Studies have shown time and time again that there are a variety of reasons why small businesses fail. But some are less obvious than others. Here’s a look at five common reasons businesses fail, reasons that no one seems to talk about:
Entrepreneurship is a lifestyle that is widely misunderstood.
Entrepreneurship will alter the course of your life. Starting a business is not a job. It is nothing like a job. Entrepreneurship is a lifestyle. We make it look easy, but it’s not. We glorify success and sweep failure under the rug, but we shouldn’t.
Who’s to blame? Is it the media for our sensationalization of fast money, one hit wonders with a penchant for overnight success? Or possibly, it’s our collective responsibility to say mea culpa for our unwillingness to share behind-the-scenes footage alongside our blockbuster business highlights.
Either way, we unknowingly fail many would-be entrepreneurs by omissions of truth, which are no better than a lie. What we should be saying is not easy to hear. Truths like: the problem is you have no guts, but want all the glory. You want money before you want to add value. Entrepreneurs fail because they misunderstand the intrinsic purpose of entrepreneurship.
“The purpose of entrepreneurship is not the accumulation of money, but the creation of value-adding products [and] services that will help make the world a better place for all. Wealth is a result of consistently providing solutions to the problems of humanity.” (Source: naijapreneur) If you doubt this, take a closer look at widely-known and well-respected entrepreneurs — they followed their passion and turned it into a viable business, rather than aimlessly chasing money … and they made a fortune.
It’s easy to get stuck on ‘stupid’.
As entrepreneurs, we have an innate tendency to fall in love with our idea. This seems good until it leads to myopia and our unwillingness to chart a new course. “Entrepreneurs tend to be single-minded with their strategies—wanting the venture to be all about the technology or all about the sales, without taking time to form a balanced plan.” (Source: Harvard Business School Working Knowledge)
And all too often, we don’t give ourselves wiggle room to pivot midstream if our initial idea doesn’t meet customer demand. It’s easy to fall in love with an idea that simply isn’t profitable. But if profits never materialize to the extent necessary to sustain operations it’s time to rework your plan or move in a different direction.
You want to please everybody.
Do you suffer from “the need to please?” If so, don’t bring this thinking into your business. Trying to do everything for everyone is a sure road to financial ruin. Spreading yourself too thin diminishes the quality of your offering. Instead, it’s important to know: “The market pays excellent rewards for excellent results, average rewards for average results, and below average rewards for below average results.” (Source: Goals!: How to Get Everything You Want — Faster Than You Ever Thought Possible, By Brian Tracy) Life (and business) has a lot more to offer when you play by your own rules and stay committed to your core — values, customers, competencies and offerings.