5 Reasons Entrepreneurs Fail to Become Successful
Here’s a shocking fact – most entrepreneurs make less income from their own business than what they earned as an employee. You may be astounded by this statistic when you think of all the entrepreneurs on television and in magazines and newspapers who have been touted as “successful.” The reality is these stories are the exception and not the standard. Five reasons exist why entrepreneurs fail and never make a profit.
Reason 1: They are too relaxed.
Remember when you were a kid and you had to follow your parents’ rules and those of your coaches and teachers? You had to get up at a certain time, go to bed on schedule and attend specific classes at certain times. You even had a designated lunch time. When it was time to go to college, those rules continued. Entering the job market, nothing changed. You were told what time to be at work, when you could take lunch and breaks and when you could leave.
By the time someone is ready to become an entrepreneur, they are looking for freedom more than success. When they use the term “successful” what they are really saying is free from the restrictions imposed by others. However, there is a reason behind those rules and restrictions. The truth is that without some type of structure, people won’t follow through on what needs to be done. New entrepreneurs are famous for this problem. They see themselves as free from set times to wake up or of following time clocks and other rules from the past. What they don’t realize is that as an entrepreneur, they must develop even more discipline than when they were an employee.
Reason 2: They focus on building an infrastructure to their business.
When a person starts out as a small business owner or new entrepreneur, they will do certain tasks that make them look like a real business. They’ll feel the need to create a website, order brochures and business cards, and even set up an office with a desk and chairs. These tasks cost the person a lot in time and money but fail to help build the business.
Instead of trying to feel like a real business, you need to put your efforts into selling your products and services in whatever way you can. Your goal should be to generate revenue for your business to sustain it.
Reason 3: They hire people for the important tasks.
When an entrepreneur runs into a problem, they think they can just hire someone to solve it. They hire a person to take care of sales, or to do their books, or to perform the operations part of the business to generate revenue. When done correctly, this can work, but it’s the formula for disaster when they look to an expert to do their job for them.
There are several reasons this won’t work, but the most important reason is that a business owner can’t effectively manage someone on a task they don’t know how to do. Also, with limited revenue, you can’t afford the large salaries that come with an expert. Instead, you should get involved in as many areas of your business as you can in the early days. Once you’re ready to hire people, you will understand their roles and how to manage them.
Reason 4: They spend too little time selling.
The fact is simple – the only way you can make a profit is to sell. Unfortunately, too many business owners and entrepreneurs spend their time in operations instead of focusing on selling. While operations is essential to a business, you’re headed for financial ruin if you spend more time there than in sales.
Spend the majority of your time selling in your business; later you can turn your attention to operations that follow the sales.
Reason 5: They fail to understand the three critical facets of being a CEO.
I have shared in many articles and in my book, The Business Bible, that there are three facets in being the CEO of a business. All three of these traits are necessary for a business to be successful. You must be able to identify which aspect you have the most of and which one is least in your personality. You must learn how to use all three facets, and even hire someone who mirrors what you lack.
- The Artist – This facet of the CEO controls the person’s desire to focus on the vision of the company, the art behind what you do. Imagine a pizzeria where you make authentic Italian pizzas using your grandmother’s recipe. You want to make sure the recipe is followed precisely.
- The Operator – This CEO cares about the vision, but also focuses on the systems that are in place to make the company operate. They not only care about the recipe, but ensuring every employee follows it in the same way with perfect results for the customer.
- The Entrepreneur – This trait entices the CEO to take big risks in helping the company grow without counting the costs. They will continue to take on more even when they aren’t sure how to implement everything.
Take the time to discover which aspect you have more of and which one is second. Look at the facet you lack and figure out how to tap into it so that it isn’t ignored. In time, you will need to hire someone who possesses that trait as their main quality. Remember that you will have to give them autonomy and independence to handle situations even when you don’t agree with them.
While most entrepreneurs fail to achieve the success they expected, many of them do. If you want to be one of those entrepreneurs who creates major success in your company, you must learn how to keep growing and find other CEOs you can model after. When you avoid these five mistakes, you are on your way to achieving that success. Enjoy it because you earned it.
Author & Business Coach
Titanium Success, Inc.