in General

Myths of Entreprenuership

So, you got a small business, its up and running (finally) — does this make you an entrepreneur? What is the difference between running a business and being an entrepreneur — and does it really matter?

According to the highly acclaimed book “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” by Michael E. Gerber as well as the many other E-Myth books that Mr Gerber has written — a small business isn’t the same as being an entrepreneur.

IDEA #1 – There is a mythI call it the E-Myth – which says that small businesses are started by entrepreneurs risking capital to make a profit. This is simply not so. The real reasons people start businesses have little to do with entrepreneurship. In fact, this belief in the Entrepreneurial Myth is the most important factor in the devasting rate of small business failure today.
— Michael E. Gerber, The E-Myth Revisited.

According to the E-Myth you should be building a business that you can either sell at a great profit, or a business you can franchise and again sell off your success formula.

The concept of the E-Myth is that most businesses are not started by entrepreneurs, but by people with a skill or passion and that most they fail because they remain in the technician’s mindset, instead of learning to think like an entrepreneur and a manager.

But what other myths are there?

  1. The myth of “being your own boss”: You are not your own boss when you own a business. Your customers are you’re boss. Your bank is you’re boss. Your fixed costs are you’re boss.
  2. The myth of “independence”: Who are you independent of? What are you independent of? Owning a business doesn’t make you independent; being financially secure makes you independent. As long as you need money or customers, you can’t be independent.
  3. The myth of escape from the rat-race: Too many people think that working for ones-self is a great break from the rat-race. You should be prepared to work harder, longer and be more stressed than you ever have in your life. When you work for yourself you have to attend to sales, marketing, promotions, advertising, doing the books, buying things, getting on the phone
  4. The myth of customer demand: Nobody really knows if theyll be a demand in the marketplace for your products or services. Sure you can ask 1,000 people but will they actually buy it?
  5. The myth of quality: You sell your products, goods and services theyre USP (unique selling point) is quality. Never say I sell quality products or I provide quality services. Quality means different things to different people. Indeed, some argue that the customer, not you, who defines quality. In either case, quality does not exist in the real world unless you quantify the benefits of your product/service.
  6. The myth of no bad times: You have 3 or 4 great months, with money rolling in the door. You get stupid and start buying everything you ever wanted and then the money STOPS! Business income can vary wildly so make sure you put money aside for those “bad times”
  7. The myth of no/less paperwork: Everyone hates paperwork but it must be done. Remember, as the advertising world says — if its not written down, it doesnt exist.

But does all this really matter? Isn’t running a business enough in itself? Why bother being more than a business-person? Why be an entrepreneur at all?

I believe entrepreneurship is really a way of thinking and doing — rather than a way of living or being. You can’t physically get a job as an entrepreneur unless you create it yourself by thinking your an entrepreneur, more than just a business man — more than just out to make some money.

Running a business is hard, but the rewards are just as good – if not better. If you can overcome these myths you’re already half way there.