It Takes Money To Make Money and Other Dangerous Business Myths
By Anna Johnson on July 23rd, 2010Heard any of these dangerous myths lately? It takes money to make money. It’s not what you know, it’s who you know. Ready, fire, aim… not ready, aim, fire. Entrepreneurs are born, not made. Buy into any of these and other generalizations at your peril!
I’ll admit to spouting off some of these sayings myself. And doing so is not inherently harmful… as long as you remember that generalizations are, by their very nature, descriptive NOT prescriptive.
In other words, the entire point of making a generalization is to DESCRIBE a statistical phenomenon… NOT to PRESCRIBE it to yourself or your business.
That something is a generalization – as opposed to a FACT – means that it reflects a COMMON but not a universal condition. And, again, a generalization is a description of events, not a prescription for how you should operate your business.
Yet, it’s in adopting and applying myths like ‘it takes money to make money’ that you, as an Internet marketer, risk seriously undermining your business.
Make no mistake: applying these kinds of myths to your business or life can be dangerous. Here’s why…
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Let’s look at the myth of ‘it takes money to make money’. This myth implies that you need to invest a certain amount of money in your business in order for it to exist, let alone grow and generate satisfactory financial returns.
This is a myth because it’s not inherently true. There are PLENTY of businesses you can start – including an Internet business – with NO money.
In all cases, the question is not ‘how much money will it take to start a particular business’, the questions are:
- What resources do I need to start this business?
- How can I get these resources?
- What can I trade in order to get those resources?
- Who, where, when and how can I trade what I have for what I need?
In many cases, money is the most obvious resource. But if you don’t have much or any money to trade for what you need, you just need to get creative.
No, it may not be easy to acquire or even to apply these resources. For example, you may need to trade time and mental effort in order to learn rather than buy certain skills. Or you may need to get out of your comfort zone and negotiate with investors or suppliers.
For example, you might need to knock on a lot of doors in order to raise money from investors. Or you might have to do contra or barter deals with others where you trade your time in providing certain professional advice in return for, say, a piece of software.
Money may make it easier to get what you want, but it’s not having money per se that matters. What matters is having something to trade.
That’s why ‘it takes money to make money’ is such a destructive myth when you use it as a prescription rather than a description.
Sure, statistically you might say that most businesses in your industry or niche started with a certain amount of capital. But when it comes to YOUR business, it’s not only pointless, but downright debilitating, to assume that YOU need money to start your business.
If you take this view – and you don’t happen to have much or enough money – your logical conclusion would be that you cannot start your business. End of business. End of dream. End of story.
But if you see this generalization for what it is, you’d simply take the view that money is just one type of resource that could be traded for the resources you need to start your business. If you don’t have this particular resource, you just identify what other resources you can trade instead. Now, you’re in business. Dream continues. Success awaits.
And here’s a bonus if you don’t have money to trade and have to get creative: the more creative you are, the more successful you’re likely to be as an entrepreneur. Consequently, the more practice you get in exercising your creativity – such as having to come up with something other than money to start your business – the more creative you’re likely to be.
In any case, no generalization such as ‘it takes money to make money’ has any role in determining your individual business strategies, tactics and other decisions.
Remember, they’re GENERALIZATIONS NOT UNIVERSAL TRUTHS. Based on that fact alone they should only be used to describe but NEVER to prescribe what you do in your unique situation.
So, rather than let a silly myth blind you to what you can actually achieve, open your eyes and look at the situation objectively. Rather than assume you can’t do something, think about HOW you CAN do it and, better yet, how you can turn the situation to your ADVANTAGE.
