Owning a small business is exciting and rewarding. But it’s challenging.
Many people start a business expecting that it will make them rich fast. But you must work hard, respect your limitations, learn new skills, take risks, and overcome many challenges before building a successful and sustainable business.
Many aspiring small business owners and entrepreneurs have shared expectations of what it takes to succeed with a new business. Unfortunately, many of those expectations are wrong.
Here are seven common mistaken assumptions most small business owners have when starting their businesses:
1. Getting rich quickly vs. becoming profitable
Many people who start their businesses assume that they can get rich quickly. Your startup will likely take at least three years to become profitable.
This is true even for the most successful companies. For example, the famous electric sports car brand Tesla took a decade to see actual profits.
Companies making new products take more time to become profitable than home-based online businesses. That’s because it costs more to manufacture, transport, and sell products.
On the other hand, you can start an online business with little to no money.
We won't ask for secrets or specifics.
2. Burnout vs. delegating and working smarter
Small business owners and entrepreneurs typically try to do everything themselves to save money. But this can be counterproductive and burn you out.
It’s essential to watch your spending, especially as a new business. But you can’t do everything yourself.
For example, most small business owners and entrepreneurs are not marketing experts. And it’s not always easy or cheap to hire marketers when you first start your business. Thankfully, there are many alternatives today to address this.
Software apps help business owners be more efficient and productive and work smarter, not harder. Apps like Hootsuite and Buffer can help you manage your social media content marketing efforts. Other apps, like Notion and Calendly, can help you increase productivity.
As soon as you have the budget to expand your team, do so. You can hire people directly or hire contractors to help with everyday tasks. The sooner you learn to delegate, the faster your business will grow.
3. Startup life vs. work-life balance
People assume that business owners have a lot of free time to relax and pursue hobbies. This is rarely true, especially for a new small business.
You can only expect this freedom once you’ve built a successful and sustainable business or if you’re superhuman and can juggle everything simultaneously. But none of us are superhuman, and as we mentioned above, it’s challenging to build a successful and sustainable business.
Expect to work most days of the week to help your startup thrive in its beginning stages. But this doesn’t mean you should ignore other aspects of your life such as recreation and health.
Remember that you are your most significant investment. If you’re not healthy, neither is your business.
Find ways to manage your time efficiently and experiment with improving productivity. Use free tools such as Google Calendar or note apps to set your schedule and reminders and plan your day.
We just emailed the checklist to you.
4. Virality vs. strong branding
Many inexperienced entrepreneurs and small business owners think a viral video or ads on Facebook can help them reach profitability quickly.
This is rarely true.
Small business owners waste billions of dollars advertising on social media. And while viral videos can create buzz, they don’t always lead to sales. And more importantly, it’s typically impossible to create virality without spending a substantial amount of money.
Instead of gambling on virality or expensive ads, invest in strong branding.
Branding can make or break your business. Strong branding will build brand awareness and increase brand equity.
Weak branding will make your company forgettable.
Entrepreneurs sometimes assume that their company’s brand identity and overall brand will take shape over time, even if they do nothing proactive to shape that identity. And in some ways, this is true. But your identity is chaotic and confusing when you don’t take proactive steps. It will only hurt your business.
Brand identity is what people see when they engage with your business. Brand identity includes your business name, company logo, website, business cards, marketing materials, social media presence, and more.
You should never leave these critical branding elements to chance. The most successful brands, including Airbnb, Uber, Apple, and many others, carefully craft their brand identity to support their brands.
5. Instant success vs. experimentation
Many business owners fall in love with their product or service and assume people will support them immediately.
This rarely happens.
You must ensure that your products and services are high-quality. That’s the first step to building a successful business. But it would help if you also made adjustments along the way and experimented with improving your products and services to find a strong product-market or service-market fit. Start by asking yourself these questions:
- How can I make my products or services relatable to my audience?
- How can my products or services help people’s lives?
- What useful trends can I utilize for my business?
- What are people looking for these days? How can my business address this gap?
- What kind of people is my target audience? Are they younger or older?
Invest time in studying your target audience to understand them as individuals better. You don’t want to be just another business selling similar products or services. You should strive to build a brand people love.
6. Unique business idea vs. execution
You must embrace this fact to set realistic expectations for your brand.
But that doesn’t mean that you should give up. You can still build a competitive advantage by highlighting your brand’s unique value proposition.
There are many ways for your brand to build awareness, including social media. Instagram, Facebook, Twitter, and TikTok can all be valuable platforms to help promote your small business online.
7. Investors vs. bootstrapping
Many entrepreneurs and small business owners think it’ll be easy to get a business loan or investors – some dream about getting financed by investors on Shark Tank.
The reality is most entrepreneurs and small business owners don’t get angel or venture capital investors. Most investors are unwilling to risk capital on most small business ideas.
Still, financing is essential. More than 60% of small businesses struggle with cash flow issues.
So, you should know what business financing options are available to you if you need funding. For example, you can bootstrap, leverage small business loans or business lines of credit, apply for business grants, use credit cards, crowdfund, form joint partnerships, or explore alternative types of business financing options available for startups and small businesses.
Now that you understand what to expect, here are five ways to set realistic expectations for your startup or small business:
- Set achievable short to mid-term business goals. Avoid being overwhelmed and don’t aim for perfection. Focus on getting things done one day at a time to achieve a bigger goal.
- Create marketing strategies. It’s best to determine what kind of marketing strategies (traditional vs. online marketing) serve your startup best: social media advertising, public relations, or email marketing, among others. Doing so would help you budget properly and narrow down specific ways to promote your business offline and online.
- Determine a realistic market size. It’s good to be optimistic, but you should keep market expectations to a minimum, especially as a startup. Perform market research to avoid overestimating your potential target market.
- Create personal expectations. Keep yourself in check by setting personal expectations. Personal expectations are motivators to push you as an entrepreneur. And make sure to take actual steps every day to get closer to your personal goals.
- Respect your limitations. You may be capable of great things, but you are only human. Learn to say no to situations that no longer serve your business. Discard projects that aren’t helping your business grow. And always remember to invest in your health.
As the saying goes: “Rome wasn’t built in a day.” This applies to business too. Keeping a realistic mindset, setting short-term achievable goals, and putting in the right amount of work are the building blocks to your small business’s success.
But remember to keep yourself healthy too. Your business won’t work without you.
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