Business

Before you launch that business, dispel myths

If you've been thinking of starting your own business, you may have some doubts that you can make it work. This may be for good reason, too.

According to a study by the U.S. Small Business Association, only two-thirds of all small business startups survive the first two years and fewer than half make it to four years.

But before you let doubts quash your dream, take some time to examine them. They might turn out to be not true. From Scott Shane on Kiplinger.com, here are four common myths of entrepreneurship:

It takes a lot of money to finance a new business.

Not true.

The typical start-up requires only about $25,000 to get going. Successful entrepreneurs design their businesses to work with little cash.

Venture capitalists are a good place to go for start-up money.

Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars.

Banks don't lend money to start-ups.

Federal Reserve data show that banks account for 16 percent of all financing provided to companies that are 2 years old or younger. That's higher than the amount of money provided by trade creditors, friends and family, and many other sources.

The growth of a start-up depends more on an entrepreneur's talent than on the business he or she chooses.

The industry you choose to start your company has a huge effect on the odds that it will grow. For instance, the odds that you will make the Inc. 500 are 840 times higher if you start a computer company than if you start a hotel or motel.

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