Published: 13 May 2008 | Last Updated: 27 May 2008

There are many common myths about entrepreneurship. Scott Shane, the A. Malachi Mixon Professor of Entrepreneurial Studies at Case Western Reserve University, and author of seven books, the latest of which is The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By , posted an interesting article on Top Ten Myths of Entrepreneurship. Combining that list with other common myths, this is the most important five myths of entrepreneurship that you should know.

#1. Most entrepreneurs become rich.

Entrepreneurship can create a lot of wealth, but this is not a given. In fact, most startups lose much money. The world of entrepreneurship creates a lot of wealth, but it is very unevenly distributed. Only the top 10 percent of entrepreneurs earn more money than employees. The typical entrepreneur earns less money than he would have earned working for someone else.

#2. As long as you have a great invention, it is easy to become successful.

It takes much more than just having a great innovation to become successful. On the contrary, you can still be successful without a great invention. All startups need to go through many hardships before becoming successful. Google did not become successful overnight.

#3. Starting a business is easy.

Again, startup is difficult business. Much time and effort have to be devoted into starting your own business. Most people fail after trying to startup. According to Scott Shane, seven years after beginning the process of starting a business, only one-third of people have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months.

#4. Starting a business requires a lot of money.

Some people are on the other end, thinking that you need a lot of money to finance a new startup. In fact, typical startup requires less than $30,000. Many successful examples of startups work with the little cash they have.

#5. Eventually, startups achieve their sales aim.

The U.S. Census shows that of the 590,000 or so new businesses with at least one employee are founded in this country every year, fewer than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for. About 500 firms reach the $50 million in sales. In fact, only about 9,500 companies reach $5 million in sales in that amount of time.

Keep these in mind before thinking of starting your own business!