Entrepreneurs Fail as much as they Succeed
Entrepreneurship is a way of life that offers unlimited possibilities to those who truly believe in it and live by it. But at the same time, entrepreneurship is a way of life that can totally alter the course of your life if misunderstood.
Entrepreneurship is not something you can fake your way through; you are either doing it right or not doing it right simple. There are no ways around it.
To help you better make that choice, here are 7 Indicators of entrepreneurs who are headed for doom. As you go through the list, be sincere to yourself and tick each of the signs currently present in your entrepreneurial life.
The purpose of this article is not to scare you or condemn you, but rather to alert you and help you retrace your steps back in the right direction before your entrepreneurial journey goes up in flames!
1) Survival Driven (Seeking Money before Adding Value)
This is one of the most obvious reasons why most entrepreneurs fail. If your primary motivation for being in business is to acquire wealth rather than to create and add value, then you’ve started off on the wrong foot. If the drive for money supersedes the drive to create innovative products/services that will add value to your target market, then is time for some serious soul searching.
The study above has plainly revealed what becomes of entrepreneurs who think like this –they never actually attain that level of financial freedom they so much lay emphasis on. Why? Because the universe will never reward those who seek to get before giving.
The purpose of entrepreneurship is not the accumulation of money but the creation of value-adding products/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.
If you doubt me, go ask Bill Gates, Warren Buffet, Mark Zuckerberg and the likes. These are people like you and I who simply followed their passion (purpose driven) rather than following money (survival driven) and yet made a great fortune.
2) Inadequate Knowledge (Low Business IQ):
The entrepreneur on the path to failure won’t see the need to develop his/her business IQ because of the quest for money. Such an entrepreneur feel business is all about how much you can make. The fact that how much you can make is a function of how much you know and how much you can do is usually ignored. Thus, they forget that a business just like every other discipline requires certain competencies (knowledge, skill and experience) in order to remain functional.
So what do you eventually get? An entrepreneur who is dabbling his/her way through the ever dynamic world of business. In the end, failure becomes inevitable. Why? Because as an entrepreneur your ability to do is perpetually limited by what you know. In other words, you are the engine of your business.
So, to have more means you have to do more and to do more means you have to keep learning more! How do you learn more? By consistently focusing on personal development and self improvement through reading (books, blogs, magazines, etc.), attending seminars, business development trainings, executive mentorship or coaching programs, membership to a business club or network, etc.
3) Lack of Focus (Jack of all Trade)
The great Albert Einstein notably stated;
“genius is the ability to focus on one particular thing for a long time without losing concentration.”
Such is not the case for the entrepreneur heading for doom. In fact, the exact opposite is the case; trying to do more than one thing at a time eventually not achieving excellence in any. As an entrepreneur your success or failure will be as a result of how well you maximize your strengths.
Your strengths are those activities you naturally enjoy doing and would naturally do for free your entire life if necessary. This is how every great entrepreneur in history made their success; doing what they love and loving what they do.
They are not jack of all trades and masters of none, NO! They are jack of few trades and masters of some. Why? Because entrepreneurship is about using your passion to make a positive contribution for the benefit of others. Stop doing what everyone else can do and start doing what only you can do exceptionally well. Focus on your core areas of strength.
4) Fear of Failure (Risk-Averse)
Nursing the fear of failure is another reason why entrepreneurs fail in business. Entrepreneurship is about unleashing your passion and creativity to do something that you truly care about. It doesn’t matter whether what you have in mind to create is popular or generally acceptable, what matters is that it mattered enough to you that you are willing to do whatever it takes to make your idea become a reality.
The entrepreneur on the path to failure is the one who would never launch out because of the fear of failure, being laughed at, losing money, being called crazy etc. Daring the un-dared for the sake of making change happen is the essence of entrepreneurship and it means looking your fear in the eye and stepping out in spite of it. Don’t allow fear of failure hold you back, do the thing you fear and the death of fear is certain.
5) Lack of Vision (Shortsightedness)
Entrepreneurs fail for lack of vision. The entrepreneur on the path to doom is the one that will never think of tomorrow. If you cannot literally see yourself and your business far into the future beyond today, then you are on the path to destruction.
Why would you want to go into business just for today’s sake alone? Why would you want to build a business the world will no longer remember after you are gone? The essence of entrepreneurship is to perpetually be of service to humanity.
Therefore, you must never cease to ask and be able to answer this question; “What can we start doing today to meet the needs of tomorrow?” Not having this consciousness is the reason why most entrepreneurs fail in business. Since they are not thinking about the future, the need to keep improving their game will be less paramount and as a result; they end up being eaten up by those businesses that are consistently creating the future today.
6) Poor Money Management (Extravagance)
Being an entrepreneur means being able to do more with less. The entrepreneur on the path to failure is the one who is extravagant –the habit of being excessively flamboyant, wasteful or spending money irrationally. Thrift or frugality is a requirement for your entrepreneurial journey if you hope to become successful. How else do you intend to succeed if you cannot judiciously manage the resources in your disposal?
A good way to avoid being extravagant is to look into financial management systems and to classify your expenses into two categories; urgent expenses and Important expenses. Your urgent expenses are your recurrent expenses, meaning they are periodic in nature. Your important expenses are your capital expenses; meaning they are not periodic in nature but are necessary for the continuity of the business.
They are more like expenses made today in order to secure the future. Also, as your business begins to grow, don’t become one of those who start showing off the success of their business by acquiring unnecessary symbols of wealth. Place yourself on salary, this is very important. You must never take what is not yours, make it a priority to put aside and redeploy all excesses created by the business back into the business.
7) I Can Do Well All by Myself (Insecurity)
There is a limit to what an individual can achieve alone, thus the need for team work. The entrepreneur on the path to destruction is the one who will never empower others nor seek the help of others for fear that they might outshine him/her. Great things are seldom achieved alone.
As an entrepreneur, it’s very important you understand that you have no exclusive right to what is being done through you. Whatever it is you have in your mind to create is not entirely yours to dominate, you are only a vessel through which an idea, innovation or product/service is being launched.
So, you must get rid of any insecurity and every scarcity mentality you might have that someone is going to beat you to it. The more insecure you are and as a result keep refusing to solicit the help of those more better than you in certain areas, the more you endanger the chance of that idea, innovation, product or service ever becoming a reality.
Hey Tito, great read my friend! I think you’ve summed it up nicely here, and I can’t really add any new points.
But I will say that the most common reason I find that entrepreneurs fail is because they were too impatient. They expected massive growth immediately, or they didn’t prepare themselves for failure, or nothing seemed to be happening for a long time. All these are natural signs of progression for a business, but we have the tendency to view them as failures and believe there’s something wrong with our business.
This then turns to frustration and stress, and then we give up at some point. Such a shame, but it can be avoided with a realisation that patience is the key attribute to sticking it out in business. If we don’t have that, we won’t survive.
Thanks Stuart for the brilliant addition. That you started with not having anything to add, ended up meaning that you had something great to add – Impatience!
Impatience is the price entrepreneurs pay for not following their passion. The only reason why you would want to consider quitting on your business is when you find yourself doing a business that you don’t 100% love. If you love your business, then you will do it even if it means not being paid.
I am always quick to point out this fact to start up entrepreneurs, business is not a sprint race, but a marathon. It will take time, energy, cost and sweat to make it work. If you are not prepared to go the whole nine yards, most times without any form of monetary reward besides the sheer joy of doing something you love, then try employment.
Thank you for adding this valuable piece to the discussion.
Welcome to naijapreneur! Good to have you here with us.
Tito, thanks for this piece. But, can’t there be a connection between survival driven passion and purpose driven one? Considering the poverty situation in Nigeria,. I am a good example of an entrepreneur that started out with a survival driven passion, when I could not get a job,.some years after school. Eight years after, my story is changed. It is now purpose driven.
Thank you for sharing your story. Of course there can be a connection between survival driven passion and purpose driven. Your story is a perfect example.
But as you must have also guessed, not many people easily make this transition. Hence, the need not to encourage it from the start for most entrepreneurs who are about to go on this unusual journey.
Having the right mindset from the get go will save a whole lot of mistakes down the road and better position the startups to succeed on the long run.
You get my point?
Awesome post bro! You’ve said it all 🙂 playing the game alone will surely make you get burn out and get fed up!
thanks for the input. Certainly we cannot expect to build a really SIGNIFICANT business all by ourselves. We need diverse talents of others to compensate for our weaknesses.
I thank u guys for the big information that you have fed me with.I will need more of your help because about to start my business but less knowledge. Kindly send yo personal phone # to Samuelson go long gmail.com
Nice one Tito, keep them coming!
Thanks for the kind words, It’s great to have you stop by here.
Hope to see more of you around?
Another informative and passion rich post from the MAD man. Great job Tito!
I think the first point you listed is the cruch to main entrepreneurs failure. It’s all about the money. I think there should be a potential to create income…because that’s what business is about, to turn a profit (in the long run). But the first importance consideration when starting up a business should be the impact of value to others. Because if that’s not identified, then that means that a customer base, or target market isn’t identified.
You know Tit – I can’t argue with any of the 7 points you listed. Great job on this. The last one (I can do it all by myself) can devastate any person, quickly. WE NEED community. WE need the minds of others because we can’t be on our A-game 100% of the time.
Great job man!
Like you said JK, every business needs to turn a profit for it to remain in business. The problem however is the unnecessary impatience on the part of most entrepreneurs who want to turn in profits without adequately providing superior value.
Entrepreneurs must understand that VALUE is the ORIGIN OF PROFITS.
Thank you for your contribution.
I like how you sliced that Tito:
“VALUE is the ORIGIN to PROFITS!
Excellent, all very good examples of who we must NOT be when it comes to successful entrepreneurship. I thought your first point was interesting because I remember reading a blog post a long time ago on Blogging Bookshelf from Tristan about how he must “blog like his life depends on it,” so he argued the other way that he needs to do this for survival. I can see both arguments. I am definitely not pursuing my blogging business for survival at this point, which I think is probably better for me. Otherwise, I’d be freaking out!
I definitely used to be a culprit of #7. I had another blog and lots of other niche sites and was building ZERO relationships online with others. I thought it was weird and didn’t want to, but now I’m just used to it, especially since I’ve become addicted to Twitter and now try to comment on other blogs when I get the chance.
Good stuff and a great reminder of what we must not fall victim to when it comes to business!
It’s easy for us to be caught up in the trap of “I can do it all by myself” every now and then, because of our entrepreneurial energy. We often think, if it has to be done, then it has to be by me. In the end, we end up short changing ourselves because of our shortcomings in those areas that we refuse to collaborate with others on.
I have a simple rule i follow concerning this;
“I can do what you cannot do, you can do what I cannot do, TOGETHER, we can do the impossible.”
Thanks for your input Elise.
I can honestly say that I too am a little guilty of #7. Well, I learned better these past few weeks.
I would like, however, to add something about no. 1 since that is a bit controversial and can be interpreted in the wrong way. I’m sure you’ll agree with me that there’s nothing wrong with wanting to make money. But if that’s the only thing on your mind then you’re set on a wrong path.
I think it’s all about the balance between these three things: being useful to others – making money – doing what you like.
Thanks for the post, all the best! Cosmin.
Brilliant contribution. I couldn’t agree more on balancing those three spectrums;
-doing what you love
-making money in return
the problem as you pointed out is that people focus on the last one first and totally miss the point of doing business as a result. The essence of articles like this is to let entrepreneurs understand that making money alone is not the only goal to pursue in business. In fact, that unless other goals has been pursued and met, the goal of being profitable will not be achieved.
Thank you Stefan for your input, welcome to naijapreneur! Good to have you here with us.
I appreciate the comment. In consistency really does kill a business, because consistency is what customers depend on every time they do business with you. They want to be re-assured that you will continue to give them the best.
As a small business trainer and mentor, I agree with all the points you have listed, but primarily poor money management. Monthly negative cashflow (spending more money than you are earning) is disastrous to the long term survival of your business, and also personally. There is only so long that you can survive in this manner.
Fear of failure is also up there. Being afraid to “put yourself” and “your business” out there for fear of rejection is a killer. You may offer the best service and/or products, but if you are too afraid to expose your vulnerabilities – no-one will know about what you have to offer.
Thank you for that valuable input. Poor money management is really one big issue for entrepreneurs, this is why I often emphasize they put the making money secondary and make creating and adding value primary. Once an entrepreneur begins to sleep and dream only about how much money he can scrap from his/her business, they will no longer be focused and will only think of ways to spend the money extravagantly.
#7is HUUUUGE in my opinion. I think it kind of comes with the territory of being an entrepreneur. Isn’t that why entrepreneurs get into business to begin with? They think they can do something better than it is already being done. I think everyone starts of thinking they can do it all themselves and go through a learning curve where they realize “yeah…i need help or I’m going to fail…or lose my mind”. I think I’m in that transition phase right now.
Oh it’s good you are now realizing how one is too small a number to achieve greatness. True we can start out by our own, but in the middle we realize that there’s so much we can do by ourselves we must eventually enlist the help and talents of others in order to build truly SIGNIFICANT businesses.
Thank you Eugene for your contribution.
Lack of focus. That gets to me a whole lot. I’ll tend to focus on just one thing (addictive personality) and the move around from item to item. Quickly becoming a jack of all trades, but not really accomplishing much in the process. If only I could go through life, focusing on a few of my favorite things – and becoming highly proficient.
The way we are as entrepreneurs is very different from how others are. We are configured to generate ideas and this is why focus is crucial to our success. Without focus we cannot achieve much because our ideas will be standing in our way. So we have to be able to find a way to focus on one idea per time, this way we can be able to get the most from each idea we embark on. The less we do per time, the more we can eventually achieve on the long run.
Thank you for your comment, good to have you on the site.
Indeed true!! I commend you for arriving an article like this. Its an eye opener to me. As a newbie blogger, I should how to manage well my online businesses. Too much of money thinking will not do anyone good. Cheers to this post!! I would love to visit again and see your other articles. I knew it will be beneficial for me too.
Thank you for stopping by here and sharing opinion about this vital issues. Newbies are the ones who should be more careful when doing business, especially knowing what to really pull all their energy into -Focus.
So welcome to the world of business, and i certainly hope you will stick around?
very interesting conversation and tips …………….the reason for failure are very well mentioned in the blog…… one small thing i would like to share……
management of you and your office as whole is a big issue especially for newly established business. Management of you includes the your eating, sleeping and working habits. The balance between your home and office time management. Management of your office means to keep the HRM, data and your client-age information and correspondence in order. Maintain the list of priority and know the right time to hit the iron with full force and force shall be provided by your time and office management skills
Management skills, especially striking a balance between home and work life is critical to the success of entrepreneurs. One shouldn’t suffer for the other. Thank you for your contribution!
tito great piece,u are just amazing.i tink High cost of doing business is also a factor to consider why business fail in dis contry.
The operating environment in Lagos Nigeria is such that many businesses incur heavy costs in order to thrive. Borrowing is expensive because of high interest rates. There is poor electricity supply so people have to buy generators which need constant servicing and maintenance and fueling all of which don’t come cheap. Traffic congestion on Lagos Nigeria roads as well as multiple taxation also contribute to reduce man hours and profit margins on sales.
You really raised some vital points here. Most of these fall under the external environmental factors peculiar to our operating environment in Nigeria. Really, they do have a role to play in why entrepreneurs fail. I know for sure how the cost of fuel because of low power supply can affect a business adversely.
Thanks for the brilliant insight here Roland. Would love to see more of such contributions from you again. Hope to see more of you around.
You people are just great.I am planning to start a business and you just realised me about all the perspective of being an entrepreneur.What i know is that your belief in yourself and the positivity is what which matters and also the excuses which i make to our self which sets us back.
Thanks for dropping by. Glad you found the article useful, do stick around!
Tito – Great article. As we all know entrepreneurship is not for everyone. It takes special set of skills to succeed in entrepreneurship. I particularly like #3 and #5. Those who try to be everything to everyone cannot get anywhere. By the same token if you are not ready to be in it for the long haul you are likely to give up easily before you even have a chance to succeed.
Thank you Harry!
Great comment here and thanks for stopping by.
They do fail in business when the don’t plan about it.they belief the can make it
thanks for your share guys
thank for make me knowing all issue that make the entrepreneur fail. but have a question.
” what are relevance of macro and micro perspective in describing the success or failure of entrepreneur activities” thank u
Thanks for giving up me some valuable ideas. I have nothing valuable to add your points,but i suggest an entrepreneur should be very careful when hearing the other peoples opinion.
Tit,tanks a lot for all dis lesson u re great.please i have a question and it gose like dis.NIGERIA AS A NATION HAS PASSED THROUGH THE DARK AGES OF ENTREPRENEURIAL DEVELOPMENT.WOULD YOU CONSIDER HER EXPERIENCES EXPCEPTIONAL? JUSTIFY YOUR ASSERTION FOR OR AGAINST WITH REASON.Pls i need ur answer.
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Great blog you have here but I was wanting to know if you knew of any forums that cover the same topics
talked about in this article? I’d really love to be a part of group where I can get opinions from other knowledgeable individuals that share the same interest. If you have any recommendations, please let me know. Thank you!
Thanks for a very informative website. What else may I get that kind of information written in such a perfect manner? I have a venture that I am simply now running on, and I have been on the look out for such info.
Howdy! This is my first visit to your blog! We are a group of volunteers and starting a new initiative in a community in the same niche.
Your blog provided us beneficial information to work on.
You have done a wonderful job!
Epic man, this article gave voice to a lot of the ideas I had after observing people close to me fail in business, it also had stuff i could personally learn from. Concise, accurate and well written. A must read for every Nigerian entrepreneur
Great one tito,i use it to pass my exams excellently
This is one among the best websites with useful infor for enterpreneurs i have ever visited.bravo mad Phillips
Thanks for the post.. it opened my eyes and mind in getting up back for my business.. I really lost for some times in handling my business, and i always find articles on how to success in business, until i realize maybe what i really need is to find the mistakes that i made before i can continue to plan for the success..and your article have described it well.. thank you..GOD bless..
After 5 years of existence 80% of business fail due to lots of struggles along the way. Most of the reason for failling business even the business has a better plan, is lack of techniques and strategies. In this uncertain economy is the owner don’t know to play with it the business will probably in difficult stage. In helping those owners to avoid business struggles and to increase profit is to learn the habits and mindset of a millionaire entrepreneur.
The most fearsome situation in business is when you feel like failing.. It happens to each and every business owners for various reasons.. Some may be due to mismanagement, If that is the reason you may try to figure out what techniques should you do to solve the issue. Also consider the help of business experts, thus they have a wide experience in operation as well as managing people. Mind Strategics Learning Consultancy is here to help those business owners leading their way to success and assuring a greater profit on most possible way.
If you once failed in your business, get up and move on, it’s not the end of the business world for you. But this time be careful on how you make decisions. Get a business consultant, so you may have a guide on your way. You may also try to attending business seminars and training it will help you a lot in developing your knowledge in business techniques and strategies. If you want to reach your goal don’t waste time and start moving on.
Thanks for your input here…quite impressive contribution. Really appreciate it!
Failed business is caused by mismanagement. Based on statistics, 80% of business failed in their first 5 years and another 80% in the succeeding years, until only 10% remain. But, there is no reason for people to get afraid of starting a new one, thus there are business experts that could guide them to boost their profit. Therefore, getting more profit probably no failed business in the next year to come.
It is given that you have the ability to handle and run a business, but your ability and knowledge should not stop there. In the business world you may not be able to continue to exist if you don’t know how to balance everything. There are times that you will lose your focus and failed to do some important things. In that way, learn to develop your knowledge try attending seminars and trainings to improve your ability and stay focused in business operations and management be on top of everything and you will see how rapidly increase your profit.
It’s true, that if you want to be successful in your business don’t spend the company’s money on unnecessary things. Checkout which is not needed and narrow down your expenses, get some advice from a business expert you may also attend seminars and training to be able to develop your ability on financial management as well continually increase your profit.
Well said. By the way, I think proper planning and keep calm throughout the journey is also necessary.
This is a great list! I have found that my success in the business world is due to the fact that I follow the careers of those who are more successful than myself. I have been following the career of Mark Hurd for the last few years now, since he has taken over at Oracle. I have also been impressed with this leadership and ability to turn a company around. I have closely following his statements at OpenWorld 2016 and I am excited for what he has in store. Here is a link to a website that covers all his business successes: http://markhurd.com
I was once a victim of poor money management. I spent about NGN 1000 daily from a NGN 100,000 investment. Good to be out that such phase!
I would say you hit straight home! Things I may be doing, but I’m still in denial about. Thanks for this list. Will surely keep it handy to remind myself from time to time.
Businesses fail because of poor leadership. The leadership must be able to make the right decisions most of the time. From financial management to employee management.
your research is educating. thanks
HI TITO PHILIPS, JNR.,
You describe is very well.
This is the best article that elaborates entirely on why entrepreneur fails in their life.
There is a saying: Everyone desire, but only a few deserve.
Thanks for this great stuff. 🙂
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