under its buy a pair, give a pair program.

Another example is Canva. The platform for graphic design has stood out by being user-friendly to anyone, including those with minimal editing skills. As of this writing, the platform has 130M+ monthly active users.

Reality: Market saturation isn’t a barrier to entry. Success is possible by identifying a niche, offering a unique value proposition, and consistently delivering quality.

Myth 10: Failure Equals Defeat

If you’ve reached this part, you’ll know that failures can arise from bad business decisions, ideas not working out as intended, or the market not responding as expected. It’s exactly why some startups pivot and try again. While there’s no guarantee that the change of strategy or direction will work out, the idea is to try until you succeed.

The fear of failure may have stopped some from stepping out of their comfort zone and trying something new for their business, assuming that they have done the necessary planning and preparation. This fear may have also stopped others from considering popularizing a pain-point solution, assuming again that they’ll work on the execution.

Your story as an entrepreneur can be rife with failures and wins. And while this may sound overly optimistic, acknowledging your mistakes and learning from them may put you in a better position than when you first started out and as you move along.

Think about the many entrepreneurs who didn’t give up right away and what they’ve achieved after trying again. Bill Gates and Paul Allen had Traf-o-Data, which they started as a more efficient way to measure traffic flow patterns. The venture ultimately failed, but Allen considered it essential in preparing them for Microsoft.

The example above shows failure as a stepping stone for success. Errors also don’t define a person or the company, as in the case of Jeff Bezos’s errors at the trillion-dollar company. Fire Phone, Crucible, and Amazon Local belong to a list of Amazon products or services that flopped.

Reality: Failures in business, such as bad decisions or the market not responding as expected, can serve as stepping stones for success. They do not define a person or company.

Conclusion

Congratulations! You’ve reached the end of this post and, hopefully, the beginning of your entrepreneurial journey. Take these little nuggets of wisdom with you on your journey:

1. You don’t need a lot of money to start a business. Plan and prepare accordingly.
2. A great idea doesn’t guarantee success. You need to pair it with execution.
3. You don’t need a formal business education. It’s an advantage but not a requisite to starting a business.
4. If you build it, they will come only if you actively ask and attract those customers to come to your business.
5. Instant success is a myth. Good things take time.
6. You need not be the proverbial risk taker. Learn which risks are worth it and have a plan on how to minimize risks and threats.
7. Work-life balance is possible, although it’s a setup that varies by entrepreneur.
8. You don’t need to be an expert to start a business. However, recognize that you have room for growth and will need support from experienced people.
9. A market can be saturated. That’s why you need your business to stand out.
10. Failure is not defeat; it can pave the way to growth and success.

As an entrepreneur, proceed with optimism, patience, perseverance, and purpose. The successes of others may be something you can replicate, although the best thing about entrepreneurship is you can try to carve your path.

But the biggest takeaway is to be realistic and aware of the actual conditions and requirements of starting a business with the intent of making it successful. That’s why we cleared some of the leading myths about entrepreneurship for you.

Additional Resources

Here are additional resources, mostly free, for current and future entrepreneurs

Business courses

• Santa Clara University’s My Own Business Institute (MOBI) free online business courses: https://www.scu.edu/mobi/

• Class Central’s free or free to audit entrepreneurship courses: https://www.classcentral.com/subject/entrepreneurship

• Sources of data and trends for competitive analysis, as compiled by SBA: https://www.sba.gov/business-guide/plan-your-business/market-research-competitive-analysis

Entrepreneurial groups and networks

• US Chamber of Commerce for resources: https://www.uschamber.com/co/chambers
• National Association for the Self-Employed for day-to-day support: https://www.nase.org/
• SCORE for finding mentors: https://www.score.org/
• Business Networking International for referrals: https://www.bni.com/
• LinkedIn for joining groups: https://www.linkedin.com/help/linkedin/answer/a544795

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