The world is filled with misleading financial myths. Whether its the fact that working more equates to earning more or that 8/10 startups fail within their first year, it's always important to do your research. Don’t be swayed by old myths because you could be the exception to the rule.
We asked six entrepreneurs what financial myths people should ignore. Take a look at their answers below and get ready to squash those financial myths before they have a chance to influence your startup decision making process:
Company Growth Equals Profit Growth
I always hated when people asked me about my company growth based purely on employees and net revenue. It's easy to get caught up in growing your revenue, but don't lose sight of profit. Many companies actually decrease or even lose profit during the course of growing revenue. Look at your long-term goals, and don't judge the success of yourself or others based purely on revenue and employees.
– Allie Siarto of Photo Field Notes
Working More Means More
I hear all the time that you should be working a lot more. That the more you work, the more you'll get out of your business. That's simply not the case. I find that when you work a ton, you get tired and start not working productively. Work smarter, not harder.
– Peter Daisyme of Hostt
Money Is a Mindset
I have heard salespeople (for software services, etc.) suggest that the readiness to spend money was a ‘mindset' issue; you should stretch yourself when you ‘felt' ready. Dead wrong. If you are struggling to keep your financial footing, adding bills will only cause greater stress and take you away from your mission. Take care of your overhead first, and add services when income stabilizes.
– Nicole Munoz of Start Ranking Now
Go With the Highest Bidder
When trying to get funding for your business, it can be really tempting to take the highest offer, regardless of their term sheets. Everyone tells entrepreneurs to take the money and never look back when in actuality taking a lot more money sets you up sometimes to meet requirements that you could probably never reach. My advice is to rather grow slow than burn out!
– Cody McLain of Support Ninja
You Need a Ton of Money to Start a Business
Today, there are so many tools to build an audience, connect with consumers and generate revenue. Individuals have the power to be publishers, build email lists and monetize their offering quickly. Expert freelancers can help you move fast and lean without the overhead costs of hiring employees. You’ll need funding to scale a business, but not to start one and make progress against an idea.
– Brendon Schrader of Antenna
Closing Your Books Takes Longer Than 15 Days
You should be able to get your books closed by the middle of the month following, at the latest. If not, you don’t have the right process with your team, vendors and customers. Define your close process and stick to it!
– Marjorie Adams of Fourlane
Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. YEC members generate billions of dollars in revenue and have created tens of thousands of jobs.