Have you ever considered entrepreneurship? In the past, the possibility to create success by being a business owner was limited to a select few, but things are different. It’s 2022! Times have changed, and there is now more opportunity than ever to own a small business. Getting started might not be as difficult as you think either, but there are a few assumptions that can stop some people from taking the first step. Today, we’re here to bust those!
Small Business Myth #1: Success Happens Overnight
The biggest reason new entrepreneurs get defeated is because they expect to see success right away. Unfortunately, its very rare to see results overnight, and will usually take some leg work to get an idea or product off the ground. In fact, most people who claim to have been an “overnight success” have actually put years into preliminary groundwork and now get to see the results of their labor. While it’s easy to expect instant profits given the fast-paced world we live in where people hand out “likes” on social media like candy on Halloween, it’s not always that simple. It may be cliché, but remember the saying, “Rome was not built in a day”. Building a business takes time.
Small Business Myth #2: Lack of Capital Leads to Failure to Launch
Some people believe if you don’t have enough personal seed money, you won’t be able to get started, but that’s not true! There are plenty of places that will give start-up loans to new new businesses and small businesses. If for some reason a bank loan isn’t possible, there are other finance options. Self-Directed IRAs can be a great option for those seeking out funds.
With Self-Directed IRAs, the borrower and lender can determine all the loan terms between themselves. Since the IRA is technically the lender, the borrower would pay back the SDIRA, not the account holder. These types of deals can be great for passive investors.
Small Business Myth #3: Failure is Not an Option
Many new entrepreneurs can easily get frustrated when they don’t succeed. We’ve already established that it’s not common to see instant success, but just because you don’t succeed the first time doesn’t mean you should give up. The best thing you can do when you don’t hit your goal is to try and try again. Learning from your mistakes is one the best ways to grow and overcome, especially when starting a new business.
In the section above, we mentioned it’s possible to get startup money from SDIRA lenders. In the event of a mistake with a loan you received from a private investor, it’s extremely important to do the right thing. Always do whatever you can to pay your investors back, even if it means you take a hit in the short term. Not only will your lender respect you for being honest, but it can also help your reputation. If word gets out that you took investor money but never paid them back, no one will want to lend to you in the future. But, even if you fail your first time and are still able to make it up to your lender, people will see your character and want to help out. This is just one example; you’ll find that the more you fail, the more you learn! Don’t get discouraged!
Small Business Myth #4: You Need to do Everything Yourself
When you’re starting out, you may get overwhelmed if you try to do everything by yourself. Never underestimate the power of a team. Every good entrepreneur has a power team in their back pocket, because they understand that different people can serve different functions. There may be someone that can handle a task better than you and asking for help doesn’t mean you’re not capable of something. Utilize the people around you so you can work smarter, not harder. And, as always, Quest certified IRA Specialists are always available to help discuss scenarios and provide education.
Small Business Myth #5: You Should Wait for the Right Time
One of the most common lines I hear people say is, “Man, I just wish I had started sooner.” This is because so many people wait until the “right time” to start their small business, but the truth is there will never be a “right time” to start working toward your goal but just like with an IRA, the sooner you start, the closer you’ll get to reaching it. I’ve heard people say that they are too young, they don’t have the money, or that there’s simply too much going on to even think about starting a business, so they wait. They wait for the so called “perfect time”, but what they discover is they waste valuable time that could have been used building their business. Entrepreneurship is possible for anyone, no matter who you are.
Self-Directed IRAs are a great tool for entrepreneurs looking to kick start their small business or take their current one to the next level. With a good understanding of how these accounts work and some of the myths surrounding entrepreneurship, you can avoid some common mistakes others have made and use some resources you might not have known you have available to you. If you would like more information about SDIRAs or how they can help your small business, call us at 855-FUN-IRAs (855-386-4727) to schedule a free consultation with an IRA Specialist.