Every entrepreneur who sets up a business usually starts with dreams of making it big. That’s quite understandable since the main idea behind starting a business, whether small or large, online or offline is to make profit. Most established business owners consider that in order to become a successful entrepreneur, you need to possess a winning attitude, drive for success, motivation and confidence, just to mention a few. Nevertheless, there are certain situations where even entrepreneurs with exceptional traits and business ideas still fail in the business due to one reason or the other.
There are a lot of reasons or factors out there that may cause a gifted entrepreneur to fail, and we selected the Top 10 reasons why most entrepreneurs fail.
1. Dabbling into just about any business. This is usually one the first reasons why most entrepreneurs fail. Yes, every business has the potential to hit millions, but not every business is meant for you. Entrepreneurs’ inability to carry out proper research before setting up a business has been one the leading causes of failure in business. Calling yourself a business owner does not make you a successful entrepreneur when you lack basic understanding of the business or know next to nothing concerning what makes the business tick. Dabbling into a business just because it’s trendy and everyone says its profitable is a strong recipe for failure, especially for first time entrepreneurs.
2. Lack of a Business Plan. A lot of first time entrepreneurs often forget that having a business plan is part of the package of starting a successful business. Most of them fail to prepare even a simple business plan before starting up the business. This is indeed another recipe for failure. No one is asking you to write something sophisticated or overtly complex, just a simple business plan to guide your activities on a weekly, monthly or quarterly basis. One funny thing is that some even go as far as fooling themselves into believing they have all the strategies stored right inside their heads. Even when our minds have the ability to keep large amounts of information at a time, a visual reminder of what you have planned out for your business can be the difference between success and failure. For starters you can use our Mini Business Plan Template.
3. Inadequate capital. Irrespective of how structured your business plan is, starting a business without adequate capital to cater for your overhead costs is another reason why most entrepreneurs fail. Most entrepreneur make the mistake of assuming that starting a business only has to do with sourcing enough capital to purchase what is required to start off. But you need to keep in mind that you also need to cover for transportation costs, advertising cost and other miscellaneous expenses that are bound to come up.
4. Doing the right thing at the wrong time. Quite a good number of entrepreneurs make the mistake of thinking they have all the time in the world to make things happen in their business, and generally tend to take time for granted by doing the right thing at the wrong time. This is never good for business. With so many things to do this days, 24 hours seem hardly ever enough even for those not running a business. Procrastination is indeed the enemy of success, and when entrepreneurs begin to take billable working hours for granted, failure won’t be far off.
5. Giving up too easily. There are a lot of entrepreneurs who give up way too easily when faced with a few bumps along the way. Part of what makes a good entrepreneur great is having the strength to forge on even when the road seems dark and uncertain. Remember, your business as an extension of yourself, and giving up too easily every now and then will only cause your business to fail in the long run. Be a warrior! Set a support system in place so you will get help when you need; you can work with a coach or take part in networking events with other entrepreneurs.
6. Buying what you don’t need. Purchasing a lot of irrelevant materials for your office is one common mistake most entrepreneurs make, which is also another recipe for failure when you are running a business. This habit happens to be widespread among first time entrepreneurs because they feel the need to be geared up for the arrival of clients with big bucks. This only puts more strain on your finances, which may ultimately lead to failure if not properly handled. Whatever happened to starting small? Even if you have the resources to do so, channeling such funds into other aspects of your business such as advertisement and marketing would be more beneficial to your business.
7. Failure to take risks as an entrepreneur. Being a tad too cautious or conservative has a way of working against you and killing your business in the long run. Failure to take risks is another reason why most entrepreneurs end up unsuccessfully even after years of running a business. One attribute most successful entrepreneurs have in common is their ability to take risks for the sake of their business. As the popular cliché goes “no risks, no rewards”. This is definitely applicable in all facets of life, most especially in business. You risk failure as an entrepreneur each time you fail to take the necessary risk for the sake of your business.
8. Lack of foresight. This is also another common reason why most entrepreneurs fail in their businesses. In other words, any business run by an entrepreneur that lacks the ability to prepare wisely for the future is destined for the rocks. In a world where things are rapidly changing, it is essential for entrepreneurs to predict future trends as it affects their business. What worked for you last year might not yield the same result the following year. When entrepreneurs fail to see ahead or see things from a different perspective, failure is imminent. So you need to constantly invest in your personal development and education.
9. Lack of focus. When entrepreneurs lose focus of their business objectives, they end up mixing up their goals and priorities concerning the business and ultimately lose direction. Staying focused helps to keep your excesses in check and prevents you from losing sight of your objectives. Without focus, all entrepreneurs are most likely of falter in their pursuit for success. So how do you manage to remain focused? First of all be rational and not emotional, hold regular meetings with your partners and key employees to talk about the objectives and the action plan and hold yourself accountable.
10. Lack of self control. The absence of self control is also another ingredient that invariably leads to failure for entrepreneurs. As a golden rule in business, discipline matters a great deal, and an entrepreneur who refuses to checkmate his or her excesses is only courting failure. If you are the type that spends a lot in your private life, control such spending excesses in your business life. Without self control, entrepreneurs are liable to take rash decisions that can cause irreparable damage to their business and ultimately lead to failure in the long run.