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As a renowned tax and wealth strategist, Tom Wheelwright, CPA, has a deep understanding of the entrepreneurial principles that drive business success. At the same time, he recognizes the common myths that can stifle growth and keep businesses from reaching their full potential.
A best-selling author, CEO of WealthAbility, and creator of multiple companies specializing in tax and wealth strategy, Tom has developed a set of proven strategies that empower entrepreneurs and investors to build lasting wealth. His approach focuses on innovative tax strategies designed to permanently reduce taxes and accelerate financial freedom.
Here, Tom Wheelwright shares some common myths and misconceptions that can get in the way of business growth and development.
Myth 1: Starting a business entails insurmountable risks
Any business entails some degree of risk, but the reality is some of them aren’t as insurmountable as you may think. In fact, most of the risks inherent in starting up a new business are controllable to a large degree.
The problem is that most people are brought up to believe that employment is a much ‘safer’ option than braving the uncertain waters of entrepreneurship. And it’s true that the various perks employment offers — health insurance, a 401(k) plan, and paid time‒are tempting.
But the flipside of the coin is that any employee can lose their job with little or no warning regardless of their workplace performance. A quick read through the headlines over the past few years should make it painfully obvious that thousands of employees from some of the biggest firms in the United States have lost their jobs overnight.
On the other hand, working for yourself gives you a much more secure and stable buffer against losing your job, particularly if you make an effort to build a robust and diverse client base. Of course, the risk is pretty much the same if you rely only on a single client. But broadening your list of clients offers a much more stable environment than any employment opportunity.
The secret is to build your business as quickly as possible, working your way from a single client to a diverse client base that allows you to earn as much or more than you would in your previous job. You can do this by learning as much as you can about your business so you can make sound investment decisions, expand your market, and minimize risks.
Myth 2: Starting a business is financially unfeasible
The financial challenges of starting a business make many fearful of making the effort in the first place. Again, there is some truth to the myth that entrepreneurship is financially challenging. However, you actually have a valuable ally in managing the start-up costs of launching a business: the government.
What many would-be entrepreneurs don’t realize is that the government offers several incentives for startup owners and those with an eye toward growth and expansion.
The key is to create a comprehensive business plan, including a thorough assessment of your start-up costs. It’s also advisable to calculate your projected revenue and expenses during your first year of operations.
Remember to take advantage of tax credits and deductions, the best of which are usually reserved for business owners. You might be surprised to find that many of your start-up costs are deductible, including:
- Equipment
- Property rental or purchase
- Staffing
- Legal expenses
- Marketing
Look into tax credits that may completely offset your payable taxes as well. You may be eligible for these credits if you:
- Create jobs in economically challenged neighborhoods
- Hire people from marginalized or traditionally disadvantaged sectors
- Offer qualified health care plans to your workers
- Allow paid family and medical leaves
- Engage in research and development
Myth 3: Starting a business is only for the young
How often have you heard people say “I’m too old to start a business!” Although there is a strong case to be made for starting your business while you’re still young and unsaddled with life responsibilities, there are many equally valid reasons to embark on a new entrepreneurial venture later in life.
The fact is, many people start successful businesses well into their 40s. The results of a recent study of over 2.7 million entrepreneurs revealed that the most successful were 42 years old on average. Furthermore, the founders of the fastest-growing companies didn’t break ground until they were 45.
Many others launched successful ventures later in life, including 50- and 60-year-olds, and even older.
Starting a business when you’re older gives you a broader range of experiences to draw from and more capital to invest in your venture. You can even launch a new business while continuing to work a full-time job as long as there is no conflict of interest and you can manage your schedule.
A significant benefit of starting a side business is that it allows you to take advantage of tax deductions available to entrepreneurs. This can enable you to fast-track your business as you still have regular income to rely on.
When starting a business, it makes perfect sense to act sensibly and be aware of the potential risks. However, it’s just as important to recognize myths and misconceptions for what they are and not allow them to get in the way of your plans. Now that you know some of the myths that have been debunked, you can hopefully start your business in full confidence and take the necessary steps to achieve your goals.
