Destroying 8 Entrepreneurial Myths
Dmitry Trepolsky lists 8 myths about the activities of entrepreneurs and cites counterarguments, citing prestigious international studies
Our country has been part of the global market economy for 28 years. Its important component is the level of business culture in the country. Often, business literature and the so-called “success training” can generate myths about the activities of entrepreneurs. We have gathered such common myths and refute them with the help of international research.
Myth 1. Own business brings more pleasure than hired labor.
Running your own business is synonymous with success. Obviously, entrepreneurs enjoy life and enjoy the growth of their business.
Own business requires not only cash costs, but also a very large amount of time. Therefore, other areas of life suffer greatly from this.
A study by Simply Business (which provides insurance broker services) showed that more than one million small business owners in the UK are threatening family and social lives because of work. In particular, 750 thousand of them cannot spend summer holidays with children. In addition, nearly half a million entrepreneurs cancel their planned events with friends and families at least once a week because of work.
Thus, for people who want to spend as much time with their family as possible, an intensive work schedule causes severe stress. Lack of free time for many people is becoming a serious problem. In 2015, scientists from the University of California San Francisco, University of California Berkeley, Stanford University conducted a study of the state of mental health among entrepreneurs. Of the 242 entrepreneurs, 49% said they had psychological problems, including 30% suffering from depression. In addition, in the UK, 18% of entrepreneurs reported that stress at work affects their business.
Given these data, not everyone is happy with their own business, because other aspects of life suffer from constant employment. For a significant number of entrepreneurs, this is burdensome from a psychological point of view.
Myth 2. A business plan does not improve the process of conducting a small business.
In order to start a small business, the main thing is to have an idea and a desire to create it. But a business plan will not help, because it is needed only by large companies.
The North Carolina Network of Small Business Centers, which teaches and advises new businesses, has explained the importance of the business plan. Most business startups crash for three years. It is a business plan that will help you notice your problems on time. This is the so-called roadmap that shows where and how your business is moving.
A business plan is a document that describes the basics of a business, products and services, the market it focuses on, business goals and milestones to achieve them. During a growth period, a business plan is useful for predicting company expansion. It may include strategies and deadlines for the sale or closure of the company, if necessary.
The Australian Center for Entrepreneurship Research has found that business planning for small firms has a positive effect, but it is culturally sensitive. In particular, the positive effect is much weaker in countries characterized by a high level of “leaving uncertainty,” since the creation of new enterprises is associated with a high degree of risk.
The term “leaving uncertainty” appeared in the 1970s as a result of a cross-cultural study conducted by Dutch sociologist Geert Hofstede in 70 countries around the world. It turned out that in countries with a high degree of “care”, residents are struggling to adapt to economic, political or social changes. In addition, they are constantly worried about the potential loss of stability. In particular, they are trying by all means to stay in the workplace, even if they are not satisfied with working conditions or wages. People in such societies value stability so much that they are often not prepared to take risks, even for the sake of positive change. Therefore, in these countries it is more difficult to start your own business.
But in countries with a low level of “leaving uncertainty” there are much fewer formal rules and people are easier to adapt to changes and new situations, change professions, create new enterprises. Therefore, business planning is much more effective here.
In addition, 72% of founders find that their intellectual property is not a competitive advantage (according to a report by startup research company Startup Genome). This means that just an idea to build a successful company is not enough.
Comprehensive product planning is important, including market analysis and rationale, competitive product analysis, pricing analysis, manufacturability and return on investment.
As for startups, it is important to properly plan the growth of the project.