It is not an exaggeration to state that the Internet has leveled the playing field when it comes to businesses. Individuals who would normally not have enough resources are now able to start their own businesses online, and even managed to grow to a point where they can compete with big established brands. There are even turnkey solutions that allow even novice businessmen to hit the ground running. The Internet made it possible to reduce the costs of starting and running a business, while at the same time making it easier and faster to expand one’s reach to the rest of the world.
However, some would-be businessmen tend to struggle and ultimately fail because they believed some frequently passed around myths about online businesses, which either led to demoralization after not seeing any progress, or outright failure when the myths caused them to take missteps while building their online empire. If you want to avoid the same sorry state of affairs, you might want to check out these persistent online business myths and ensure that you don’t fall victim:
You Can Earn a Full-Time Income While Working Part-Time
This is a huge myth that is responsible for many would-be online entrepreneurs giving up. And it is a very dangerous myth that should be discouraged as much as possible. It is the kind of myth that encourages behavior that is counter-productive to running a business.
The truth is that an online business, much like any company, requires hard work and dedication. It is technically true that there are online businesses that only require part time hours, but you will only earn income that is commensurate to the amount of hours you put in. Online businesses are not miracle workers that magically spit out money for little work. It gives you freedom to do as you please, but any money that you want to earn must be earned through hard work and smart decision-making.
Even passive income, which by definition, should mean that you earn money without actively working on it, requires a lot of work to set up. There are no passive income streams that work immediately when you start. If you find one that claims to be, you are probably looking at a scam.
Social Media Makes Selling Online Easy
Social media marketing is a must for businesses these days, by virtue of the fact that it’s where the people are. If you want eyeballs, you’ll find a significant amount of them through social media. This plays into the myth that social media makes selling easy, which is not exactly true and can be a recipe for disappointment and failure.
It is true that social networks provide a way to connect with your target audience, but experienced marketers know that having a means to connect with an audience is not the same as actually connecting with that audience. This myth, that social media allows you to sell directly to people results in many novice entrepreneurs committing that mortal sin of selling: annoying your customers.
These novice entrepreneurs treat social media’s promise of connection to a target audience as carte blanche to bombard people with advertisements and offers. People are on social media to socialize, not to shop. If you try directly selling to them, you get the same treatment door-to-door salesmen usually get, which is either ignored or blocked.
Instead, social media is a way to connect with people and build your brand, as well as to engage with your existing customers either for providing support or for fostering the community. This can lead to a more loyal following and better brand exposure, which in turn could lead to more sales. Using social media to increase sales in this regard takes skill and hard work, so no – social media will not make selling easy. It gives you a new platform and a new approach towards selling, but it does not necessarily provide a lazy approach to running a business.
You Don’t Need Any Money to Start an Online Business
This myth is not an outright lie, but rather a truth that has been stretched to ridiculous levels. It originates from the Internet’s ability to remove many of the startup costs that businesses require, such as the need to rent space for a physical storefront. But reducing costs is not the same as completely removing costs. Even if it’s an online business, there are still startup and running costs.
Online businesses still need storefronts, which can usually come in the form of a website. There are free websites out there, but none of them are worth doing business on (in fact, most of them have policies in place that prevent monetization.) and if you are really serious about building a brand, you need a domain name – which is not something that you can get for free.
You also need a product to sell, an ad copy, and customer support. They can all be done on your own, but that would cost time – and time, as they say, is money. And trying to do everything yourself means your business will take a really long time to take off, as you’ll constantly spread yourself too thin.
Regardless of how many cost-saving measures and free alternatives to take, the bottomline is that if you want an online business that earns a profit, you need to be ready to spend some money. The good news is that the internet greatly lowers the amount you need to spend, so you are going to be fine as long as you are not expecting a free ride.
Everything Can Be Automated
This is another one of those online business myths that are dangerous because it encourages laziness among novice entrepreneurs. It takes advantage of people’s inherent desire to reap benefits without putting in any work or effort. Thus, it is very easy to entice new businessmen to adopt turn-key or push-button approaches to running their business.
It is true that there are tools, platforms, and applications that automate and make it easier to run an online company. WordPress and other content management platforms are built with this in mind, but they only help automate repeatable, redundant tasks. They will not allow you to put the entire business on autopilot – because the really critical parts of running a business cannot be automated. You, as the owner and chief decision-maker, need to take a hands-on approach and manually handle things such as market research, content creation, niche selection, among other things that can be delegated to employees, but not to an automation tool, such as customer support.
There is No Need to Register a Small Business
It is a mistake to think that there is no need to register your business just because it is small. The requirement to register a business basically has no bearing on the size of the business itself. This is one myth that is dangerous because the ramifications can be particularly ruinous. You don’t want to be skirting the edges of the law, as the consequences may be more serious than simply losing money. You could end up facing fines or even jail time, in the worst case scenario.
The silver lining is that registering a business is not exactly rocket science, and that the applicable laws change depending on where you plan to operate. In some states/territories, you are not even required to register the business if it is a sole proprietorship being run under your own legal name. The key here is research – try to do some research on which territory’s law applies in your case, then find out what the letter of the law requires of you.
A Small Business Will Allow Me To Write Off All My Expenses
This is another one of those myths that proliferate because it plays into people’s inherent desire to gain an unfair advantage – this time, over the system. But thinking that starting a business just for the purpose of using it as a way to get some free tax write-offs (by marking many of your expenses as business expenses), you may be in for a rude awakening.
There are many rules that govern business expenses, and they tend to vary between different countries (and even states.) There are many things that cannot qualify as business expenses, and there are also times when even a legitimate business expense are not covered in full, only a part of it can be claimed as a write-off. The bottom line is that you will never be able to claim all of your expenses as a write-off.
It’s Not a Real Business If I Only Sell a Few Items
This myth is an offshoot of the myth about business sizes. There are many would-be entrepreneurs who think that they do not need to register their business, because it is not a “real” business on account of only selling “a few items.” As with the size of business, the amount of items you sell has no bearing on the need to have a business registered. You can sell one or you can sell a million different items, it doesn’t matter as the government still expects you to declare your income and follow all the regulations like any other legitimate business.
There is No Need to Pay Taxes if I Only Sell Online
The prevalence of this myth is puzzling, because it is easy to disprove – if there are no such taxes involved in online selling, then every body would just buy and sell online as that would mean nobody has to pay any taxes. It is such a silly myth that one has to wonder whether people who believe it are just naïve.
In any case, any rules that apply to a business when it comes to taxes will apply to them even if they sell online. This is why many online stores specify which taxes apply when you make a purchase on their store. As for which taxes apply, again – you need to do some research on which ones are in place for the territory or state you plan to operate in.
You Won’t Have Any Boss
This is one of those myths being used to entice individuals into starting an online business, and it inspires in people the mental image of absolute freedom, where no boss will be breathing down your neck, telling you what to do, and forcing you to adhere to a specific schedule. You can work any time you want, as much (or as little as you want), and you will still earn a tidy sum of profit.
This myth is actually a sugarcoating of the truth. The reality is that you don’t have an immediate supervisor or a manager, but you still answer to a couple of bosses – first is the customers. In a traditional work environment, many workers don’t deal directly with the customers and so are protected from their whims and demands. But when you run an online business, those customers are now your bosses. You answer to them, because their money funds your business. If you earn their ire, they will stop supporting your business and your company goes down the drain.
The other boss is yourself. You are your own boss. All of those things that managers do in order to ensure that employees are working properly, you now have to do to yourself. You have to make sure you are actually working and doing things properly, because if you don’t the business goes down the drain.
At the end of the day, all of these myths tend to proliferate because people tend to glorify online businesses as a magical new venture that makes every body’s dreams come true and turns people into billionaires without requiring any effort. The truth? The only difference is the change in platform. You are still running a business. There may be some changes that make things easier or more accessible, but do not ever forget that it still requires patience, smarts, hard work, and all of those things that a businessman needs to become successful.