7 Common Misconceptions About Business

How to set up and structure a business isn’t the only myth circulating about business. Here are a few more misconceptions based on common sense yet not true:

Myth 1: Your business serves you.

Most small-business owners go into business for the lifestyle. They want to work less, have flexible schedules, make more money, etc. The truth is that if you want to create this type of lifestyle, or even create an asset you can sell or pass on to your children, you must expand the business beyond a one-person shop. Doing this takes hard work.

Raising a child. As an infant, your business needs a lot of care and guidance from you. You’ll likely put in long hours marketing and selling your products and services, serving your customers, generating income, managing expenses, finding people to hire, and dealing with bookkeeping, legal issues, and taxes.

Like a child, as your business grows, it will require less effort on your part. You’ll have put in place people to tend to the daily operations, systems to automate common practices, and marketing that you’ve tested to generate measurable results. The bigger the business becomes, the easier it will be for you to step out of the day-to-day grind and take on a management role. Usually, at this stage, you’re able to achieve some of your lifestyle goals (you can take vacations, you’re making good money even when you aren’t working, etc.) - but the business now no longer serves you. It’s beyond you and has taken on a life and purpose of its own - and now it has become a sellable asset.

Myth 2: Selling means convincing customers to buy what you offer.

Pick up most sales books and you’ll find techniques for how to get people to buy what you are selling. Often, they use high pressure sales tactics that focus on you making money at the customer’s expense.

Instead of creating win-lose situations with customers, start with them. Ask your prospects and customers what their biggest problems, concerns and fears are - and then create a product or service that solves or alleviates those issues.

Myth 3: Your marketing materials must tell prospects who you are, what you do and what you’ve accomplished.

Most marketing materials focus on the company. They describe the company history, what products and services are offered, the company founders and staff, and awards won - details that aren’t remotely interesting your prospects and only serve to boost the ego of the business owner. These types of marketing materials are a waste of money and do nothing to sell your services.

Instead, the best marketing materials are written by putting yourself in your prospect’s shoes and asking: “If I was this person, what, specifically, would I be going through? Where would my biggest problem or pain lie? What would I be feeling?” The marketing piece would then be written to that person, describing in detail the problems he faces, the frustrations he feels, and finally, how to solve or alleviate those problems.

The truth is, your prospects don’t know or care about you. They are much more interested in their own problems and concerns and don’t have time to figure out if and how you can help them. When your marketing talks of specific problems they have and offers them a way to take steps immediately to relieve that pain, then you have their attention because you’ve demonstrated you understand what they’re going through.

Myth 4: You should focus on short-term results.

It’s human nature to want something as quickly, cheaply and easily as possible. We don’t like to delay gratification when we can have things now, so when we make a few sales or take on a few big clients, we’ve already spent the money in our heads.

Small businesses aren’t alone in this type of thinking. Wall Street is obsessed with quarterly reports. If large companies aren’t showing growth quarter after quarter, investors dump their stocks for more-lucrative investments.

The problem with short-term thinking is that it’s not always in line with your long-term goals. For instance, you may decide to take on a new client’s big project because of the short-term cash influx without weighing the amount of resources and work required to complete the project against other potential (and more lucrative) projects in the future.

Myth 5: You should pursue every opportunity that comes your way.

Trying to take advantage of every opportunity that comes your way is a recipe for failure. The more projects you get involved with, the less resources you have to devote to each - which often means you end up with lots of half-done projects and no results to show for any of them.

Creating goals and a business strategy for your company requires that you determine upfront what types of opportunities you’ll pursue and turn down any opportunities that aren’t a good fit - despite whether they’ll be good in the short term.

Myth 6: Go with your gut.

Small-business owners are notorious for hiring people they “like” or pursuing opportunities because they have a “good feeling” about them. Often, these gut decisions lead to taking on more risk than your company needs to.

When hiring new people, make sure to check out references and do a thorough background check. Hire them on a short-term basis with the potential for long-term work and start them out with smaller projects to evaluate their working style and results.

When making decisions about which opportunities to pursue, find ways to test different options and make your decisions based on testing and data rather than your gut instinct or making an impulse purchase.

Myth 7: Do what everyone else is doing.

There’s a common perception that if other businesses like yours are doing something, you should be doing that, too. This is extremely common with advertising and marketing as companies feel if their competitors have a cool new feature on their web site, are sending out postcards, or are advertising in certain publications, they should be too because their competitors must know what they are doing.

Unfortunately, doing what every other company out there is doing is often like the blind leading the blind. Few companies base their marketing materials on their prospects’ needs (Myth 3) and even fewer companies test whether their marketing and advertising brings in consistent results. You’d most likely be more successful taking what everyone else is doing and doing the opposite.

As you can see, business often isn’t just common sense. To be successful, you must create long-term goals and make decisions based on those goals. You must pick projects and opportunities that are aligned with those goals, turn down projects and opportunities that aren’t aligned with long term goals, and focus your time and resources on high-priority tasks that will move you closer to achieving your goals.

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