Myths Debunked: 7 Misconceptions About Starting a New Business

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While starting a new business may seem a daunting task, it is certainly not an impossible one. In fact, in 2016 alone, more than 650,000 new companies took the plunge. With so many starting out, the rumour mill is buzzing with ‘facts’ you need to know before setting up a business. However, these are often unfounded. Discover below the 7 fictions you’ve been taking as hard and fast facts:

1. Your Idea = Your Business Plan

Every business starts with that great idea, however this is not enough to substantiate a plan for your company. Look at your idea as the first stepping-stone in the path to success, the foundation upon which you need to build in order to progress. Whilst you don’t need to start with a completely fully-fledged plan, you do need to carefully set out goals in order to establish a timeline for the growth of your business. These will need to be measurable, achievable and scalable in order to maximise your chance of a positive outcome.

2. Success comes from lots of money and/or funding

Often, slow and steady wins the race - a small amount of investment can lead to more stable growth for your business. Take your time and you will reap the (financial) rewards. It doesn’t matter if you don’t have huge VC backing, it can correlate to success yet it is not a prerequisite: in fact, many well known companies started from humble financial beginnings and have risen to great heights with little or no help from VC. This is not to say however, that you should underestimate the importance of managing and tracking your finances thoroughly and regularly.

3. You need to be completely unique

We’ve all heard of the phrase ‘a little healthy competition,’ but in the business world this really does ring true. Don’t give up if someone out there already has the same idea as you, just set out to do it better. Competition can be the driving force to your company’s success.

However, it is important to properly assess your competitors before entering your chosen market. Market research is imperative to thriving amongst the already-existing players and to establish if there is sufficient demand for you to enter as a legitimate opponent.

4. Most businesses fail within their first year

A study by Ormsby Street has shown that survival rates for small businesses are as high as 91% after one year in operation. However, it is after that first year that rates start to drop off, with just over 40% of businesses still trading after five years. The company has launched a business survival calculator which you can use to assess your chances of survival in different industries. If you are looking for a good bet long-term, businesses in the health and education sectors come out on top, and despite having a high chance of failure in the first year, if they make it past that, property companies prove themselves to withstand the test of time. Businesses in the food and accommodation sector however, don’t fare as well in the long-term.

5. The paperwork is really complicated

When setting up a business you will need to register with Companies House and to do so you will need to have all the correct documents in place. GOV.UK has a simple but detailed guide of how to proceed if you want to do this yourself. Alternatively, you could consider registering your business through a formation agent to further decrease the (already very little) hassle. Formation agents also provide services such as guidance on the type of company that best suits your needs and support in setting up a business bank account.

6. You have to be well-connected in order to make it

Knowing people can be a plus, however the existence of those relationships isn’t always enough, it’s how they are cultivated that makes all the difference. Whether you know anyone or not, the key to making and nurturing relationships is tenacity, drive and determination. These are also key characteristics that will contribute to the success of a new business, regardless of having connections or not.

7. It is difficult and expensive to build a website

In days gone past, this used to be the case, but the invention of drag and drop website builders has revolutionised the website design scene. With absolutely no knowledge of code and little or no money, you can now easily design a stylish and functional website for your business. Furthermore, learning how to build a website doesn’t take much time at all, most builders are pretty intuitive and if you run into difficulty they have great support networks available and very handy guides. In terms of costs, many offer free plans with various upgrade options to monthly payment plans depending on your needs.

To Conclude

While these ‘facts’ have proven themselves to be rooted in fiction, setting up a new business shouldn’t be taken lightly. It is a large undertaking that requires commitment and (unfortunately) doesn’t come with any guarantee of success. That being said, it can be a hugely rewarding, fulfilling (and profitable!) endeavour, and one in which I wish you the very best of luck!

 

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