Five Common Small Business Misconceptions
[This article was written by Michael Zhou.]
Too many small business owners fail to take their businesses further because they fall victim to the common misconceptions. If you so much as scroll through social media you’ll be bombarded with images of “success” and “real” business owners. This is the new age of entrepreneurship, and it isn’t always based on fact.
From the way they run their companies to whether they even get started in the first place, these myths are often bad news. It’s important to educate yourself on the realities of business today. You might be surprised at the truth. Here are five common small business misconceptions you might be falling for yourself.
1. You Only Need to Focus on the Product or Service
Starting with a quality product or service is great. But it can’t be your only strategy. A quality product will only get you so far. In fact, sometimes it won’t get you off the ground at all. It’s hard to hear, but there’s much more to business than selling a great product.
Think of how many innovative products exist in the world. There are a lot, in case you were wondering. But how many of those sell? A significantly lower number. Sometimes, marketing and distribution matter more than how great your product is.
For example, only 61% of small businesses invest in social media marketing and an even smaller percentage (17%) invests in SEO. This isn’t great when you consider most online users click on the first few results and stop their search there. The fact of the matter is that your product or service is only a small piece of the overall puzzle.
2. The Customer Is Always Right
How many times have we heard this phrase? If you’re like most Americans, it’s used sometimes like a bragging point. In reality, the customer isn’t always right. If that was the case, more businesses would fail right away.
While it’s important to listen to customers and find positive solutions, that doesn’t mean you can change major things about your business based on customer whims alone. Positive and negative feedback are both parts of running a business. Instead of bending to every customer demand, set clear expectations upfront so you know how to best appease customers no matter the situation.
3. You Don’t Need Health Insurance
There’s an epidemic in this country of only larger corporations choosing to provide insurance for employees. This leaves a large percentage of people without proper health insurance coverage. We all know medical costs are on the rise, yet many small businesses continue to avoid making a change.
Offering insurance as a small business isn’t complicated. Using licensed insurance agents in your area will help with the majority of the process. These agents will navigate the healthcare marketplace, show you how to maximize savings, and decide on the best option that satisfied both you and your employees. In this day and age, you can’t afford to overlook health insurance if you want to retain top talent and keep your team healthy.
4. You Don’t Need to Understand Financial Reports
Many small businesses today lack accounting resources. This doesn’t mean that they don’t have a system for taxes and bookkeeping. It means business owners think it’s normal not to understand their own financial reports.
This makes sense. As a business owner, you’re good at a lot of things. You’re a leader, you’re a salesperson, and you know how to make savvy decisions. You shouldn’t need to understand your facts and figures either, right? Wrong. In a world where 45% of small businesses have no accountant or bookkeeper, you need to take these numbers seriously. You can’t outsource your numbers. Business owners need to review and understand these documents.
5. Money Equals Success
While money is indeed one way to measure success, it’s far from the best way. When businesses, especially small businesses, treat money as the most important factor, they lose sight of what really matters. When customers are only considered as far as their wallets will take them, they start to notice.
If small businesses want to succeed, they need to offer real value. A business with value will always have a strong cash flow. Ask yourself how you’re offering authentic value to your customers, whether it’s through an outstanding product or quality service.
Small Business Myths Busted
Have you fallen for any of the myths above? If you have, you’re not alone. These are pervasive myths that seem to be everywhere you look. Luckily, they’re not based on fact. In this day and age, you can’t afford to believe what everyone tells you.
Small businesses are thriving. Yours can too as long as you’re willing to work hard, offer value, and treat your workers with respect. Let’s shed these myths and move towards a much more honest future.