As an entrepreneur, it’s difficult to tell what’s sound advice and pure myth. In the face of starting a new company, it’s completely understandable to be unsure of every decision, especially if you’re establishing a new business for the first time.
Citing data from the National Venture Capital Association, CBS News explained roughly 20 percent of startups bring return on investment for investors in the case of companies supported by venture capital. Another 40 percent outright fail, and an equal number experience moderate success. Here are three myths that entrepreneurs should understand before they begin their journey toward creating the next Facebook.
1. Becoming rich is the ultimate goal
Elaine Chen, senior lecturer at MIT’s Sloan School of Management, explained amassing vast amounts of wealth and riches is a poor foundation of any kind of business. The most notable entrepreneurs – Steve Jobs and Bill Gates, for instance – were invested in the ideas, process, and functional outcomes of their business models. They’re infused with passion for the concept and assume a risky position fully aware that they might fail. It is the opportunity to succeed that helps drive them. If you focus solely on profits and increasing revenue at all costs, it’s likely you’ll cut corners in other key areas of running a business, such as client relationship management and quality assurance.
2. An IPO or sale is your saving grace
Although it’s a smart idea to plan ahead, focusing on how to exit your company at the first possible moment will likely prove to be an unstable path forward, according to The Next Web. An invested entrepreneur who sets his or her sights on long-term viability will typically last longer and develop a stable small business instead of a boom-and-bust startup. If you’re truly invested in becoming a sustainable business, the opportunity to sell or pass on your business will arise.
3. Clients are always right
Unfortunately, this age-old business adage doesn’t always hold up for entrepreneurs. In many cases, new businesses are offering a product or service that consumers haven’t seen before, leading them to have doubts. What’s more, Jackrabbit Janitorial owner Kyle Clayton explained customizing your product for every client that comes along will ultimately be inefficient and impossible. When starting a new company, you need to focus on your product and, when financially viable, cater to specific client segments. However, Clayton advised holding true to your values and your product’s integrity.