21st Century has been witness to the rise of entrepreneurs and how they have created an impact on our societies. How they have changed not only their lives from nothing to everything but also the lives of many around the world. Some inventions, plans and strategy that was executed to the best made difference to the world.
Such people and their lives have been played as an inspiration guide before us. We all know some of the famous entrepreneurs around us who have been an inspiration to us but we seldom know about those who failed whether in the starting or in the mid. As someone wise has said that the best lessons are stored in the story of failures and not success thus we must know why entrepreneurs fail.
There could be many reasons both external and internal for failure but a true entrepreneur is the one who gives no excuses to failure, accepts failure, corrects it, and succeeds. The present time is a time where many people have a deep desire to become an entrepreneur. They don’t want to seek jobs but give them to others.
In this crowd of aspiring entrepreneurs, only a few succeed while many of them fail. Thus it is important for us to know why they fail so we can course-correct ourselves if we are making the same mistakes that they made.
Here are five reasons why entrepreneurs fail:
1. They don’t plan comprehensively
Planning is an essential part of a successful entrepreneur and who doesn’t plans well faces failure. You need to write a comprehensive business plan and create a blueprint of your business. This needs to be done at the professional level where you conduct a feasibility analysis of your business and then carve out a plan.
Take help from professionals when needed. A faulty business plan may prove to be equally failure thus planning is quite essential. A plan is made while considering many aspects especially when it comes to capital investment, time investment and return on investment. These three key points should be the focus of a successful plan.
Farsightedness is also an essential feature of successful planning where entrepreneurs need to have a vivid plan and not just short term plan. Though the execution must be step by step a long-term plan should always be there for success. Entrepreneurship is more about patience and perseverance than one-night success.
Most of the successful entrepreneurs today that we see have grown in years. Thus a plan which is comprehensive and has far-sightedness succeeds more often. Failed entrepreneurs often get carried away with short term success and often fail to convert them into long term success.
2. They don’t do a review of their progress
Maybe everything for now is going perfect as per your wish but if you don’t analyze your progress then one day at a sudden you may get blow outta nowhere. Many a time’s entrepreneurs ignore to do a comprehensive review of their work and progress. Review of your work often gives you feedback on what is going fine and what is not.
A critical analysis is thus very essential when it comes to building your business, succeeding, and then maintaining it. Business analytics, reports of audits, data mining are some prominent methods by which you can take feedback from your progress. You can also appoint an independent analyst who can give you a comprehensive report of what’s going on within your business. Many prominent companies like Nokia have failed because they were unable to predict the future while being consumed in success.
If you are a newbie entrepreneur with fewer resources or capital to spend on such an analysis. Devout few hours of every week in analyzing your progress.
Don’t hesitate to take suggestions or opinions from your colleagues or employees. Lastly, never gloat about your success too much ignoring the upcoming danger in front of you.
Don’t take small issues concerning your business lightly and always be focused to correct anything that may have potential harm for your business.
Failed entrepreneurs always ignore such perils believing that if the present is going fine then possibly there won’t be any danger. Such ignorance costs dearly which they realize quite late when much water has flown.
3. They often run behind money
Well, every business revolves around income maximization and increasing the return by every quarter but for an entrepreneur, money should not only be the only motto. As mentioned in the first point that entrepreneurs who often don’t have far-sighted plans fall into the trap of shortcut money earnings and they often run behind it ignoring the rest. A small example can explain to you what this point exactly means.
Suppose, A starts a restaurant business and in a short time the business picks up. As he saw that he is getting good returns, he reduces the quality of food and service to maximize his return. Though it may work for him for a period of time as the customers will realize that the quality of food has fallen they will part away from his restaurant.
Thus for a small-time, he earned a lot of money but in long term, he lost his business because instead of focusing on providing quality food and service his focus was to maximize returns. A successful entrepreneur on the other hand will give priority to serving his customers rather than focusing on money. This doesn’t mean that you ignore your profit and return maximization but there should always be a fine balance between the two.
4. They don’t often take risks
Many quotes have been devoted to risk and the most popular of them goes as: The biggest risk one takes is that he doesn’t take any risk. Without going into the sea you can never reach the other end. A sailor needs to take the risk of sailing through the turbulent waves in order to cross the ocean. This is what applies to entrepreneurs as well. Taking risks is an essential part of successful entrepreneurship.
Risk doesn’t mean daring to do things without planning. A successful entrepreneur takes a calculated and well-planned risk. Risk is essential for growth. Since a business stops to grow without trying something new thus one should always try to introduce something new in the business. Thus sometimes taking risk is essential to growth and success. Maybe at some instances, it may not work but still, you will learn a lot from the mistakes.
5. They often fear to fail
Those who fear to fail hardly move through the stairs of success. In his famous book Think and Grow Rich, Napoleon Hill has pointed out that people who often fail have the fear of failure. This fear of failure is often attributed to societal pressure and criticism that one may face after failure.
The other common reason for fear is the inability of people to move ahead. It is not that successful entrepreneurs have never failed but despite getting failed they have never stopped trying and have learned their lessons from failure and moved on. Thus fear to fail often makes people reluctant in trying out new possibilities and taking risks.
The most popular case happens with entrepreneurs who have become successful but due to fear of failing in a new initiative they often don’t try something new. As an entrepreneur, you should always know that success and failure are part of an entrepreneur’s life and no one has ever reached their goals without taking risk, failing, and then trying it again. Thus your fear should never stop you from moving ahead and doing what you always wanted to do.
Apart from these five points, there are many more reasons why entrepreneurs fail. There should always have motivation and passion to do something. Money alone can never be the only reason for an entrepreneur. Passion to do something always keeps you motivated and helps you in enduring through the hard times.
The will to never give up is an essential part of successful entrepreneurship. One should also not be inflexible to situations and should always be ready to accept their fault, course correct it and move on.
There is not only one way of success and thus you should be flexible enough to try something new if it doesn’t work. Having faith in yourself is lastly the most important part of being a successful entrepreneur. There will always be a time when everything will go against you and your interest. Having faith in yourself is thus very necessary in order to succeed as your faith inspires your team to fight hard and win the battle. Never give up trying and you will succeed one day.