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7 Myths About Small Businesses

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There are many myths about many things prevalent in all over the world. The small businesses are no exception. The following are the 7 most common myths about starting a small business

1. Starting a small business will let you write off all your expenses

There are many rules governing the business expenses. All the expenses do not qualify as business expenses. Some legitimate business expenses can be claimed if that particular expense fulfils one or more regulatory conditions. An entrepreneur is never able to write off all his expenses.

The laws and regulations of any Government make it mandatory for all kinds of business activities to register themselves with the regulatory authority of that country or province. A business can be registered as a micro, small or medium enterprise unit (MSME). It can be registered as proprietorship, partnership or a one person company (OPC).

3. If the sales are miniscule,it is not a real business

A business activity may involve the sale of only one or a thousand products, but the Govt. expects you to pay taxes and charges applicable, no matter how small the business is. The size of the business does not matter. Even for a micro business unit, you have to declare the income and follow all the regulations that any legitimate business has to follow.

4. No compliance required for online business

A business enterprise could be operated as a brick and mortar entity or an online platform. Every business has to file compliance. If you are selling GST/VAT taxable products and/or services over the Internet, you have to collect and remit GST/VAT just like any other business.

5. Home-based businesses get all types of tax breaks

Home-based business owners are allowed to claim some expenses on their annual payable income taxes that non-home-based business owners can't claim An expense such as home heating costs or the cost of house cleaning can be claimed only on the basis of actual business usage.

6. Government offers grants to start a small business

The government rarely provides grants for starting small businesses and even if it does, it is earmarked for special groups of people or particular regions/economic areas of the country.

7. A small business will give you a dream lifestyle

A small business owner has bleak chances of becoming an overnight millionaire. He may be able to live a fulfilling life as he is his own boss. 

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Author
Vinay Singh
Vinay Thakur is Managing Partner in Corpseed. He focused on payments, digital transformation, and financial technology for over 15 years and holds strong expertise on fintech startups, banking innovation, and investors with a keen understanding of the trends and activities of startups, banks, and investors in the space.