So what are those myths? Here are five:
Myth 1: Most businesses fail within two years. False. Depending on the source and the time period, the number of businesses that survive to their fifth year hovers around 50%. And that includes counting as failures those business that were sold, closed for personal reasons, and discontinued after accomplishing the desired outcomes.
Myth 2: Entrepreneurs are born, not made. A genetic argument. For some reason, people want to believe that entrepreneurs are individuals born with a gene that makes them entrepreneurs. But why stop there? Let’s find the accountant gene, the dishwasher gene and the office manager gene. We can conduct the tests on all 12-year-olds and then based on the genetic findings, we can guide them to their genetic destiny. Entrepreneurs are made.
Myth 3: Entrepreneurs are risk takers. Yes, they are. Calculated risk takers. They size up an opportunity, evaluate the factors that can lead to failure, identify how to neutralize those factors, and then if that makes sense, launch a business. The risk takers are those preparing themselves to take a job with a corporation.
Myth 4: Large businesses create the jobs in America. False. The Kauffman Foundation, in a recently released study, compared start-ups with existing businesses from 1977-2005. On average, start-ups create 3 million jobs each year. Existing businesses, on average, lose 1 million jobs annually. And more important, the study found that during recessionary years, job creation at start-ups remains stable; while for existing businesses the pattern was downward.
Myth 5: The most productive economic strategy by a community is to attract existing businesses. This is often referred to as the “rob thy neighbor” strategy of economic development. Find a business in another community, bribe them with taxpayer dollars to move to your community, and as a result they will bring jobs and wealth to your community. Never mind the fact that it destroys many lives in the other community. If you are looking for an example of success using this strategy, look no further than Mississippi. They originated the “rob they neighbor” strategy back in the 1930s.
If we are to change the product, we as a community need to embrace a culture of entrepreneurship. And the very first step is through educating our youth.
No student in our community should graduate from high school without a course in entrepreneurship. We need to realign our government and community institutions so entrepreneurship becomes a priority, not a desire. And we need to make sure that our precious tax dollars dedicated to economic development are directly invested into programs that assist individuals who can launch a business with great success.
We cannot afford another decade of economic decision making based on myths. We need to make a change and make it now.
The Thought Provoking, Irreverent Pearl Necklace Grandmother of the 21st C. Paradigm Shifter, Poet, Storyteller, Marketer, Visionary, Blogger, Coach. Mrs. Fire
“50/50 The Magic of the Middle Line”, Experience Coaching”
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