Eight Fallacies of Entrepreneurship

Source: The New York Times
Date: 03/23/2011
Author: Jay Goltz

People start businesses for all kinds of reasons. Other people don’t start businesses for all kinds of reasons. Sometimes they are the very same reasons. I have compiled a list of frequently used phrases and comments that I often hear when people are discussing this decision and that I think reflect serious misunderstandings. At best, these misunderstandings can lead to a waste of time. At worst, they can lead to very bad decisions and very big losses. Here are my top eight:

1. Any new business has a 50-50 shot at succeeding. Yes, according to the Small Business Administration, the failure rate of new businesses is around 50 percent after five years. That statistic ought to be scary enough, but the odds of your business succeeding may not even be that good. Some ill-conceived ventures have no chance of succeeding, and others may have a 75 percent success rate. It is not the flip of a coin. It is about execution and the need in the market place. With new ideas, it is obviously harder to predict. What do you think the failure rate is for opening a McDonald’s restaurant?

Read the other 7 Fallacies >


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