9 Small Business Myths Debunked
There are many misconceptions and myths that surround small business in this day and age. These myths range from those concerning security to those surrounding the big picture of entrepreneurship. Most security myths we hear of revolve around the fallacy that small businesses are simply not as susceptible to breaches in security because…well…because they are small, and targeting them is simply not profitable for hackers. This couldn’t be further from the truth as the overall cost of cyber-crime for all businesses is supposed to top $2 trillion by 2019. Small businesses tend to have lower security defenses, and the cyber-hacking community now realizes this fact. From a big picture perspective, small business myths run rampant from onlookers and direct participants wrongly thinking that being an entrepreneur means more free time to another misunderstanding that a small business’ product or service has to be completely unique to thrive. Let’s take a deeper dive and explore nine small business myths that we come across quite frequently.
MYTH #1: The Concept of “There not Being Enough Money to Go Around”
The economy has its ups and downs…it’s usually cyclical but it’s also unpredictable. This country’s most recent recession hit a lot of small businesses and enterprises very hard. Ironically, this has absolutely nothing to do with the availability of funds for small businesses. Startups and small businesses get a lot of funding from banks and venture capitalists. It is the job of these funders to lend money to your business. In fact, it is a venture capitalist and bank’s job to lend you money; it is their money that needs to be invested in you so that they can be profitable. Thus, there is plenty of money to go around so you can begin building, operating and maintaining your business.
MYTH #2: Starting a Business will Allow for More Free Time
A lot of startups have a theory…the theory that, because founders are their own managers, they will be able to control their schedule and work at their convenience. In fact, the complete opposite is true. All the efforts of owning and operating a business, particularly a startup, are ultra-time-consuming. When successful entrepreneurs look back on a successful business they created, they will all tell you that they worked harder for themselves than they ever did for anyone else.
MYTH #3: Being Unique is the Name of the Game
This myth is particularly frustrating to individuals who have seen this misconception ruin a small business. Everyone wants to come up with the “next big thing” or have the “next great idea”. Ironically, successful startups are not all about being unique; most successful small businesses piggyback on the ideas of others. Sometimes, success comes from being a follower and not a leader, especially if it’s your first time around the block as an entrepreneur. If you are a small business owner, realize that the small business success equation for an untested idea, service or product may have too many moving pieces for a small team to manage. A majority of startups look at what has worked well for predecessors and subsequently looked at the failures and successes of those predecessors. With this knowledge, a startup or small business learns from those failures and mistakes and makes sure their respective business doesn’t fail in the same ways and excels where success was achieved.
MYTH #4: The “Field of Dreams Analogy”: If you Build it, they will Come
Life is not always fair. So, even if you have a fantastic idea, work hard, do your best and offer your product or service at a reasonable price, you might not make it as a business. Sometimes, in a small number of cases, hard work does pay off but that is rare. While counterintuitive, your small business should focus far more on marketing itself. Marketing is an absolute, and we cannot emphasize that enough.
MYTH #5: If you’re an Entrepreneur, you’re a Lone Wolf
It’s the “American land of opportunity” thinking that entrepreneurs are here to disrupt the status quo with magnificent ideas. This is not a truism- it is far more true that entrepreneurs are not revolutionary solo acts, but rather incredible team players and team builders. Let’s look at one solid example just for clarification: Steve Jobs and Apple. Jobs was a visionary but he did not build Apple by himself- he had the assistance of many other talented individuals.
MYTH #6: Small Businesses are not Susceptible to Security Breaks
The most successful enterprises invest billions and billions of dollars on security development, and associated research, to prevent cyberattacks. Small businesses should take a hint from these enterprises and integrate big business’ robust security features into their own entrepreneurial efforts. Here are some of the most important precautions that you can take as a business attempting to thwart cybercrime:
- Misplaced or Stolen Devices: Monitoring employees within your company who use particular devices which contain sensitive information is very difficult. This is especially relevant if these employees are in different locations. Not only is the initial monitoring difficult but what happens if a device is lost or stolen? As a small business, make sure data is encrypted.
- Weak Passwords: As mentioned, hackers are getting smarter and smarter. In tandem, your business needs to get smarter and smarter when it comes to the creation of passwords. Fingerprint identification is popular but it’s expensive so, if you don’t have enough money to support such a feature, at least require a capital letter, number and special character be present in any passwords.
- Outdated Technology: A recent study revealed that business revenue is increased by 15% when that business uses the most updated technology…the positive correlation between job creation and good technology is also very high. This translates into a gigantic impact on small businesses. In case it’s not clear enough, another recent study revealed that over 90% of consumers/clients would refuse to work with a company whose technology was archaic. Simply put- keep on top of security updates.
- Employee Error: In this case, we are talking about an employee opening emails that contain viruses or clicking on an infected link. The best way to prevent this from happening is to properly train employees, implement built-in anti-phishing detection for emails and block employees from certain sites known to contain viruses.
- Data Backup: This one is easy- have a data backup system to reduce loss should a security breach happen. Consider using the cloud…
MYTH #7: Security is not Available for the Cloud
Most small businesses cannot afford an in-house IT department so they consult with external experts or maybe try to handle IT issues by themselves. It’s been duly noted that more than a few small businesses are transferring physical data to the cloud because of the cloud’s affordable security benefits, among other benefits such as the cloud’s offering of the latest security advances. The point here is that the cloud is definitely secure.
MYTH #8: My Security has Never been Breached so Everything is Fine
Cyber-security experts have a joke that they often say…they say there are two types of companies in the world: those that have been hacked and those that have not been hacked…yet! Sadly, according to another study, this is very true. Based on findings from the Ponemon Institute, 170 days (on average) are needed to detect a malicious cyberattack. 365/24/7 security is critical to the survival of any business and prevention of devastating security breaches. Remember though, as businesses get smarter, so do hackers. Stay on top of your security!
MYTH #9: Entrepreneurs are Only in it for Money
This is one of our favorite myths to dismiss. Entrepreneurs are largely classified as entrepreneurs because of a passion and motivation that runs far deeper than garnering a profit. Everyone needs money but entrepreneurs, for the most part, have aspirations that extend far beyond profit- startup and small business owners are idealists and optimists…seeing a profit is not always a priority…it’s often just the icing on the cake.
Thomas Huckabee, CPA of San Diego California is an expert in debunking the myths surrounding small businesses and startups. Please contact our office for further information.