Bust myths of small firms
NO DOUBT we all remember the fantastic stories told to us by our parents (or, if we were advanced enough, we read ourselves) that filled our heads with what later proved to be myths. Tales of knights, castles, dragons and princesses ... all with a happily-ever-after.
Unfortunately, over the years, a similar trend has occurred in small business. Some of the ideas that I hear of when it comes to owning and operating a small business are unbelievable, and in many cases, downright dangerous (wearing your super-cape will not guarantee your ability to fly).
So, in the interests of reality, let me burst a few bubbles:
When you own the business, you are the boss.
In starting your own business, you may have thought you'd "got rid of the boss". Unfortunately, in many cases, the law of substitution applies - and instead of having a boss, you now have clients, customers and the bank ... and maybe even employees! Staying in control and managing your own business requires discipline, focus and a strong sense of what you are trying to achieve.
You can have holidays whenever you like.
Regular readers will know that one of my mantras is "small business owners need to take holidays" - so this may seem like a contradiction. Unless your involvement in the business is purely as an investor, you will not be able to take as much leave as you like, when you like. Any business owner who has any operational responsibilities will need to attend to those responsibilities to ensure that their business keeps on running. You may be able to delegate significant portions of your role and eventually become an investor, but that requires significant time and effort on your part.
The customer is always right.
I hesitate to say that the customer is rarely right ... but in many situations that is correct.
What we really need to say is that the customer must be respected, but more importantly, helped to realise that your business has their best interests at heart. If that is not the case, you won't be in business for too long! It is therefore important for you to educate your customer as to the value of your product or service.
You have to spend money to make money.
As an accountant, this is one myth particularly dear to my heart. Unless you can see a clear connection between the spending of money and the return of that money and more (have you heard of return on investment?), you really need to consider carefully whether spending the money is a wise move. This applies for all expenses of your business, including investments in equipment and technology.
The sad thing is, it has taken me 10 minutes to think of these four myths ... and if I had more space, I could probably think of another four without any trouble.
Maintaining a grip on reality is important - don't believe everything you see or hear.