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Five Of The Most Common Grandfathered Myths About Doing Business

Five Of The Most Common Grandfathered Myths About Doing Business

There are a lot of misconceptions and myths about ways of doing business. Infact you will come across various advices and outright lies about what it takes to be successful in business.  Most of these myths might have been created and spread by people who have never gone into business for themselves or by the people who went into business, failed at their business. There is nothing wrong if we call these myths as the grandfathered business myths.

However if we analyze closely, these advices have become myths over time with the introduction of new technology like internet and social networking  which has changed the way of doing business.  Regardless of where you heard them, you will for sure be familiar with some of the following myths.

Let me share with you Five of the most common grandfathered myths about doing business.

Myth # 1: You can do complex/enterprise sales only through face to face interaction

Fact: If you stick to the “Old Way” of communicating your business might decline over time and eventually fail. That is a reality you will have to deal with. There are things like blogging, Social Media, Mobile Apps, Digital Video, Twitter, Social Capital and e-Newsletter all of which have proven as a boon for the business. The assumption that you have to be face-to-face in order to get the deal does not take into account the buyer’s preference.  The old-school thought about field sales vs. inside sales is transforming and sales people are learning to adopt both in-person and phone skills to build relationships and close deals.

We can recreate the environment of intimacy with various sales tools that do not require face-to-face interaction. Understanding how to ask the right questions to uncover prospect or buyer’s needs and pain points is not a skill that requires in-person communication.

Myth # 2: There is no need of a marketing plan. The product/service will sell itself

Fact: Even if you think your product is complete and is the best in the market, but if you don’t have a marketing plan or budget, you have equal chances of failure.  You must do adequate planning and set aside budget for marketing. Marketing is an investment in your business and if you have done it right, it pays itself back.

Myth#3You can pay yourself whatever you want

Fact: You have to think wisely here. If you take all the money coming in or a larger portion of it you will not have left anything to pay for your business expenses? Many new business owners may not truly understand just how much they need to plow back into their company for marketing, operations and other expenses in order to sustain their business. “Cash flow is critical for any business and business owners should be prepared not to take any money out of their business for the initial years.

Myth # 4: Profit is all that matters in business

Fact: It’s not incorrect that profit is a very important element but Cash Flows are equally or may be more important.  Profits rarely come quickly or easily, and business success may be measured in other terms such as doing what you want or meeting you business need. Many business owners tend to overlook their cash flows.  Profit can just be a trick of accounting whereas cash flow controls whether you can stay in business or not.  Many companies go out of business due to cash flow challenges, even though they are profitable on paper.  Your creditors are not interested in how profitable your accounting statements say you are if you don’t have the cash to pay them back.

Myth # 5: To be successful in a business, you have to be cheaper

Fact: If that is true there would have been no market for products like Mercedes, and Ferrari.  None of them are the price leader (cheapest) yet all are successful pieces of the market.  If you intend to become competitive by selling cheap, then you should not bother starting your business.  Any dominant company can start a price war and likely wipe you out.

To conclude:  Many business owners still believe a lot of these old myths about how to run their business. These are the things they assume to be true, but when put into practice, they don’t really work. While myths may have some grain of truth, the fact that the business owner needs to realize is that the reality of owning and operating a business differs significantly and substantially.

There’s been a major paradigm shift in business practices; thanks to the internet which have made things so easy and unimaginable. These grandfathered myths no longer holds true for getting ahead today and are more dangerous and less viable in the current global environment of intense competition.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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Alok Patnia founded Taxmantra.com, an expert in tax advisory & compliance. He is a Chartered Accountant having prior exposure with Ernst & Young & KPMG.

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