Many entrepreneurs started their business ventures as a scrupulously planned course of action. A brilliant idea, a desire to change the world or the conviction it was high time to spread the wings and escape the rigid corporate politics. Others were forced by the circumstances – a layoff, parenthood, the need of flexibility. No matter the reasons behind setting out on this journey, many entrepreneurs fail to achieve their goals.
Job security is over. In the UK the unemployment rate will peak in June next year at 7.7%. November statistics show precarious conditions of the labor market in Spain- 4 million people registered as unemployed, 20% more than November last year. The pandemic has exposed millions to the prospect of staying unemployed for months to come. So what do you do knowing that it will take longer than usual for the next job to come your way? Wait for better times or become an entrepreneur? Before you pick the second option, check out what causes entrepreneurs to fail.
Some entrepreneurs fail to find the right partner
When a friend of mine lost his job, we brainstormed many ideas of a possible venture together. But with time, his enthusiasm waned as we narrowed down the list of projects to very few most feasible ones. The outlook of staring a business seemed like a step too far out of his comfort zone. I could no longer take his initial interest seriously. Finding an idea is a job on its own. But finding the right partner is one of the cornerstones of becoming an entrepreneur. Because your associates should be there to support, solve issues together and boil with new ideas. And your closest friends or family members might not always be the right fit to pull together when chaos takes over. Entrepreneurs fail because they look for people they feel comfortable with, instead of focusing on what skills a perfect match should possess.
They fail because they do not ask questions
Building businesses is about enhancing people’s lives, launching groundbreaking solutions, or providing clients with alternative ways of satisfying their needs. Let’s assume you have all the infrastructure set up, it is time to go on the journey. Entrepreneurs come across administrative, financial, psychological setbacks. How they navigate them strictly depends on the questions they ask along the way. Not having developed the ability to ask questions to guide them to explore what needs improvement, sets them on the track leading to failure. They may not always avoid hurdles but having the right questions is key to building a winning strategy.
Entrepreneurs fail to be observant
Successful entrepreneurs observe the world around them. And not only their customers and closest competitors. They keep tabs on the players in apparently unrelated industries and use changes in those industries as an inspiration to resolve unsatisfied needs on their markets. The capacity to observe is useful in times of crisis or when a company is undergoing a turnaround. Entrepreneurs oblivious to the dynamics of their markets fail to see changes which may in a long run impact their operations. And this lack of observation and subsequent anticipation of possible outcomes, leads to unsuccessful attempts to build a business.
Some avoid experimentation
The anticipation and intuition are powerful tools. But without experimentation they remain suppositions. To set things in motion there needs to be a stage of experimentation. Surveys, tests and some extra budget too, are there to help with exploring what the market needs. Being blinded by their own desires and launching products based on premonitions without a thorough research is a secure way to a dead-end street called failure.
They are not resilient
Sometimes entrepreneurs are so consumed with getting to the objective that they fail to see warning signs concerning their behavior. Preoccupied with not achieving key metrics, overpowered by self- doubt or greed – entrepreneurs tend to either bury their heads in the sand or persist doing the same things time and time again with no improvement whatsoever. What do entrepreneurs need when going gets hard? – Resilience. Resilient people have growth mindset. As conceived by psychologist Carol Dweck, growth mindset allows to achieve goals by accepting challenges, learning from criticism and successes of others. As opposed to people with static mindset, growth mindset allows them to see setbacks as opportunities of growth. How many entrepreneurs do you know who got discouraged by their own failures until eventually desisting? Was their idea bad? Most likely not, but it might have been squandered by failing to be resilient enough.
Failure is a stepping stone to success. People who succeeded in business openly speak about their road to success full of setbacks and what it took them to overcome them. There are some key learnings in those stories, beginning entrepreneurs could take from seasoned businessmen, to make the rough passage become a success story in the end. They might not avoid all the failures but some of them can be spared if they take time to question what they do, observe the market, experiment and collaborate with the right people. Most importantly, that they treat each of such adversities as knowledge crucial to progress.