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6 Common Myths About Starting a Small Business

Small businesses are the driving force behind our country’s commercial infrastructure. According to the U.S. Small Business Administration (SBA), there are currently over 30.2 million small businesses. Based on this figure, small businesses account for over 99% of all businesses in the United States. If you’re thinking about starting a small business, though, you shouldn’t believe the following myths.

6 Common Myths About Starting a Small Business

#1) You Need Good Credit to Secure Financing

While good credit can certainly help you secure financing, there are ways to finance new small businesses with bad credit or no credit. You can use collateral, for example, to increase your chances of getting approved for a secured loan. Alternatively, you can offer a personal guarantee when applying for a small business loan.

#2) All Small Businesses Will Succeed

Unfortunately, not all small businesses will succeed. According to the Bureau of Labor Statistics (BLS), roughly one in five small businesses fail during their first year. By the fifth year, nearly one in two small businesses fail.

#3) Sole Proprietorship Is the Best Business Structure

Many small business owners assume that a sole proprietorship is the best structure for their business. While it’s certainly the easiest to create and use, it doesn’t offer any level of protection for your personal assets from business-related liabilities. In other words, if you structure your small business as a sole proprietorship and someone sues your small business, they could be entitled to your personal savings and other personal assets.

#4) You Must Hire Employees

Contrary to what some entrepreneurs believe, you don’t have to hire employees for your small business. Statistics show, in fact, that most small businesses consist of a single owned without any employees. You can always hire employees when the need arises, but don’t assume that you must start your small business with a large workforce of employees.

#5) Competition Is Bad

Too much competition can certainly restrict your small business’s ability to grow, but competition itself isn’t necessarily bad. In many cases, it’s actually beneficial. Competition shows that there’s a strong demand for a product or service. At the same time, it encourages all businesses in that niche or industry to evolve and adapt.

#6) You’ll Have to Work All Day and Night

It’s a common misconception that small business owners must work all day and night. There are plenty of entrepreneurs and small business owners who work 50 or more hours per week. On the other hand, however, some work less than 40 hours a week.

This article was brought to you by Intrepid Private Capital Group – A Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our website.

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Intrepid Private Capital Group • September 6, 2019

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