Three Myths with Starting a New Business

Myths about starting your business

The past few years have brought a lot of change, including the push towards working from home. However, too many skilled Americans hold back from starting a new business because of fear which stems from myths.

Here are the three myths that I believe contribute to caution when it comes to starting a business:

Your New Business Should Lose Money

There's a common phrase, "I know I'm going to lose money the first two to three years, but I'm ready to take on that financial burden and invest in my company." While this can be true for a few big startups that require substantial capital and therefore take time to recoup those funds and pay off investors, it's not true for most small businesses and can actually be a red flag. When you expect to lose money for a few years, it affects your pricing, your willingness to outsource, and most importantly, your ability to invest in what you need most: financial guidance and mentorship. The IRS actually states that if a business is losing money for more than three out of five years, it's not an actual business, it's a hobby (unless you can prove otherwise). What does this mean? It means that the government and financial institutions believe that your business can make money within the first couple of years, otherwise something is wrong with your business model. Your prices are too low, you're overpaying for products or your monthly costs are too high, you need coaching on hiring and training employees properly to get the value, or you need basic financial advice to understand cash flow management, budgets and how to evaluate and restructure your business on a quarterly basis.

The economy, technology and human interests are always changing. Your business should be designed from the beginning to not only adapt to those changes but be at the forefront of them.

Quitting Your 9-to-5

Not all entrepreneurs have to risk it all, quit their 9-to-5 and then struggle financially for months just to get started. There are numerous ways to work on a business after hours or on the weekend, if you have the passion and motivation and are not in direct competition with your day job. The best businesses start small and come from a passion you already enjoy doing on the side; it just takes a little creativity to turn that passion into a side hustle. Everyone's story is different, but starting a new business takes a LOT of work, from designing your brand to establishing the correct marketing sources, creating enough product to launch with and investigating the appropriate prices you should be charging.

Tips for starting while working:

• Set a deadline to increase motivation
• Build your social media presence, website and brand
• Create prototypes or build inventory to prepare for your launch date
• Budget, forecast and calculate overhead, expected costs (add in unexpected costs) and fixed versus variable costs to estimate pricing for services or products

You can do all this from the comfort of your home after work hours and without the stress of replacing your paycheck!

I Have to Do It All

Here's the honest truth: Nobody does it all. It may look like there's people who are the perfect partner, parent, friend, community supporter and entrepreneur, but the big secret is that they have help! Building a team that works for and with you is a crucial step to building the business and life that you need. Whether that's hiring an accountant or tax professional to help keep your records clean and consult on business growth strategies, or a marketing guru, an employee, or even a nanny, housekeeper or meal kit to help ease the burden and stress at home. A team can also include a lawyer, business coach, mentor, therapist and financial advisor. You don't have to see or use these resources all the time, but it's important to build that network so they're available as you need them. They keep you and your business healthy and thriving.

We live in a world where it feels impossible to become an entrepreneur – both partners often have to work, kids are getting more expensive, 401(k)s need invested into and the list goes on. Successful (and happy) entrepreneurs analyze where they want to spend their time and outsource the rest. Is your business thriving but you need to spend more time this month on podcast episodes, producing products, working long hours or marketing?  Hire a nanny, a cook (or pay for a meal kit), a housekeeper, anything that helps you dedicate the time and energy you need to your business. Feel like you need a few weeks off to travel or spend time with your family? Hire a virtual assistant to handle emails and phone calls, or a part-time employee to package and mail products. Time is the one thing that we cannot get back, so do what you need to do to retain that passion and creativity while working hard to grow your business.