Chapter 4: Some Myths about Starting A Business

Many new students often share these apprehensions about starting their own business or becoming an entrepreneur. They rather prefer to become an employee of an already existing business, preferably a large famous corporation. I would rather call these apprehensions as myths, as I have read, and seen myself in numerous business start-up experiences, here they are:

Myth 1: Lots of Capital is Required

It is possible to start a business without or limited capital particularly if it’s a service-related business. You might some to invest later on but not to initiate, or there are some ideas where capital investment is mandatory, but let us avoid such ideas if you are new in the game, as if you are not you probably do not need this book. More important than capital, and more important the business idea itself, you rather need connections with people who have capital or goods which you may need to sell to some potential customer., and of course, you need market knowledge, technical skills to understand the product, and necessary experience of dealing in the market you intend to launch a product. But most importantly, you should ask: do I know the right kind of people who can facilitate me in the process of launching my business. Look around, is there anyone in your family, friends, etc., who can provide you raw material, space to sell or any other service on credit, or if there is a potential customer in your friends or family, who can pay you advance to buy something they need?

If yes then you are through! You have started a business without investing a rupee of your own. Now this means you need to have lots of friends or a big social circle, as more people you know (who also trust you, of course), the more you have the chance of finding a supplier or a customer who can cooperate with you in such a fashion.

So more important than capital are your contacts, as entrepreneurship is simply a game of systemically, sustainably connecting people who would benefit from their engagement with your start-up either financially or by experiencing the benefit of the product or service you are offering. Now once you have started the cycle of rolling cash, you can gradually reinvest your profits, and expand your customer base... Remember your experience with your previous customer, and their testimonial is your biggest selling point. More on this later on.

Myth 2: Need some Job experience to start a business

Doing a job in a specific business function in an established business, and starting a business scratch are two different things altogether. Read See Michael Garber's 'E-Myth Revisited' for details. When you do a job, you learn part of a process that is required to turn the wheel of a business organization, not the whole of it. So often your technical expertise in a specific business function only makes you believe that you can sell the same expertise into the market, or use it to start the same business, which is rather a composite of lots of processes, and a variety of expertise.

Also according to Steve Blank, a start-up is not necessarily a miniature of a large corporation, often start-ups are established, and operated in a very different (chaotic) fashion in comparison to the business unit of a large corporation. This is so because nothing is structured within a start-up. So instead of job experience, what you need is:

• A lot of (un)common sense,
• Ability to coordinate between different business functions,
• Multitasking as you might have to do everything (selling, purchasing, accounting, etc.) yourself in the beginning,
• Lots of patience with lots of determination,
• Self-discipline, and ability to avoid over commitments, and the ability to fulfill commitments that you have made.

Often a job experience does help in this context, however, that experience has to be rich enough to cover all important business functions necessary for the startup. Maybe a sales-oriented job helps you to experience interaction with customers or suppliers ... But not quite so if it’s a typical office 9 to 5 job. Working in a small business where one gets exposure to every aspect of the value chain may help, however.

Another drawback is you getting used to the job environment, and when you advance in your career, your comfort zone established with the structured environment might become a psychological barrier in starting up your venture. Furthermore, as you grow old, your family responsibilities also multiply, hence your ability to take risks also reduces the addition of family members. If you are not feeling confident, then doing an internship for a few months in a small business, similar to the one you intend to start, may help. Having a mentor who can guide through different steps of the process may also be beneficial.

Myth 3: Doing business is riskier than doing a job

Yes unless it’s a government job. But otherwise, the business which employs you can also fail ... if it does then eventually its employees (including you) suffer as well. One can argue that the risk of failure in the start-up is very high. But there are ways to reduce risks explained in later sections of this book.

Furthermore, it’s also too subjective to assume that chances of failure are greater for entrepreneurs than for employees, as you can also be kicked out of the job. Besides, there will be a huge psychological set back if you are fired from a job, even if it was not your fault. The dependency on regular paycheques can be lethal in this sense; but if you are an entrepreneur, accustomed to uncertainty, always mentally prepared for it, so if your business collapses, then you are in a relatively better psychological state than an unemployed person. In any case, a careful, no-nonsense, and intelligent entrepreneur wouldn't keep all his eggs in one basket and would diversify to the extent possible to minimize his risks.

And from an Islamic perspective, Rizq is determined by Allah s.w.t, so if whatever is written in your name will be provided to you if you made an honest effort for it. Interesting as an entrepreneur you experience this on an almost daily basis. So this concept makes lots of related apprehensions irrelevant for a Muslim entrepreneur. So concentrate on increasing Barakah in your Rizq by having faith in Allah's (s.w.t) mercy, and doing only the halal or legitimate things even if the profitability is seemingly less in doing so. Remember, according to a hadith 90% of a Rizq goes to traders, businessmen, and only 10% goes to the employed.

Myth 4: Need a very innovative idea

Why? As long as there is a valuable item in your hand, and that means almost everything, even garbage has some value for someone, you can sell it to the person who needs it. Don't look at some innovative ideas; rather find an opportunity to complete a chain between a supplier, YOU, and a customer, innovative ideas can come later, first important thing is to get the cash flow cycle rolling. I am not suggesting that innovation is bad in the beginning, but it shouldn't get on to your nerves, and an excuse for not moving forward. On the other hand, for innovation to be really practical, first you need to spend some time studying the value chain of your business to understand the gaps, and the possibility of certain innovative ideas to fill those gaps. Before that, it’s only a wild guess. Starting therefore is much more important than innovating.

These gaps can be anywhere in between the value chain, i.e. product design, packaging, distribution, payment method, sales method, customer service or relations, etc, but you can't notice unless you are in the market doing business yourself. Yes, you need to start the cycle of delivering the product/service to the customer, and receive payments, and to do that you don't need an idea which is out of this world. Start with selling vegetables for example, and see where are the gaps in the chain? You will surely see them in a few months if you have an eye for it ... How can you ever know how deep the rabbit hole goes unless you don't decide to go down, and see it yourself!