Have you heard the saying, “You don’t know what you don’t know”? This means if you haven’t played a particular sport, for example, you aren’t going to be a pro the first time you try. The same goes for business: If you haven’t owned one before, then there’s a lot to learn – and that’s okay! This guide has what to know before starting a business, including dispelling common myths that stand in the way of your small business growth.
What are the common entrepreneurship myths?
Maybe you’ve spent years perfecting your pastries or invented a new way to deliver a much-needed service. You want to bring your goods and services to the world, but you think it’ll be too expensive to start a business, or you don’t feel like you have the knowledge, experience, or support you need to launch.
The fact is that all of these things you think you’re lacking – expert advisors, business mentors, small business financing, and much more – are available to you. You just need to know where to find them. Here’s what to know before starting a business by dispelling common misconceptions, and where to find the help you need.
Myth #1: Your product or service needs to be perfect before you can launch.
Reality: Owners of successful small businesses have tons of stories about mistakes they made along the way. The key to their success isn’t simply resilience, timing, or luck – it’s that they also realized the best way to improve their products and services was to get them on the market, listen to customers, respond to feedback, and keep moving forward.
You can’t learn a sport simply by reading about it or talking to others – eventually, you have to play. The same is true for business. Don’t let a quest for perfection stop you. Owning a small business often takes some trial and error, so take the plunge, make mistakes, learn, improve, and keep going.
Myth #2: You’ll never have the right connections needed to be successful in business.
Reality: It’s true that some small business owners have strong business networks, but it’s also true that most people aren’t born with them. Instead, many entrepreneurs spend a lot of time building connections and taking advantage of free resources for small businesses – and you can, too.
Organizations like Small Business Development Centers (SBDCs) and SCORE offer a wealth of guidance for entrepreneurs, whether you’re just exploring business ideas or are ready to expand to new markets locally, internationally, or anywhere in between. Your local chamber of commerce, community-based entrepreneurial-support groups, and more can help, too! And the amazing thing is that every connection you make will lead to more.
Myth #3: Starting a small business takes boatloads of money you don’t have.
Reality: Many small businesses can launch for far less than you may think. For example, a food-based business can start inexpensively by using a shared commercial kitchen and selling at a farmers’ market stand or from a mobile cart before investing in a location. A retail store can start as a pop-up shop or a kiosk at a mall. And a wellness-services entrepreneur can launch from a shared space, like a suite of mini-salons.
The key is to create the simplest version of your products, services, or business – this gives you the chance to test your business concept without getting in over your head with expenses or putting all your personal savings or assets at risk. It’s an adaptation of The Lean Startup’s minimum viable product (MVP) business model to focus your time and resources on your core business – the essential products or services you want to offer.
You can learn a lot during this phase and, when you’re ready, you can then leverage what you’ve learned for the business’s next phase, including securing small business loans and grants.
For a small business start-up loan, a reputable lender will also require you to contribute to the start-up costs. This is because all lenders want to see that you’ve made a financial commitment to your business, too. Small Business Administration (SBA) loans only require a 10% equity investment from you, which is less than traditional bank loans. Here’s an example to help explain:
- If you want to secure a storefront for your retail operation and your business plan shows you need $50,000 to get the space, inventory, and staff, you’ll need $5,000 (10%) as your owner-equity investment.
It’s important to know that it’s possible that some or all of the funds you’ve used to start your business – including buying equipment, paying for legal or accounting support, marketing or branding expenses, and fees to file or get licenses – can be used toward this equity investment.
Keep this in mind as you start to launch – even small amounts add up, and by the time you’re ready to apply, you may already have invested enough in your early launch to meet the owner-equity requirement.
There are also some small business loans designed specifically for the startup phase. For example, eligible New York State small businesses can apply for the Main Street Capital Loan Fund, as well as eligible Pennsylvania small businesses with the Flex Loan through Pursuit, both of which are designed for new and early-stage small businesses. Other small business lenders may have similar programs or others for new businesses, too, so talk to them about your plans.
Pursuit can help you start
Now that you have a better understanding of what to know before starting a business and how ownership may be closer than you think, take a look at the free resources available through Pursuit.
We’re a leading small business lender serving businesses across New York, New Jersey, Pennsylvania, Connecticut, Nevada, Illinois, and Washington. We offer loans and a line of credit for working capital, commercial real estate, equipment, and more. You can use these funds to boost inventory and staffing, market your business, and cover just about any small business need.
Start your application to learn how we can best serve you!
