KUALA LUMPUR, Aug 4 — Why do entrepreneurs fail to succeed in business? Why do most start-ups fail? Are you an entrepreneur? Are you going to succeed in business or not? Well, read on to find out if you are heading for success or not.
Though failure by any means is not the focus of this article, it will provide some pointers to why most entrepreneurs fail in business and how you can avoid business failure. All you need is a willingness to learn and an open mind.
Lack of focus: “Genius is the ability to focus on one particular thing for a long time without losing concentration,” said Albert Einstein. Lack of a well-defined purpose is the major reason why entrepreneurs fail to succeed in business. I have come across a lot of entrepreneurs living without personal purpose; not to talk of business purpose. They have no dream, no mission, and no target. This type of entrepreneur says, “Let me go out and see what today holds for me.” They operate their business with no set goal. If you take a closer look at these entrepreneurs, it can be observed that their life is driven by fate. They believe in luck and simply take whatever comes to them. These entrepreneurs have lost control of their destiny. McDonald’s is famously the biggest small business in the world, and its early success was because it developed a system that worked by itself. It was like a machine. It didn’t need any one person there overseeing everything; everyone knew their roles, and they got on with them. If you’re too precious about your business and want to manually control everything rather than create an effective system, things will soon fall apart.
Not sharp enough: This literally means the holistic understanding of situations. Many entrepreneurs understand their idea, but not the market that will accept or reject the idea. Nor do they understand how accidental, uncontrollable, unscheduled innovation actually works. Or who the real competitors are. Often entrepreneurs have too little domain depth, they literally do not know what they’re talking about although they often talk well enough. Many entrepreneurs fail because they’re not actually entrepreneurs but some variation on the theme. Even worse are entrepreneurs who believe they’re terrific at activities at which everyone else believes they’re horrible. If an entrepreneur is incapable of seeing what everyone else sees, he or she is blind to success.
Fear of failure: Everyone fails. And when it comes to the business world, you have to be prepared for failure. Shying away from failure means you won’t take the risks your competitors are taking. Instead of realising your true potential and achieving all that you want, you’ll constantly be stuck in second gear. Fail and fail fast. Then learn from your mistakes and go again.
Lack of persistence: Is persistence a requisite for success? The answer is a big yes. Successful entrepreneurs such as Bill Gates, Steve Jobs and Henry Ford emphasised the importance of persistence in building a business. If these successful entrepreneurs are all pointing towards persistence as a key to success, it’s definitely a must have to achieving success in business.
Lack of persistence is the primary reason why entrepreneurs fail to succeed in business. Some entrepreneurs start their business on a very good note with high expectations but if their expectations are not met, they get weary and just when they are about to break through, they quit and say, “It doesn’t work.” They quit when just a little more persistence would have made the difference between success and failure.
“I have not failed. I've just found 10,000 ways that won't work.” said Thomas Edison. If it wasn’t for his persistence, he wouldn’t have invented the light bulb.
Inadequate capital: Cash flow is the blood of business. Inadequate capital can ruin a business, and in fact, lack of capital is the major reason why entrepreneurs fail. Entrepreneurs sometimes might come up with winning ideas or strategies but the lack of capital will hinder its implementation. “The primary duty of an entrepreneur is to raise capital. An entrepreneur must continually raise capital from investors, customers and suppliers. If an entrepreneur cannot raise capital; he ceases being an entrepreneur,” said Robert Kiyosaki.
Desire for success overnight: This is a fundamental reason why entrepreneurs fail to succeed in business. They desire instant reward and they want to get rich quick. However, they fail to recognise that it takes time to build a successful business, especially in the innovation domain. There are no short cuts to success, a business must be given time to grow and to yield profits.
If the primary motivation of an entrepreneur for being in business is to acquire wealth overnight rather than to create and add value, then they’ve started off on the wrong foot. If the drive for money supersedes the drive to create innovative products/services that will add value to the target market, then it is time for some serious soul searching.
Lack of integrity: An entrepreneur’s greatest asset in business is his/her reputation. Most entrepreneurs fail to succeed in business despite the fact that they have sufficient capital. They fail because they lack integrity. All over the world, investors, customers, suppliers are looking for entrepreneurs they can trust. With integrity, you can pretty much start a business with none of your own money. Some entrepreneurs fail to deliver when given a credit line. As an entrepreneur, you should preserve your integrity like gold. You must honour your words and agreement while avoiding shady deals and sharp practices.
Insecurity: There is a limit to what an individual can achieve alone, thus the need for team work. The entrepreneur on the path to destruction is the one who will never empower others nor seek the help of others for fear that they might outshine him/her. Great things are seldom achieved alone. Hence this “I can do it all alone” attitude needs to be eliminated.
As an entrepreneur, it’s very important to understand that there is no exclusive right to what is being done through an individual. Whatever it is that an entrepreneur has in their mind to create is not entirely theirs to dominate, they are only a vessel through which an idea, innovation or product/service is being launched.
In addition to the above fundamental reasons for entrepreneur failure, there are many other reasons and the list can grow. However, having a very good understanding of the most obvious reasons can lead to better entrepreneurship and business success.
