14 Common Misconceptions About Setting Up A Startup
Thinking that you can do it better isn’t necessarily the start of a great business, and it’s hopefully only one of the personality traits that pushed you out on your own in the first place. There’s a fine line between confidence and arrogance; something of which we must be ever-vigilant to make sure we don’t create barriers between ourselves and our potential (or that of others).
And, so it follows that you might just have a few misplaced expectations about what it takes to be off and running. Well, consider for a minute how crazy it would be to start ‘building a house’ by running off to shop for carpet and light fixtures (and kitchen appliances), before you have a working floor plan or the first footings dug for your foundation.
Obviously, unrealistic expectations could mean the loss of time and money, forcing you to unravel and rework your game plan from a negative position. It’s always better to lay out the framework and tasks, get feedback where you can, and proceed with caution while keeping your wits about you.
The following are fourteen common misconceptions about setting up a startup – as well as suggestions on how to turn them around:
- Failure Is Not An Option – In fact, making errors and tripping over your shoelaces is to be expected along the way. How you react to setbacks and are able to shift and adapt is the barometer of a successful entrepreneur. You can’t always be right. If you were, then you would have nothing to learn or absorb, and it would make you a very boring person.
- Hard Work Breeds Success – Not necessarily. Though a strong work ethic is a necessary ingredient, the amount of effort doesn’t always get you to the goal line. You have to work smart, which means you need to streamline processes, invest in good people, and make good decisions based on meaningful data.
- All Advertising Is Worthwhile – Actually it isn’t. If you aren’t targeting the right market for your products or services, you’re effectively using a ‘shotgun’ approach hoping you’ll hit something. If you’re paying decent money for a display ad in a neighbourhood paper that is tossed in the garbage 99% of the time, it’s a definite waste of your marketing spend. If you’re not taking advantage of digital marketing, you’re hiding your light under a bushel.
- Who Needs A UK Startup Attorney? – You do. A contract solicitor for startups is one of the first connections to make, and if the UK is where you plan to do business, why would you choose a lawyer in another hemisphere? You’ll need to be aware of your business structure options, and why a specific entity would be the best for your situation. Disclosures and contracts are some of the more important elements you’ll deal with – to protect your business and solidify the agreements with your clients. It’s costly to go back and correct legal mistakes after the fact.
- My Way Or The Highway – Well, this isn’t going to win you friends or influence those you need in your corner. There aren’t very many instances where this idiom wins you results. If you lead with purpose and sincerity, others will follow without being told to do so. Doing something ‘your way’ only works with a whole lot of added ingredients – like integrity, vision, energy, power and work ethics, to name a few.
- I Can Do It Alone – On the contrary, you really can’t. Not only is feedback essential in tailoring your services to the current market, but when you don’t validate the ideas of your partner (or employees) they’ll resent you and work against you. In addition to legal assistance, you’ll want to have an expert financial advisor. And then there are mentors, business incubators and accelerators. These days – especially in the UK – there is a plethora of advice and support available to get you to the goal line (when you succeed, it goes around full circle and the nation benefits as well).
- Business Plans Are Worthless – No, they aren’t. People think they only need to create one if they need a bank loan. In reality, a business plan can be one of the best ways to set goals, analyse what you’re doing wrong, and make sure you’re on the right path.
- Websites Aren’t Necessary – Of course they are. In today’s 24/7 global marketplace, people don’t make phone calls when they’re ready to buy. They search the web – for a nearby location, the hours the business is open, who owns the company – and that’s for starters. A company site can connect with prospective customers, letting them know what you value and the type of products or services that you sell. It will also help to answer their questions when you’re not available (or sleeping).
- Lower Prices Means More Clients – Maybe for the first time, but if your customer isn’t happy with the result, no amount of money will bring them back. Coupons and discounts galore are more prone to make a consumer wonder why you need to do this. On the other hand, if you ask for what you’re worth, they’ll likewise reason that you’re probably right.
- Competition Doesn’t Matter – It should. It’s one thing to be confident that you’re providing a better and finer product; it’s another to assume that just because you’ve ‘arrived’ on the scene that customers are going to abandon other businesses with which they are satisfied. Test your market before making this costly blunder. If you aren’t watching your competition, you don’t know when you’re losing ground.
- Social Media Is A Waste of Time – You’re wrong. Sure, if you’re thinking of it as ‘the new SEO,’ you’re going about it for the wrong reasons, and people will see it and ignore you. Consider the mediums of Twitter, Facebook, and LinkedIn like social extensions of your business. These are great platforms from which to engage with customers instantly. Emails are seldom going to bring you the same result as a friendly social post. You can also use tweets to link back to new blog posts on your main website, or publish a great article on your LinkedIn page, and even advise your followers about upcoming events.
- I Can Work Less And Play More – If you think that since you have people working for you, it means you can take off for extended vacations, you’re delusional. If an owner isn’t putting in more hours than anyone on their staff, they’re not in touch with the businesses – and it could end up being their downfall. Of course work-life balance is important, and if it’s regularly practiced by you and your staff, that’s different. You need to stay involved and informed, and make sure your employees get time the off they need for personal matters and breathing room.
- Loans are for Losers – On the contrary, big businesses rarely use their cash flow for things like manufacturing materials. Purchasing a company vehicle outright isn’t full deduction, it’s a variable annual depreciation against your taxable income; whereas lease payments are 100% deductible, and you get a new car every few years to boot. Remember that it’s always easy for those who ‘don’t need money’ to get loans, and on-time payments for loans and credit cards help to build your company’s standing for those future larger purchases.
- Trade Secrets Are Impossible to Keep – Actually, no they’re not. You just have to know what you’re doing. Intellectual property policies are just a piece of the whole. It’s also about laying down an engaged company culture, validating employee suggestions and sharing information across all departments to increase loyalty. Your knowledge advantage is your company’s most important commodity, so treat it with the utmost respect and attention.