Being an entrepreneur isn’t always as glamorous as it looks. The life of an entrepreneur can be described as a roller coaster; constantly going through ups and downs. Sometimes it goes so fast that it’s hard to think straight—other times it’s slow and dull.
Challenges aren’t surprising; it’s a rule. We have chosen this path, and we love it even though we go through temporary failures. Now, every successful entrepreneur has experienced failure at some level. In this post, I’ll share what we’ve learned from our failures so that you can be aware of them and therefore do your best to avoid them. Here are the top 9 reasons:
1. Lack of research
This was our first mistake and the reason why our first business failed—big time. Our method was to offer products that were already on the market—but for a lower price than the competitors. Sounds awesome?
In retrospect, we see that we were just guessing; cheaper must work, right? If we would’ve spent some time researching—we would have found out that when it comes to that particular product; the mind of our ideal customers thinks that cheap is crap.
Is there a market for what you want to put out there? No matter what niche you’re in—or want to get in—you’ll struggle if no one wants your product. You need to do your research!
Keep both the product and what you think will make your company unique and better in mind. Search for other people that are already in your niche—are they making any money? If so, how?
Answer the question: who’s your ideal customer? Where can you find them? One idea is to search in forums to see what they are missing. What are their problems and how can you solve them?
If you’re an innovator and have a new product—good for you. But before you put it out there you should do your research. Look up your ideal customer and ask them if they would be interested in your product. One way of asking them is to send out surveys where they can answer anonymously.
2. You listen to friends and family
“The number one reason people fail in life is because they listen to their friends, family, and neighbours.”—Napoleon Hill
I think that many successful entrepreneurs (if not all) would agree that this is one of the top reasons for failure—especially if you’re young. This is probably one of the hardest to conquer if it’s close family because their opinion usually matters.
But if you want to be a successful entrepreneur—you can’t listen to negative opinions from your friends and families. If we would’ve had listened to every advice from non-entrepreneurs—we would now be miserable at 9 to 5 jobs instead of working from home as we do today.
If they’re not where you want to be—don’t listen to their advice. These people will say that it’s risky, and they will put their doubts in your mind—don’t let them! You can spend time with them and love them—but if they don’t encourage you to go after your dreams; stop sharing your ideas with them.
You know more about entrepreneurship, business, and your niche than they do. They will say that it’s hard, but you know that it’s worth it. It is your future, and not theirs. What’s right for them isn’t necessary what’s right for you. Follow your passion and surround yourself with positive and like-minded people.
3. Over Cautiousness
In other words, fear of failure. An entrepreneur sees opportunities where others don’t. We always try to figure out how to get where we want to be. We’re willing to take risks to get there—even if it makes us feel unsafe for a while.
In my opinion, this is a great mindset to have. If you’re not a risk-taker and instead over cautious you’ll get nowhere. I can’t tell you what and how much you should put at stake because I don’t know your situation. You should take calculated risks, and if you’re not filthy rich already—you will have to make some scary decisions.
If you’ve read our story, you know that we bought a house when we stood without any income. We used up all of our savings to follow our passion which is creating freedom based businesses. We have worked harder because of the risks we’ve taken. You can’t be afraid to fail or care about looking stupid in the eyes of others. If you’re not willing to risk and sacrifice—you don’t want it bad enough.
4. Lack of money management – No budget
If you’ve read the post on budgeting your personal finances, you know the importance of proper money management. Without this skill, it’s easy to fail in business. You can’t be wasteful, and afraid to invest.
If you’re just starting out, or you’re still a small business owner—you might not have a lot of capital. I suggest that you start out small with your budget. Keep track of how much money that is coming in and what you spend—even the small amounts.
Remember to invest in your business so it can grow. But more importantly; invest in yourself! Let’s say you invest in a course that gets you one skill that eventually brings more profit. Should you buy the course? Yes.
Decide to master the art of money management and you will increase your chances of success. Don’t be overcautious when it comes to spending money in your business. For example, some tasks might be worth outsourcing. Read this article if you want more information on when to outsource.
5. Money over Value
“Try not to become a man of success, but rather try to become a man of value.”—Albert Einstein
Many people fail because they care too much about metrics, ROI and receiving money. Their focus is on taking and not giving. Business is a transaction of money and value. To stay in business long-term; focus on overdelivering.
No one will want to buy something from you if it’s nothing in it for them. If you’re thinking and acting short term, you’ll have a short term success (or none at all). There’s a limit to how many times you can sell crap for the sake of making money.
To succeed as an entrepreneur, you have to get the hang of this adding value mindset; it will become a natural part of you if you are practising it long enough. Think about how you can make the life better for your customers. How can you help? What do you have to offer that will make them want to come to you? Educate people for free. Be honest and they will trust you. Your success will come as a natural effect.
6. Lack of business mindset
This may sound contradicting after reading nr 5—but one reason for failing is that people lack a business mindset. A business minded person knows that a business need to make money.
To me, a successful entrepreneur is someone who wants to spend his day doing what he loves. He is exploring, creating and sharing. But to be able to do that full time he needs to make money.
Business owners also get bills every month. Be a man of value, but don’t be afraid to present your product or service to your ideal target. You SELLING things will help your customer BIG TIME. After all, you’re in business to make money. Otherwise, you would have opened a charity.
7. Mrs I Know It All
The one who thinks she knows it all and is a fully educated person will not go far in business. These people think there’s nothing more to learn and will fail. These people may also believe that they can do it all by themselves.
I’ve learned more about life and business in my two years in business than in all of the years I spent in school. The school didn’t teach me a thing on how to be an adult and much less on how to succeed in business.
Every person you ever meet knows something that you don’t. As an entrepreneur in business, you never stop learning, and that’s part of all the fun! If you don’t know how to do what you want to do—find someone who has the knowledge. Then ask them, read their book or go through their courses.
The successful people you admire have been where you are today—so listen and learn. Also, outsource to people who knows what you don’t instead of being stuck and stubborn. Do whatever you need to expand your mind and use your new skills to grow your business. Act!
8. Lack of persistence – Impatience
I believe that this is one of the top 3 reasons why entrepreneurs fail in business. People without patience will fail—because if they don’t see fast results—they give up. I love this quote by Thomas A. Edison “Many of life’s failures are people who did not realize how close they were to success when they gave up.”
I often think of it when I feel like giving up on a project because of challenges that come up. It takes time to build something amazing. Investing is not only money; it’s your time and effort as well. You reap what you sow.
Let’s say you open a website for your business. You decide to learn SEO to reach more people. You make all the necessary changes on your site and regularly promote it on Social Media, several times a week. You get a few visitors but nothing to show off, and no sales— NOTHING! So you give up, not only your site but your whole business and spend the rest of your days saying to your friends and family that starting a business is hard, so hard! Not being aware of that SEO is a do now-rank later process. And this is your only memory, so whenever you get a business idea, you don’t have enough belief in yourself to pursue it.
Let me just remind you; our first business failed—our second was a success. But every success I’ve experienced is a result of hard work and patience. I have experienced the feeling of not getting there and the urge to give up. But I didn’t, and you know what? It was all worth it!
9. Lack of passion – Not enough Why’s
If you have passion, you’ll most likely succeed in business. The vision that you have keeps you persistent and patient enough to work without immediate rewards. Whatever your passion is, make sure to nourish it because your passion is your purpose and that’s worth hustling for.
I can promise that you will most definitely hit a wall or two on your venture, you will think of giving up. My advice is to make sure you have easy access your Why’s before you get started so you can remind yourself of them when it’s hurting. Write them down and make as detailed as possible. Here’re some examples;
- If I don’t go after my dream, I’ll regret it later.
- I want to be my own boss and also create something bigger than myself.
- I want to contribute to the world.
I will finish with one of my favourite quotes of all time. It has been a huge part of me changing into my better self; “When life knocks you down, try to land on your back. Because if you can look up, you can get up. Let your reason get you back up.” – Les Brown
Thank you for reading. I hope you received value from this post. Feel free to drop a comment below and share your thoughts about the 9 reasons why entrepreneurs fail.