9 Myths that Could Hurt Your Small Business
Starting a business is an act of optimism, since most new businesses fail. Subscribing to any of these common myths could lower your odds of becoming one that goes the distance, whereas embracing the realities they belie can help set you up for success.
Myth #1: Profits matter more than cash
If you’re turning a profit but have no cash in the bank after you pay your bills, what’s the point? Tage Tracy, on-time CFO and co-author of “Cash Flow for Dummies,” calls this concept being “in the black but where’s the green?”. Tracy said too many business owners fail to understand the amount of capital and cash that’s required to operate and grow their business.
The reality: Cash is king. Manage your cash flow using a cash flow forecast to know where you really stand.
Myth #2: If you’re good at what you do, you’ll be good at running a business
You might make pick the cutest shoes or cook the perfect pancakes or brew killer coffee, but that doesn’t mean you’ll excel at monetizing that skill.
“To run a business you have to do everything else like marketing, managing, handling finances, hiring, firing and doing that task at which you are good,” noted Alex Genadinik, a small business coach and marketing consultant. “Most businesses fail because the founder is good at their original job, but everything else in the business gets neglected.”
“The entrepreneurs who succeed are the ones who are able to step outside of their comfort zone and learn new skills that are needed for the business to succeed.”
The reality: Learn the business skills you need, hire an expert who has them or outsource critical business functions.
Myth #3: Your product or service should please everyone
“The biggest myth I hear is that having a niche means you’re limiting your opportunities for business, while the opposite is true. When you specialize, people come to you for your products and services instead of having to advertise and sell to them,” said small business marketer Perryn Olson, currently marketing director at My IT.
“Having a vertical or specialty also helps you to refine your business processes, minimize training and charge more for your work. “
“Business owners seem to get so caught up in the competition that they fail to identify their own identity and what makes them unique,” said Deborah Sweeney, CEO of small business document filing provider My Corporation. “A competitive analysis is great, but I think the ‘old-school’ MBA/business school approach may hold a business back. I find that my competitors are often so focused on each other that they forget how to be different.”
The reality: Be different from your competitors, not just better or cheaper.
Myth #4: All business is good business
“Small businesses need to be more selective of who they accept as clients and customers, and need to be honest with those that just aren’t fit for their service,” said Ajay Prasad, owner of digital marketing agency GMR Web Team.
“I’ve seen plenty of small businesses struggle by bending over backwards for clients and customers that just weren’t right for that business’s specialty and the services they offered. Once they became more selective, their service and customer satisfaction improved — as well as their ability to get more new customers.”
The reality: Cater to the customers you really want.
Myth #5: You need to be everywhere on social media
“You must exist online today to be taken seriously,” said Paige Arnof-Fenn, founder and CEO of marketing consulting firm Mavens & Moguls. But that doesn’t mean you should be active on every platform. You probably shouldn’t. Pinterest and Instagram may or may not be right for your business.
And, said Arnof-Fenn, be sure to tell a consistent story across channels. “When you try to be cool/a partier on Facebook/Instagram and very buttoned up on LinkedIn, it may raise a question as to who you really are. Authenticity is key.”
The reality: Be active where your audience, or the audience you want, is.
Myth #6: You need a blog
If you’re not going to blog effectively, don’t bother, suggested Brian Jensen, CEO of digital marketing agency Congruent Digital. “Many small business owners who are currently blogging have little to no understanding of how this activity is benefiting their bottom line. The truth is that without a well planned-out development and promotion strategy that targets customers through phases of the buying cycle, this activity is typically fruitless.”
The reality: Know your blogging goals, create the right content for your audience and blog consistently.
Myth #7: Your social media posts should be all about you
“There’s a myth prevalent among small business owners that their social media presence should be primarily about their brand, products, services, and people to be effective and produce some amount of ROI. This simply isn’t true,” said Michael Herman, founder of Red Drop Digital.
“Twenty percent of small businesses see a positive ROI, to varying degrees, because they shift the majority of their social posting activity toward the needs and interests of their ideal customers. This group of businesses understands how providing a consistent stream of links useful, third-party resources tells the right kind of story about them. This gives the brand permission, in the customer’s mind, to speak to them about how their products or services solves their mutually understood pain points.”
The reality: If it doesn’t interest or serve the customer, the post is pointless.
Myth #8: If you build a website, they will come
“As an SEO company owner who focuses on local businesses, I’m amazed how many business owners I talk to spend thousands of dollars on websites but regard SEO as an afterthought. To do that is to buy an expensive brochure instead of creating an automated lead generation machine,” said Eagan Heath of Get Found Madison. “Every business needs to think through their entire sales funnel, including the top: how will customers first discover them?”
The reality: If you’re not an SEO expert, consult one to optimize your website and make the investment pay off.
Myth #9: You can’t (or shouldn’t) take a vacation
Said Arnof-Fenn, “For the first 5 years after I started my business I worked all the time. I was scared to go on vacation for fear all my hard work would unravel.” But a series of illnesses in the family forced her to work less in order to take care of her relatives — and later, herself.
“I had to take very good care of myself or I would not have been helpful to anyone else. I started working out every day. I started planning ‘me’ time on my calendar. I became more comfortable with white space in my day and stopped overscheduling myself. And guess what? My business did not suffer, in fact it has become stronger. We moved up the food chain and have better clients. I enjoy my work more now than ever before. I am having more fun.“
The reality: Taking time off is good for your productivity and sanity. And a well-run business should be able to function without you for a short while.