Browsing through my feeds this morning, I came across an interesting little list from Rich Whittle at the Business Opportunities Weblog, though it originated from Inc.com. The list is of 5 mistakes that entrepreneurs make. Without getting into all of the details of the Inc.com post, the list goes:
1. Ego
2. Lack of Focus
3. Excessive drive and competitiveness
4. Arrogance
5. Rose Colored Glasses
While numbers 1 and 4 pretty much go hand in hand, perhaps number 5 is worth elaborating on just a bit for clarification's sake. The post refers to this as: "Underestimating challenges through unfounded optimism. Some entrepreneurs live in a dreamworld where they discount potential obstacles and place naïve bets on shallow “hockey stick” profit projections."
Number 3 - Excessive drive and competitiveness seems like it would be a positive thing, but the keyword in that is "excessive". Some will do anything to get ahead including breaking the rules or playing dirty. You can imagine where this would take a u-turn into the negative.
According to this article from Dharmesh Shah, first-time entrepreneurs only have an 18% chance of succeeding. Granted, this article is a couple years old, but the exact percentage isn't really the point. The point is that many, many first-time entrepreneurs will fail. It sounds harsh, but that's just how it is.
There's no scientific formula for success - obviously. It is up to the entrepreneur to play with a level head and make careful decisions. Do you have a reason to think you're going to be part of the 18 (or however many) percent? Entrepreneurs put a lot on the line. They can only do their best to make sure they're not risking it all for failure.
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Success and Luck
Hey Chris,
You are absolutely correct. I was "lucky" enough to be 1 of the 18; however, when I look back on it, it's amazing how many things just happened to land in my favor. I'm not ashamed to admit that a lot of luck came into play. There were times when success and failure were only a hair's breadth apart.
I also worked night and day and made only the most ethical of desicions.
Thomas Jefferson said, "I'm a great believer in luck and I find the harder I work, the more I have of it."
Without the hard work, the luck never would have been there - but, I sure am grateful for that little bit of luck, too.
Thanks,
Clark Swihart
CAS Enterprises, Inc.
You need capital
As a past president of the Palm Springs Chamber of commerce, in my opinion the biggest cause of failure is being undercapitalized.
So many people would come to our chamber office with big dreams and little money. They then start their business and in less then a year they have lost everything.
They don't have enough money to properly market their business, buy enough inventory, etc.
The worst example is a couple that came to the Chamber Office saying they were going to sink all their money into rehabbing a bed and breakfast. When asked how much money they had left for marketing and advertising, they said they didn't need to because they were going to have the "Best" b & b in Palm Springs so everyone will stay there. When asked how new guests will find out about their B & B, they said everyone will know because it will be the best. They lasted less then 6 months and lost their life savings.
If you don't have enough money, wait a few more years to start your business
Tom Mulhall
Terra Cotta Inn, sunny Palm Springs, CA
Groove Sharpener
Early to bed - early to rise. Work like hell and advertise, advertise, advertise. Quote = Ted Turner.
Plan and preperation
Fail Boat
Most people fail before they start because they don't take action.
Unaware of financial reporting
Oh, Bull. Most Businesses do NOT fail
I've been hearing this same drivel for decades. I once asked a Dun and Bradstreet rep how they found out that a business had "failed". The rep told me that if a business moves, changes ownership or changes its name it is counted as a "failure".
Moves? Good grief. Maybe it is moving from a tiny closet to a real facility.
Change ownership? Maybe it just incorporated. Or maybe BigCo bought it out at a nice price. Neither of these is "failing" in my book.
Changes its name? Maybe it adds "Inc" to the name, or simply finds a spiffier name to use. Failure? Not by a long shot.
Most businesses do not fail. Some have a longer learning curve than others, but most do not fail. Some don't make as much money as the owner had wished. Is that failure? If we draw "careers" with the same brush, then anytime anyone changes jobs, they will have failed. Balderdash. The overwhelming majority of people succeed very nicely.
Oh, Bull. Most Businesses do NOT fail
Hi MaryAnn,
I will disagree with you that most online businesses do not fail.
They actually do and it is not a mere case of changing/shifting location as you said but a case of going completely out of online business, apparently in most cases because their expectation was for a "get rich quick scheme" which they do not realsie within their expected time limit.
Top Home Business
The Entrepreneurial Emergency
One of the difficulties that entrepreneurs face is that while there is an abundance of information available not all of it is timely or accurate. It's important to get the right information at the right time and respond with the right actions.
It's also important to see the bigger picture and to create a flexible framework for your company, i.e. one that can expand as your company grows.
Rich Schrefren has an excellent report out that looks at why entrepreneurs fail and how they can succeed. If you haven't already done so check it out - it's FREE!
"The Entrepreneurial Emergency"
my retail sotre
i own a small retail store in byram mississippi. we mainly deal with hippie stuff and most of our customers are below the age of 30. while i realize that they dont have a lotof money,most of of purchases are $10.00 or less. business was good for the frst two weeks and has slowly declined siince then. some days i make $80.00 or more and some days i make nothing. needless to day i have invested about $20000.00 on the lease and inventory, etc. Im not exactly sure what to do. The hippie thing is coming back and i am trying to hang on as long as i can. Any advice will be appreicated.
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