BizAims

There are a lot of misconceptions, myths, bad advice and outright lies about what it takes to be successful in business.  And most of those are continually spread by people who have never gone into business for themselves. Here are 5 of the most common myths about doing business.

      1.      To be successful you have to be first.  This is also sometimes reworded as “the first in, wins”.  While there are some cases where there is such thing as “first mover advantage” it does not guarantee success.  Remember the leading edge is also known as the bleeding edge.  If you had to be first, then explain to me the success of Dell and Microsoft.  Dell was not first in the PC market.  Microsoft was not first with the GUI or the word processor or the spreadsheet, yet it dominates in all those areas.

2.      To be successful, you have to be cheaper.  Oh really?  Please explain to me the success of Nordstrom, Mercedes, and Ferrari.  None of them are the price leader (cheapest) yet all have successful pieces of the market.  Take an SBA (Small Business Administration) course and they will tell you that if your only competetive point is to be cheaper, don't bother starting your business.  Any dominant company can start a price war and likely wipe you out.  One notable exception to this is Southwest Airlines where they survived price wars because they also had an advantage in lower costs of doing business.  And they are known for friendly service, not just low prices.

3.      I'm a good cook so I should start a restaurant.  This is one of the most abused myths.  It is often brought on or exacerbated by well-meaning friends and family who say things like, “Hey, this meal is fantastic!  You should start a restaurant!”  There is more to running a restaurant than having a good recipe and being able to cook well.  You will also be involved in buying, budgeting, payroll, managing employees, and taxes, just to name a few.  Do you enjoy cooking or do you enjoy running a business?  Maybe you'd make a great chef in someone else's business.  Or maybe you should get a partner to help with the rest of the business.  Or maybe you'll learn everything you need to do.  Whatever it is, rest assured there's more to the restaurant business than just cooking.  This of course is true of every business.  There is more to running an independent programming firm than just writing software.

4.      The customer is always right.  No.  No they're not.  And sometimes you have to tell them so.  In fact, sometimes they are so wrong that you will actually have to tell them you don't want them as a customer any more.  It's a tough thing to do if you only have a couple of customers, but sometimes they cost you more money than you make from them.

5.      I'll just open my store and people will stream in off the sidewalks and buy from me.  This is also known as the “If you build it, they will come” approach to business.  HA!  You will more likely be out on the sidewalk begging people to come into your store just to look around.  Consider advertising.  Word-of-mouth is the best because it is the most effective and the cheapest.  If you can get personal referrals from friends and family, great!  If you can get free publicity, awesome!  One of the reasons that Amazon.com does as much business as they do is that they have a loud-mouth CEO who went around for several years telling every reporter or anyone who would listen that Amazon is “the world's largest book store”.  It got them business.  Now they need to work on that profitability thing.