When we talk about starting or growing a business, the process often seems fairly straightforward: find a suitable space, purchase equipment, hire employees, increase production — and the business will start to grow.
In practice, however, things are a little more complicated. While working on business projects as part of «Live Towards», an educational program for veterans initiated and funded by First Ukrainian International Bank (FUIB) and implemented in partnership with the NGO Redut Business and KSE Business School, we explored various management decisions and examined whether they would actually help businesses operate more efficiently.
Here are five common myths that are particularly interesting to examine from an operations management perspective.
Strategic Advisor, Advisory Board Member, Instructor for the «Live Towards» and MBA Programs at KSE Business School, Vice President of ABPMP Ukraine
Myth №1. «A real business starts with its own premises.»
Imagine a small automotive service business offering paint protection film installation, car detailing, or other vehicle-related services. The initial plan seems perfectly reasonable: rent a service bay, renovate it, install equipment, and start welcoming customers.
But this raises a simple question: why do you need a service bay in the first place?
If the nature of the service allows it, some work can be carried out directly at the customer's location. You could set up a mobile workshop in a vehicle, partner with existing service providers, or rent a workspace only when needed.
Instead of investing in renovations to someone else's property, you could spend that money on equipment that directly generates revenue. A mobile business model also allows you to serve customers across different locations.
Of course, not every service can be delivered to the required standard on-site. But that is a matter of technical requirements and comparing the economics of different options — not a reason to assume that renting premises is always the necessary first step.
The takeaway: A business doesn't begin with four walls. It begins with a customer and the value you create for them. Sometimes, the best premises for a new business are the ones you don't have to pay for — at least not yet.
Myth №2. «If we produce more, we’ll earn more»
Imagine a small manufacturing business that has been successfully producing its products. It has equipment, a team, reliable suppliers, and a well-established production process. Now, an opportunity arises to double or even triple its output.
The path to growth seems obvious: buy more equipment, expand production capacity, and make more money.
But there is one important catch: manufacturing a product and selling it are two entirely different business processes.
This becomes particularly clear in food production. A business may be capable of making thousands of desserts a month, but are coffee shops prepared to buy them in those quantities? Does the price work for them? What margins can the business expect from wholesale sales? And what happens to products that cannot be sold before they expire?
That is why, before purchasing new equipment, it may be far more useful to speak with potential customers, secure preliminary orders, and validate actual demand.
The takeaway: Production capacity does not automatically translate into sales. And equipment, no matter how expensive or advanced, will not find customers on its own.
Myth №3. «Strong revenue and high markups mean a business must be profitable»
Consider a familiar example: a coffee shop. Coffee has a healthy markup, customers come in every day, the equipment is running, and sales are gradually increasing.
Everything seems to be going well. But let's look at the numbers.
Revenue has to cover coffee beans, milk, desserts, packaging, electricity, wages, taxes, and other expenses. Ideally, the owner should also earn something rather than simply keeping everyone else employed.
Things become particularly interesting when the business operates in premises it owns. With no rent to pay, profitability appears higher. But to assess the business's actual efficiency, it is useful to calculate how much it would earn if it had to pay market-rate rent. After all, the property also has an opportunity cost.
This is why it is important to calculate not only projected revenue but also the break-even point: how many products or services must be sold each day to cover all costs and start generating a profit.
The takeaway: Revenue is not the same as profit. Sometimes, a business is extremely busy but earns far less than its owner assumes.
Myth №4. «The more we process a product, the more money we make»
Let's take a simple example: berry farming.
You can sell fresh berries immediately after harvesting them. Or you can freeze them, dry them, turn them into fruit leather or desserts, or even sell finished products through your own coffee shop.
The logic seems obvious: the more processing stages you add, the greater the added value and the higher the profit.
But is that always true?
Every additional stage requires more equipment, employees, energy, packaging, logistics, and management attention. Sometimes, selling a kilogram of fresh berries turns out to be more profitable than spending several days processing and storing them, only to then start looking for buyers for the finished product.
That is why it makes sense to compare how much profit the business actually generates from one kilogram of produce under different scenarios. Only then should you decide where to invest: in a new refrigerator, a dehydrator, processing equipment, or perhaps in improving the productivity of the farming operation itself.
The takeaway: A longer value chain does not necessarily mean higher profits. Sometimes, the most efficient business is not the one that performs the most operations, but the one that earns more from each of them.
Myth №5. «If your product is unique, you must have your own manufacturing facility»
This myth is particularly interesting when we consider inclusive furniture — products designed to help people with different physical needs navigate everyday life more comfortably.
In such projects, the core value often comes not from the machinery used to manufacture the furniture, but from understanding a person's real needs. How can the furniture be made more comfortable? How can it enable someone to use it independently? How can its design be adapted to different needs?
At first glance, the next logical step is to establish your own furniture workshop, purchase equipment, and gradually expand production.
But large furniture manufacturers already have the necessary equipment, purchase materials in bulk, and can often produce goods at a lower cost.
Perhaps a more efficient business model would be to focus on product development, design, ergonomics, user testing, and quality control, while outsourcing manufacturing to partners.
At the same time, the business could collaborate with rehabilitation centers, healthcare institutions, and companies, gathering feedback and continuously improving its products.
After all, the competitive advantage of such a business is not simply its ability to manufacture a bedside cabinet or wardrobe. It is the ability to create a solution that genuinely makes someone's life easier.
The takeaway: Having your own product does not necessarily mean you need your own factory. Sometimes, owning the idea, expertise, and customer relationships matters far more than owning every piece of equipment used to manufacture the product.
What do all these stories have in common?
Operations management is not just about organizing how a company works, mapping out processes, or assigning responsibilities.
Above all, it is about making efficient use of limited resources: money, time, people, equipment, and management attention.
Sometimes, the right decision is to invest in new equipment. Sometimes, it is to find a partner, change the business model, or optimize an existing process. And sometimes, the best investment is to validate demand and work out the economics first, rather than spending money on things the business does not yet need.
It is precisely the ability to ask these questions that helps turn promising business ideas into efficient, resilient, and sustainable businesses.
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