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12 myths about starting your own small business

Nov 17, 2010

Many people decide to start their own business because they think it is a great alternative to having to work for someone else. Some even think it is the next step in the evolution for one to go from rags to riches. However, some people think that engaging in such is a piece of pie. There are many myths that exist, deceiving people into starting their business with unreasonable expectations.

The result? Closed businesses and frustrated entrepreneurs.

Before you jump into small business entrepreneurship, consider first the following myths.

1. Starting a Small Business is Easier Work

This isn't true. You'll probably work harder. A small business needs more work to survive. However, the potential to earn is more. The difference is, at work you would baulk at overtime. With your small business, you may actually enjoy working overtime because you are caring for your own business.

2. I'll be the boss.

You may be the boss of your company. But you will still have to please someone else: the client. So in truth, they are the boss. Make sure you keep them happy and well served.

3. I Can Now Ratchet Up My Asking Price

We often think that we work too much and are paid too little. When starting a small business we may be tempted to think that we can now push for a price more befitting our skills. However, we should remember that we have competition who might be offering their services for a pretty low amount. We always have to be competitive and practical. And exorbitant pricing may not help our small business any much.

4. I Don't Have to Deal with People I Don’t Like Anymore!

Unfortunately, no. You might find that the clients you now have may be pushier than your boss. And as we said in number 1, your clients are your boss. The goal here is for you to have more and more clients. So from here does it follow that the more the clients, the more the bosses, the more the headaches?

5. I Own My Time!

Yes, you do own your time. Unfortunately you will find yourself using more and more of this time to tend to your business. So ultimately, no, you won’t gain much in the time department.

6. I can't work any harder. I can't do all this.

Do you know that they most managers give more jobs to busy employees because they seem to know how to balance and allocate their time? The key to working more is to work smarter, not harder. This will take a lot of organization, but being able to accomplish much in less time will prove to be its own reward.

7. Freedom at Last!

Free from what? And free to do what. Yes, you will have more leeway to do things when you want to. But this does not mean that you will be free to do nothing. Or be free to do something else than tend to your business when you have to.

8. I'm in Charge. There’ll be No Mismanagement from Me.

You may think that your boss was foolish not to listen to your suggestions regarding work. But unless you are on the hot seat, you will not appreciate how hard management really is.

9. If I'm good, I'll be a success immediately.

The unfortunate reality of life is that sometimes, talent and hard work are not rewarded. However, if one is patient with his or her small business, the chance that that business will turn out to be a success increases. So always be practical in your expectations of success. Don’t count your chicks when the eggs haven't hatched yet.

10. I Can Motivate Myself

No man is an island, remember? In any business, your first line of security is your friends and family members. They will help you assess yourself and should be ready with a kind word or two to motivate you to start your own business. But aside from them you should be driven yourself. Without this drive you might not find the fortitude needed to weather the trials that beset starting businesses.

11. When you buy an accounting package you become an instant accountant

"I have MYOB/Quicken/XYZ software so my books will be 100% correct". Yes we have heard it all before. Unfortunately alot of business owners don't realise that accountants spend years studying the ins and outs of accounting and this is something that cannot be acquired with the purchase of some software off a shelf & downloaded onto your computer. By all means, use accounting software to assist your professional accountant so that we can spend more quality time providing proactive solutions to your business.

12. I will set-up the business first before contacting my solicitor and accountant

We have found that it is quite beneficial for tax, estate planning and asset protection purposes, that it is best to talk to your solicitor or accountant before establishing a business as it can prevent potential problems down the track.

We all know people who have succeeded in their own business, but what did it take? Ask them about the sacrifices they have made.

Tags: Small BusinessStarting a Business

Author: Mr Taxman

Comments

"Hi I purchased a new van for our business. The van price before on road was $29995 so I'd be entilted to the gst off that purchase. So can you help me. Do you get that amount no matter what or do you get it only if your eligible for a return on your bas statements, I'm confused as I just lodged my bas and owe $208 however I would have thought with a purchase as big as this plus other purchases I'd be eligible for the return? Can you give me advice on how that works Thanks "

By: Jane on Oct 15, 2012 10:24PM

"If you are registered for GST & you make a purchase for your business then you are entitled to claim the GST on the purchase in your quarterly BAS. So if you use the van 100% for business purposes your GST bill would have reduced by 1/11th of the purchase price (ie $2,726). If your income collected for the quarter is greater than the expenses then you have to pay some amount of GST. Note that your BAS also includes PAYG instalments for 2012/13 tax and any PAYG Withholding on employees wages."

By: Mr Taxman on Oct 18, 2012 8:42PM

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