Have you ever heard of a child that was afraid to set up a lemonade stand because she might not sell enough lemonade? Me neither.
But as adults, probably the number one reason that men and women don’t start businesses and become entrepreneurs is fear.
“…for most people, entrepreneurship ends in childhood. Why? Because as we get older, it
gets riskier.” Ara Bagdasarian and Nick Gustavsson write in The Lemonade Stand: What Every Entrepreneur Should Know to Succeed in Starting and Running Any Business.
For a child, setting up a lemonade stand is fun! We enjoy the possibility of making some extra money, offering something refreshing to people on a hot day, and engaging with people when they stop by. It is an adventure with untold possibilities. I believe that entrepreneurship for an adult is even more exciting, and the fear most people have of it is largely due to misconceptions.
Here are some common misconceptions related to starting your own business along with my thoughts on how to correct them:
1. I have to take out a second mortgage on my home, or find millions in venture capital
CORRECTION: “Entrepreneurship” should be seen as a synonym for “problem solving”. If you see a problem that has not been solved, that is a potential opportunity for you to step in and solve it. And now with things like 3-D printing, the days of spending $30,000 to create a prototype are largely gone.
I am currently working on “solving a problem” and have a local 18 year old who knows CAD, owns a 3-D printer and is charging me $15 an hour to create my prototype! Once I have my prototype, I will take that to the company I want to distribute it and I will sell the item from the prototype, then have it produced. The whole process will cost me next to nothing.
2. I have to quit my day job, and then what happens if my idea doesn’t work?!
CORRECTION: There’s a reason “Don’t quit your day job.” is so common that it has become a saying. That’s because it’s very clear that it’s a dumb idea! Almost all ideas can be worked on late in the evening, early in the morning and on the weekends. As your idea gains momentum and starts producing revenue, maybe you can negotiate one day off a week from your normal job.
Once it consistently generates the same amount of income as you get from your “day job”, feel free to quit! But don’t do it too soon. Many jump ship prematurely, and endure hardships unnecessarily. It is much better to build a business gradually in your spare time and never risk your family’s financial future, than to put yourself in a position where if it doesn’t pan out quickly you’re ruined.
3. I can’t possibly compete with WalMart!
CORRECTION: You’re right! You would have a very hard time assembling that many people in one place who know basically nothing about what they are doing.
WalMart sells lots of basic stuff at a low price. You’re not going to do that. You’re going to solve a problem that has not yet been solved. The second you do that (and do that exceptionally well) you have differentiated yourself from EVERY business out there. If you don’t stop there, but keep iterating (creating newer, better versions of your product or service) even if someone does try to compete with you, they won’t be able to keep up.
There are risks associated with starting your own business. But if you’re wise about it, those risks can be minimized. Setting up a lemonade stand as a child was a blast, and opening a business and solving problems as an adult is even more fun. You are no longer just quenching someone’s thirst, you are making people’s lives better! Now get out there and solve some problems!
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