There are a great number of myths that engulf the start-up space and many entrepreneurs fall for them hook, line and sinker. According to Peter Tuvey, co-founder of Fleximize, the UK’s first revenue-based business lender, debunking these myths is crucial to maintaining success and innovation amongst start-ups.
You can have a sharp website, a solid business plan and of course a great product, but these will amount to little without the correct support systems in place and a firm understanding of what you have let yourself in for.
Here are five myths of entrepreneurship that can lead start-ups astray in their infancy.
Myth 1: You must stick to a perfect business plan
When starting out, there’s no such thing as ‘perfect’ in business. Even the greatest entrepreneurs like Gates and Branson are continually adapting to market conditions and advancements in technology.
Running a start-up is a constant learning process and projecting capital assets, monetary flows, and market conditions
The truth is that you can’t fully predict what path your start-up will take. Entrepreneurs need to be agile and react quickly to new opportunities when they crop up as tying your business down to specific targets could stunt growth. Instead of designing that ‘perfect’ business plan, create one that is nimble and easily adjustable, let it evolve as situations dictate.
Myth 2: Venture capital is the only way to grow
This definitely isn’t the case.
Whilst many well-known businesses have raised funds through venture capitalist (VC) funding, there are many – GitHub and Envato to name but two – that relied heavily on their own funds during their early stages.
Although unquestionably a much harder route to take, self-funding or ‘bootstrapping’ definitely does have its advantages.
Despite taking slightly longer for a company to grow organically without a capital injection, this is offset by the ability to maintain full control over the company and make decisions that will best aid long-term, rather than short-term, returns.
One of the many attractive aspects of starting your own company is the ability to be your own boss, and by self-funding, you do not have to answer to investors or have them constantly checking up on progress and timelines.
If bootstrapping isn’t for you
Myth 3: In getting
This is not always true, thankfully.
If you do decide that funding is the right option, there are now a plethora of alternative ways to get finance and maintain control.
Previously, entrepreneurs would turn to banks for business loans to avoid handing over any part of their business. However, banks are often very sceptical of risky early-stage business opportunities making these difficult to acquire.
Alternative finance providers offer more flexible sources of capital for fast-growing start-ups. Lenders like Fleximize can lend to early-stage businesses that have just 6 months trading and typically make decisions in days, not weeks. Meaning that you can focus on building your business rather than searching for a solution that will sacrifice equity.
Myth 4: Fail fast, fail often
This phrase has become a popular mantra for tech hubs around the globe. Just think for a second
By changing your mindset to “learn lots, learn often, adapt always” you’ll be in a better position to take every opportunity to learn from staff, customers, family, friends and mentors, and to make important adjustments swiftly. Your approach does not need to be trendy, but it does need to be realistic!
Myth 5: ‘Build it and they’ll come’
If only it was that easy.
It might have worked for Kevin Costner et al. in Field of Dreams, but most start-ups will testify that even the most innovative product on the market risks becoming one of the best products never to see the light of day if you don’t have great people to rely on and to make it happen.
Selecting the right talent to help drive your product is crucial, and so building a business where people want to work is vital. The demand for talented people is rife so you need to make your company and philosophy attractive to them. Don’t forget these are the individuals that will be executing your idea and pushing your product out to market, so source good people from the get-go and your business will flourish.
Peter Tuvey is co-Founder of Fleximize. Launched in 2014 as the UK’s first revenue-based finance provider, Fleximize offers small business loans from £500 to over £1