The small business world can be a bubble. In some ways, that’s a good thing: Entrepreneurs need to bounce ideas off each other and keep team members happy, and there’s no sense in getting too wrapped up in trends among big businesses.
But the bubble has a downside: Many harmful small business myths won’t die because leaders keep hearing them.
When you’re just starting out — or even if you’ve been around the block once or twice — it’s tough not to get caught up in the chaos that’s advice from others. Some of it’s good, but other bits are downright dangerous. Here are a few small business myths you should eliminate from your memory as soon as possible:
1. Myth: You have to spend money to make money.
Yes, services like insurance and loans require you to start out with money, and it’s important to have some cash in the bank. But don’t make the mistake of thinking that you need to spend serious money to get started.
That flashy technology that your enterprise competitor uses? It can wait. The plush office and ping-pong tables? Employees at a new company don’t expect all the bells and whistles. The same is true of everything from business development to marketing.
Truth: Some business models require almost no money to set up. Consulting services, content development firms, virtual assistant companies, and more can be done from anywhere with nothing more than a computer.
Think about where your expertise lies: At least at first, invest only in your core service. Even then, invest only as much as is necessary. If you can get through the lean months as a successful company, you can certainly handle the better ones.
2. Myth: You can’t afford employee benefits.
True, some benefits will be out of your price range as a small business. Benefits like daily lunches or extravagant massages really add up and may be too much for you to tackle when you’re starting out.
Truth: Although some benefits cost significant money, there are plenty of other benefits you can offer to keep you competitive with larger companies.
Take flexible work. It costs literally nothing to let your employees work from home or a coffee shop on occasion rather than the office. Another is a casual dress code: Unless you regularly have clients coming through your door, why make everyone go out and buy a new suit to work for you?
Other benefits cost a little but deliver a lot of value. Many small business 401(k) plans cost just a few dollars per employee per month. Having a competitive 401(k) matching policy, on top of an already stellar benefits package, can be a difference maker in attracting the best talent.
3. Myth: Price is always the most important factor to customers.
When determining where you want your business products or services to fall in your industry, price is undoubtedly a large factor. However, it certainly isn’t the only thing potential customers consider before making a purchase.
Truth: It’s unfair to say that price isn’t a factor at all in a customer’s mind — but it’s important to know that there are other things that can be more important, depending on the customer’s circumstances.
To some customers, brand loyalty matters most. When shoppers are loyal to a certain brand, they don’t even consider buying from another brand because they already know what they want. Companies build brand loyalty through quality products and genuine customer interactions.
Others put the customer experience above all. Customers don’t want business to feel like a slog. Giving the customer an easy way to overcome an obstacle in his or her life is a great way to help him or her overlook the price tag.
4. Myth: The customer is always right.
Probably the most tried-and-true myth on this list is the idea that the customer is always right — but it couldn’t be more wrong. Some customers are legitimately bad for business.
Yes, you want to consider your customers in how you conduct business and how you handle adversity. However, to concede all agency in favor of upholding this myth is a misstep for any business.
Truth: The customer can be right; the business owner can be right, too. The bottom line? Professionalism and owning up to your mistakes will go a lot further — with your team and with customers themselves — than just assuming that the customer played no part in the matter.
5. Myth: High risk will yield high reward.
This myth might be true in the stock market, but it’s not in the market most small businesses operate in. Once in a blue moon, impulsive decisions might work out for the best. But for the most part, they play out exactly as they began: with little rhyme or reason.
Truth: Calculated risks that are made with intention and based on data justifying the risk are the way to go. Just because you get a rush from doing something risky doesn’t make it a good business move.
Separating small business myths from truths can be a real challenge. Remember, though, that figuring out how to run a company is what the adventure is all about. Stick with it, and you’ll only get better at telling fact from fiction.