It’s most people’s dream to become entrepreneurs. But just how many of them actually end up being an entrepreneur? My answer is very few.
From my personal experience, plus a look at the wider community, I’ve come up with a list of five common reasons why entrepreneurs fail before they even start, and some of them might even appear contradictory to what you currently believe. Here you go:
1. Listening to People a Little Too Much
You might be surprised at this since you’re always advised to listen and take advice from people. Of course, it’s good to listen to people, but it gets to a point when listening to people too much hurts your entrepreneurial instinct.
The reality is that, as an entrepreneur, you’re the only one who understands your ideas. No other person will ever understand it the way you do. For instance, if you ever pass your idea through people to air their thoughts, if you’re very lucky, you’d have about 70% of them seeing no sense in what you’re saying, while about 30% would support you. Then it’s likely that that 30% won’t support you because they believe in your idea. They’ll support you simply because they believe in your abilities.
The case of Elon Musk with Tesla presents a good way to explain this. When Tesla started, most people called it nonsense. In fact, those of us who didn’t call it nonsense were almost clueless as to how Musk would build a successful EV company; for the most part, we only believed in his abilities. Due to the fact that humans have the tendency to believe something is wrong when most people say it is wrong, Musk could have given in and decide to abandon his EV project. But he refused to listen and today, against all odds, Musk has built a profitable EV business in Tesla.
2. Thinking That Becoming an Entrepreneur Translates to a Fat Account Balance
This is one of the biggest misconceptions about being an entrepreneur and I know where it originates. It originates from the fact that whenever we want to explain entrepreneurship, we refer to people who have made billions at it. I’ve done it in this post with Elon Musk too. However, the actual reason we talk about this set of guys is that they’re the ones we know. This concept shouldn’t be used to make you believe that all entrepreneurs must make big money.
But, unfortunately, this has made most would-be entrepreneurs set their focus on making big money, which is a big reason for many entrepreneurial failures.
Another misconception that’s closely related to this is the idea that you must earn more as an entrepreneur than you did in your last day job. While this is good thing to reach for, it should not be your main reason for wanting to become an entrepreneur. In my opinion, what should make you contemplate becoming an entrepreneur is that you have a new thing to offer the world and that you’re willing to take responsibilities for whatever outcome. For the 21st century entrepreneur, making big money isn’t his underlying passion – solving problems is.
3. They Hate Failure
Yeah, I knew you‘d give me that look. So I’m going to explain this in detail.
The truth is most people who hate failure hardly survive as entrepreneurs. Here is how. First, I’d like to make it clear that the opposite of hating failure isn’t ‘loving it.’ For me, the opposite of hating failure is ‘not hating’ it. You’d agree with me that not hating something is absolutely different than loving it. In essence, entrepreneurs need to have a non-hate attitude toward failure.
Here is a personal experience to elaborate on this.
My partner and I once started a mini boutique business in which we sold mainly men’s shirts. Generally, men are shirt-crazy in my community and they’re always willing to pay well for nice shirts. So my partner and I figured we could source non-expensive, quality shirts and sell them out at affordable prices.
Long story short, we were able to arrange with a supplier who supplied us with affordable quality shirts. However, it turned out that our timing was wrong. So we ended up with over $1000 in debt. That amount is huge when you’re just a teenager and have never had that much in your cash reserve. We were hurt, but we didn’t really hate that we failed. Instead, we took advantage of it to learn a few lessons and today, we’re a lot better at timing, thanks to that failure.
The stark truth is anyone who tells you to hate failure is unreal. The sad reality about life and business is that you just have to fail every now and then. It’s the most effective avenue nature has designed for us to grow. So you shouldn’t hate it.
4. Thinking That Having a Great Idea Translates to a Big Business
I hear many people say, “To become an entrepreneur, you only need to have great ideas and passion.” But, in reality, great ideas and passion alone don’t spring great businesses. My partner and I had a great idea trying to find a way to lower the prices of shirts. But did it result to a big business? You’re right, it didn’t.
A great idea is nothing more than a great business on paper. In the real world, you need to add other ingredients to make a great business. For instance, you need to invest in educating yourself. You also have to map out a working strategy to avoid bad timing (plus other mistakes) as in my case. Having a great idea is only a good tool to start with – not the ultimate tool.
5. Thinking That Being an Entrepreneur Would Free Up More Time
Well, this depends on your goals. If you’re hoping to build a business that would become a positive case study in the future, then you have to be ready to put in more time. Of course, it’s not healthy, but ambitious entrepreneurs spend up to 14 hours working on their business everyday. I’m not trying to say you must invest so much time. Instead, I’m trying to let you know that building a successful business requires a lot of time. As such, you must be ready to work for several hours – at least, for a start – if you want to build a thriving business.
Donny Gamble is publisher of Personalincome.org, a personal finance blog about investment strategies of the wealthy. He graduated from The Ohio State University with a proven track record of growing online businesses. He has been featured on Yahoo Finance as well as other personal finance websites.
Image credit: CC by Graeme Maclean