JOHN GRAHAM: Business truisms that aren’t true
Some business ideas seem to have a life of their own, particularly since they sound so reasonable. They’re so much a part of the culture and so obvious that they go unchallenged, requiring neither proof nor explanation. Since they’re “self-evident,” they gain truism status. But once unmasked, they’re revealed to be what they really are –– untrue.
But that’s not all. Some truisms aren’t only false; they can also be downright dangerous. Here are seven popular business truisms that deserve a closer look:
1. “It takes money to make money.” This one is so obvious that it has earned a permanent place in the pantheon of business lore. Yet, it has taken a life of its own for a less than obvious reason. Strangely enough, it may survive because it offers unparalleled comfort.
“Comfort?” you say? How could not having money be consoling? If I believe that it takes money to make money and I don’t have money, then I’m off the hook; home free. Why work hard, be persistent, make sacrifices, put yourself at risk, or even try when the cards are stacked against you?
In other words, if it takes money to make money, why waste your time trying to climb the ladder of success when you lack what it takes to do it? We put limits on ourselves when we permit an idea such as this to guide us.
2. “I know, but it’s a tax-deductible expense.” The worst money mistake I ever made was agreeing to make a presentation at a conference that was scheduled halfway across the country. The convener held out the occasion as an opportunity to meet and present to possible clients. He described it as “a free pass to the hen house.” This was his justification for not paying a speaker’s fee or covering travel expenses.
I can still hear myself justifying spending the money since at least the expenses were tax deductible. One way or the other, everyone in business is lured into footing the bill for things that may not be worthwhile. Just because something may be tax deductible doesn’t make it a smart move.
There are times when doing something for free makes sense, just don’t justify doing it because it’s tax deductible.
3. “The harder you work, the luckier you get.” How could anyone question this idea? It not only seems so obvious, but it’s ingrained in our culture. All that’s needed is to hear it enough times and we become believers.
Not too long ago, insurance agents were lured into the business with a compelling enticement: “Work hard in the business for 20 years and then the business will work hard for you for the next 20 years.” Many professions offered similar lures. It sounds like a good deal: If you pay your dues, there will be a positive payoff.