Human Resources & Management Kamran on 04 Nov 2007 04:45 pm
Business Mantras Revisited
A column I’ve read recently on “business myths” got me thinking about the veracity of some of the most cherished business principles:
1) “You need to take a risk to become an entrepreneur.”
This is certainly true. But given the fact that almost 60% of new businesses close their doors within the first 3 years, it’s clear that just taking a risk is not enough to succeed in business life.
(”In a study in Columbus, Ohio, Professor H.G. Parsa of Ohio State University, tracked new restaurants from 1996-1999. In the first year, 26% closed. Another 19% closed the second year, and 14% the third. Collectively, 59% of new restaurants closed [within] those three years.” USA Today)
Perhaps one should change that to read “you need to take serial risks until you succeed.”
2) “You have to have a killer business plan.”
Sure, it wouldn’t hurt to have a “killer” of a business plan. But let’s face it: are we all offering “category killer” goods or services? How many times we have seen another sandwich shop opening right next to the four others already there?
When last week I offered to a client of mine to submit a 3- or 5-year plan to his banker, he shot back saying in his fast-changing market segment you’re lucky if you can put together even a ONE year plan; the conditions are changing that fast and the variables in his line of business are that hard to control.
3) “You need to have a strong USP – Unique Selling Proposition – to differentiate yourself from the herd and succeed.”
This is true of course. But sometimes this principle is confused with building a “brand,” which more often than not means at least a “national brand.”
The last time I checked, it takes anywhere from $10 to $100 millions dollars to build a nation-wide “recognition” for any new brand.
If that’s what it took to build a successful business, there would not be 24 million plus small businesses in America today. Obviously you can survive and do reasonably well even if your USP is not at the level of a “brand.”
4) “Entrepreneurs are born.”
Really? Does this mean “people cannot change”? How come Joshua Bell can learn to play the violin but Jane Smith cannot learn how to run a music store?
If you only follow the seminars held every month by cpSphere and make yourself available to the important lessons shared during those seminars you’d be far ahead than an entrepreneur who was “born” that way but never educated himself in the science and craft of entrepreneurship.