Building a successful startup can be daunting and confusing. There are quite a few misconceptions surrounding startups and founders. Below, we debunk 6 common startup myths.
1) All it takes is a good idea
One myth we see often is the idea that a great idea will be enough to get your startup off the ground. This is wrong.
A great idea without great strategy will inevitably lead to failure. Having a solid business plan can help you identity your target market (ie perform the right market research), identify your competition strengths and weaknesses, forecast your financials, and more. A good idea is just a starting point.
2) You do not need a business plan
There has been data to suggest that unless an entrepreneur needs to raise substantial capital from investors or get a bank loan, there isn’t a compelling reason to write a detailed business plan. Our take: unless you are a brand new startup (in which case you may want to start off with an action list), a business plan will provide a more comprehensive document that outlines the strategy, objectives and the necessary steps to move the business forward. It also provides a cohesive language that you can share with your co-founders, employees, and board as your startup begins to gain traction and grow.
While we find that many articles may state that you do not need a business plan, the reality is that many startups would have already completed most sections of the business plan. For instance, many founders would have already identified scope, conducted thorough market research, estimated their financials, and created an action plan. The business plan acts as the one document to keep and update all this information.
For other references, check out our previous article on the importance of business plans and the most common mistakes of a business plan.
P.S. If you are a startup that is looking to develop a business plan or strategic plan, reach out! iota consultants has a great team of strategy consultants that can help you with your needs.
3) Your plan has to be perfect
You can spend months tweaking your business or strategic plan trying to make it perfect. While putting together a good business or strategic plan should be a priority, agonizing over the minute details can often be time-wasting. Besides, things inevitably change - the business plan should be updated regularly as it needs to reflect the current situation and be relevant within the current business landscape! At iota, we always say a business plan is never done.
3) Founders need to work 24/7
In this day and age, people tend to glamorize ‘the hustle” to the point that many entrepreneurs experience burnout. Don’t get us wrong, we are not saying starting a business is easy. Startups are demanding, but founders and their employees do not need to work gruelling hours. Working 24/7 will lead to burnout, and subsequently affect engagement, motivation, and productivity.
Up to 72% of Americans think work life balance is a very important factor when choosing a job.
Moreover, a good work-life balance is highly sought out by employees. Having your employees working long hours or expecting them to answer emails during their time off can result in increased turnover or hamper your ability to find great talent. One study estimated that employers that provide better work-life balance have a 25% lower employee turnover!
4) Founders are their own boss
One of the common misperceptions of entrepreneurs is that founders only answer to themselves. This is partly true depending on your perspective. Yes, founders will often set their own schedule and control the amount of work, but they have to answer to their stakeholders - customers, investors, their board (if they applicable).
Moreover, we want to highlight that ‘being your own boss’ sounds appealing; but founders do so much more than answering to themselves. They have to run their business, manage their employees, develop products and services. Often, startup founders are often involved in sales, marketing, operations, and administrative tasks. Beware of the glamorization of the lives of founders - it is misleading!
5) You need a huge budget
You don’t need millions of dollars to start your own business. In fact, many entrepreneurs bootstrap to get their idea off the ground. Using your own personal network can be the easiest way to startup a business. Moreover, grant funding and small business loans may also be applicable to your business.
Feel free to check out previous article on types of investors for more details.
6) Branding is just about the visuals
Branding goes way beyond your logo and colours. You want to give your brand a more human side - something that employees and customers can relate to. Hence, your brand consists of your company’s vision & mission, company values, company culture, how you communicate to employees and customers, and yes, even your visual identity.
89% of shoppers stay loyal to brands that share their values.
We recommend that startups start by establishing their vision and mission statements, defining their company values, and creating the visual aspects. For more resources, check out this article about defining your brand.
Heard any other startup myths? Let us know!