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6 Reasons Why Entrepreneurs Fail in Business

June 25, 2014 | By admin
Business woman crying head in hands

Rich people are entrepreneurs, you won’t see a salaried employee hitting it big financially. It’s only natural for people to dream about setting up a business, making it flourish and expand in the future. Everybody wants to have a secure and comfortable life and managing a successful business is one way to achieve it.

However, why are there entrepreneurs who still remain unsuccessful in business? Despite all the efforts poured into conceptualizing, developing, and funding a business, why are there still businesses which lose money and eventually fail? Studies have shown that 50% of small businesses fail within the first year and only 9% will have a chance of surviving after ten years.

I’m not scaring off would-be entrepreneurs from venturing into business. This article aims to provide smart pointers to why entrepreneurs fail in business so you could avoid experiencing the same fate. Here are the reasons why entrepreneurs fail in business:

 

1. It’s all about the money.

If money is your first objective why you’re setting up a business, then most likely your business will fail. This sets you on the wrong foot since you’re primary focus is acquiring wealth, not giving value to your products or services. Successful entrepreneurs want to create and provide products which are valuable to others. They’re the ones who want to give solutions to problems, who want to make the world a better place.

 

2. Lack of a well-defined purpose.

Entrepreneurs fail because they forgot to specify a purpose for having a business. They have no vision for their business, no concrete target. These entrepreneurs rely on luck, fate, or destiny to take over. Saying “C’est la vie,” “Life’s unfair” when things go rough are individuals who won’t make it far in business. For a business to flourish, having a clear direction on where the business should go is a great help in achieving success.

 

3. Afraid of a challenge.

Entering into a business is no small feat. It takes guts to see it in its early stages and rise above the challenges. When entrepreneurs reach their comfort zone, sometimes, they’re afraid to dream more and set bigger goals. They don’t want to get stressed about new things to achieve a new goal and they don’t want to do something risky fearing it would only lead to failure. They’re content with their small goals and are happy to be where they are.

 

4. Fear of failure.

Women often don’t think they’re able to have their own business. According to the Global Entrepreneurship Monitor 2012 Women’s Report, women are more afraid of failure than men, a reason why there are fewer female entrepreneurs than male entrepreneurs. The study also revealed that women are less likely to receive venture capital funding.

Lead author of the study and Babson professor Donna Kelley stated that, “When a woman has a choice between being an employee, especially when this is associated with an attractive salary, job stability, good benefits and even high social approval, she is taking a greater risk in entering entrepreneurship; she has to forego this opportunity in order to be an entrepreneur, and therefore has more to lose.”

 

5. Poor money management

You have to learn how to control your personal budget before you think about venturing into business. One of the usual problems with entrepreneurs is impulse spending. Being an entrepreneur shouldn’t necessarily equate to lavish spending. Robert Kiyosaki in his book, “Rich Dad, Poor Dad,” revealed that successful entrepreneurs spend money after getting the return on their investment. They don’t spend once the money comes in, they wait until they get the full amount of their investment first.

 

6. Not asking for help.

A business will not succeed with just one person, it takes a team to make it sustainable and successful. There’s a limitation to what a person can do so other individuals should be included in a business for it to survive. Sure, you came up with the business idea but you need the help of other people to develop, create, market, etc. your business.

Photo credit: www.theguardian.com

 

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