Five Myths Perpetuated on Social Media About Small-Business

SOCIAL MEDIA IS RIFE WITH SMALL-BUSINESS MYTHS, FOSTERED MOSTLY BY PEOPLE WITHOUT RELEVANT REAL-WORLD EXPERIENCE...

Early to bed, early to rise, makes a man healthy, wealthy, and wise...

Benjamin Franklin in Poor Richard's Almanac

It's often said that small-business is the backbone of the U.S. economy. And with the growth of interest in entrepreneurial activity over the past decade or so,  small-business — which is incorrectly seen as a breeding ground for entrepreneurs — has taken its place in the phalanx of American Mythology.

From the publishing of "Poor Richard's Almanac" by historical icon Ben Franklin, to the ever-growing multitude of contemporary food and beverage, cleaning and maintenance, and sports and recreation franchisees, romantic flirtation with small-business has transformed into virtual obsession. And, as with most religious creeds, the new cult of small-business has created, and supports its own body of faith-based dogma.

Myth #1— Starting a small-business is a great way to deal with being unemployed...

Well ... not necessarily. And, of course, only if you are successful. But will you be?

If you're unemployed, then you aren't running a small-business now. You may have run a small-business in the past, but obviously, you weren't wildly successful at it ... or you'd likely still be doing it, which you're not.

According to the U.S. Small Business Administration, which has likely compiled more information on small-business than just about any other source, starting a small-business generally requires at least a modest initial capital investment, whether for facilities and equipment, or for operating expense during the early start-up phase, when revenues may be low or non-existent.

However, if you've been moving through a period of unemployment, and you're now being driven by a failure to find new employment, you are not likely to be in a position to properly capitalize the start-up of even a very small business. And it might well be wiser to take a job (or two) doing something you might not really want to do, while you pay your living expenses and accumulate a small-business start-up fund.

Myth #2 — You can start a small-business solely on "sweat equity"...

Sweat equity is what you build up by putting work into a small-business start-up without being paid a salary, or anything at all, by the business.

Sometimes it's thought that a small-business can "boot-strap" itself into existence, purely by the investment of sweat equity. Well, sometimes it can. But more often than not, it can't.

Sweat equity is always required in order to minimize cash outflows, until cash inflows reach a level that will support the day-to-day operational direct and indirect overheads in involved in running the business.

You can do sales work for your new small-business without pay, but you cannot pay for telephone and internet service by sweeping floors for the utility company. You can do your own bookkeeping without paying yourself for doing it, but the guy who is going to print your fliers and brochures is not likely to be willing to trade you out for your washing his windows. And there is little doubt that you will have to eat, clothe yourself, maintain transportation, and keep a roof over your head. Yet, most vendors of food, clothing, auto fuel, and housing refuse to take bottles of perspiration in exchange for their wares.

Again, your potential for success in starting and operating a small-business goes up dramatically, if you have accumulated sufficient available capital to finance that business during its early start-up phase.

Myth #3 — Owning and running a small business is a terrific lifestyle alternative to being employed by someone else...

Okay, so the outlook on owning and running your own small-business is not that bleak. But there is some truth in that old saying. Starting and running a small-business from scratch almost inevitably requires a greater input of effort and time than simply working for someone else.

Additionally, when you run your own small-business, you carry all the responsibility — and risk, and associated worry — on your own shoulders. Often to such an extent that you may find little time to relax, may fall into neglecting your family, and may think constantly and obsessively about sales revenues, marketing, finding new customers and clients, keeping the office machinery running, getting the computer software up  and running, making this week's payroll (if you have employees), and any number of other things that will work to keep you up at night.

Owning and operating your own small-business can work out to be great, beyond your wildest dreams. But then again, it also might not. If you don't have drivers other than simply wanting to be out from under the supervision (constriction) of a "boss" — drivers such as wanting to be solely responsible for your own success or failure, wanting to development and implement your own ideas and realize the fulfillment of your own talents, and wanting to work in a field solely of your own choice at something that you ultimately love to do — then you should think more than twice about striking out on your own. For maybe that well-paying, forty-hour-per-week job ain't so bad after all.

Maybe you should let somebody else worry about making payroll. Or worry about where new customers and clients are to be found and wooed. Or about the year end financial statements and paying the company's taxes. Or defending against the unfair employment practices suit, filed by a labor lawyer whose own business suit costs more than the car you're able to afford to drive.

Myth #4 — Running a small-business provides flexibility in your working hours, as well as the freedom to indulge in "social responsibility"...

This is a myth only a Millennial could love ... or believe. True, if you work for someone else, you generally have set hours during which you have to be present at work, and usually on site  — although this is to a degree changing in the workplace with the increased popularity of working online or remotely at least part of the time.

But with a small-business, generally if you're not on deck, nobody is. And that often means you end up more firmly rooted to your work, and less able to "shut it down" than you would be if you were someone else's employee.

It's also true that as an employee you can at times come under pressure from your employer or from managers to whom you report to conform to some idea of "corporate social orthodoxy".  Whatever that means or involves.

But don't kid yourself, as a small-business owner/operator, the pressure of having to not offend your customer or client base is just as strong, if not more so. At least when your business is in its early stages of start-up.

One of the defining characteristics of small-business is that it does business at a much more personal level, and so depends even more heavily on maintaining good public relations. And because the constituency of a small-business is so much smaller and likely more homogenous, as well as more sensitive to personal engagement than that of big-business, it's easier to find yourself in big trouble with significant portions of your customer base, for reasons totally unrelated to the product or service you market and deliver. How that translates into greater freedom to exercise social responsibility is beyond me.

Myth #5 — You can "fake it, until you make it"...

Notwithstanding that this was said in print by celebrity entrepreneur Richard Branson — or at least postulated by a ghost writer whom he employed to effect some of his social media presence — it's not a development strategy of choice for a small-business.

As a small-business person, you will have fewer colleagues backing you up, and far fewer covering up for you. So it is much to "learn on the job."  And your mistakes will be much more obvious to your customer or client base, than they would be if you were employed in a large firm, where you can much of the time hide in the bushes.

No, in a small-business environment, mistakes are not only costly, they are so many times more difficult for your reputation to absorb, that the importance of having adequate training, skill, and experience is greater, not less than it is in the context of big-business.

None of which should discourage you, if you are truly meant to be a small-business person...

Please understand that I am not here trying to discourage you from entering the world of small-business ownership and operation. Indeed, I personally have spent the majority of my adult working life as an independent small-businessman and consultant. And although I haven't gotten rich in the process, I've managed to make a comfortable living. More important, I've always liked doing what I do, and never awakened in the morning feeling the palpable dread of having to go to work that so many in the world of employment unfortunately experience.

No, I am only exhorting you to be realistic about your expectations, and what it will be like. For unfortunately, the nature of social media in our time is that just about anyone can pose as an "expert" on anything, even when he or she doesn't have a lick of relevant real-world experience with the subject or topic. If you unreflectively accept the pronouncements of such people, you are very likely eventually to come up hard against the brick wall of reality. —  Phil Friedman

Author's Notes: If you found this article of value, you may want to take a look at some of my other writing about small business operations, management, and marketing:

"Small Businessman's Primer to Inbound Marketing"

"Selling Bull Chips in a Bag"

"Maximizing Throughput on Fixed Assets and Overheads"

"Small Businesses Need to Keep a Close Eye on Gross Profit"

And if you would like to discuss marketing or other issues you face in your efforts to join the ranks of small-business, email or message me to arrange for a free, no-obligation, 1/2-hour initial consult.

To receive notifications of my writings on a regular basis, click the [FOLLOW] button on my beBee profile. As a writer-friend of mine says, you can always change your mind later.

Feel free to "like" and "share" this post and my other LinkedIn articles — whether on LinkedIn, Twitter, Facebook, or Google+. I ask only that you credit me properly as the author, and include a live link to the original work.

If you are interested in yachts, are allied with the yacht building industry, or operating a small business in another sector, you should consider joining my beBee Hive,

THE PORT ROYAL GROUP for Yacht Builders, Buyers and Owners

where you will find experienced industry professionals discussing a wide range of topics. The ongoing conversation is always interesting, informative, and 100% industry insider.

About me, Phil Friedman: With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.

The (optional to read) pitch: At www.learn2engage.org, we help you improve your reasoning skills and thinking abilities, and as a matter of course, thereby help you improve the quality of your writing. Instruction is handled directly by yours truly, both over the internet and in person, both one-on-one and in small supportive groups.

For more information and to arrange for a free 1/2-hour consult, call or email info@learn2engage.org.

Images: Stuart Miles, FreeDigitalPhotos.com, GoogleImages.com, and Port Royal Group