Entrepreneurs who have the proper knowledge seem likely to succeed in the business world. This is at least the opinion of the majority of people. But, statistics and evidence indicate that they fail in large numbers, with an average of 50 percent. The causes for failure in business can be divided into two elements: external and internal. Internal causes refer to the reasons that lie within the thoughts and actions of the business owner and are related to their personality. External factors are the causes that exist beyond the control of the person. The management of both external and internal factors can decide the fate of any enterprise.
Let’s first look at the internal aspects and consider the reasons why they are more critical.
The reasons behind business failures:
A lot of business owners are unaware of the notion of “First things first,” which is about prioritization. They might see them as being suited to one type of company, and they may have the necessary instruments to help it successfully, including money, new technology, a new idea or a higher degree from a university,… and so on. When they are equipped with the tools they need, they become motivated to work on their idea in a way that they overlook the internal factors. They believe that what they have is sufficient. This is why they fail to decide on their priorities in the way they ought to. They can continue to succeed for a time until they end up going ultimately out of business. This pattern is becoming widespread and commonplace in a variety of industries and nations. That’s why it is essential to examine the internal causes prior to examining the external factors.
If you’re one of the people who think that the recipe for success in business is simple and all it takes is knowledge, cash, and market need (which are crucial), take a step back and think about the idea of launching GoCrossCampus. The company was founded by five founders that have raised $1.6 million and had a user base of 100,000 and hundreds of institutions taking part. The New York Times liked their idea, describing it as “may become an exciting Internet phenomenon that emerges from the laptops that college students use.” However, they failed. A founder Brad Hargreaves attributed their failure entirely to themselves. It was a classic case of having cash available and an innovative idea that could satisfy a market demand; however, it wasn’t enough. Success in business depends first on the way you think. What do you think about, and what are you believe about?
The root causes are:
1. Lack of enthusiasm for business
As per Jay Abraham, who has offered consultations to more than 10,000 customers around the world, the most crucial factor to be successful in business is to identify the type of business you are interested in. Every type of business is able to generate income. However, you should pick the one that is in line with your preferences, the one you enjoy doing every day. Warren Buffett, the legendary investor, is still working from 9-5 every day and not for the sake of money but because he enjoys his work. Bill Gates used to love his job at Microsoft to the point that he worked during weekends. It’s a good idea to start by asking yourself what type of business you would like to work in over the long term. The success of a business depends on a continuous flow of information, which requires your heart ahead of your brain. The same applies to musicians, athletes, writers… and so on. The same rule or rule for all. Engaging in business just because it’s promising, even if you don’t like it, will result in failure in the end.
2. Bad personality
Most important is to have the correct personality to be a successful businessperson. As per Dr. Clare Graves, people have distinct values systems, which translate to distinct personality types. If you are a level 5 or 7 of this system of values, then you are more likely to achieve success in the business world. If you’re at level 6, which is more toward Green Peace, you would have a different mindset than a business person. Execution is essential in business and depends on your personality of yours.
3. Mistaken assumptions about yourself:
When you’ve made a decision on the things you enjoy, and what you’d like to begin with, you must examine your beliefs about yourself. You might like it but is it right for you? Do you have the skills to do it? Are you able to comprehend it and love it? Of course, you do not comprehend or understand all the aspects of any project that you are working on; however, you can learn about any important details or information later on, but you should be able to recognize the “natural” instinct to follow this type of thing. You must be able to complete the work that is that you need to do, likely independently at the beginning. It is essential to make an assessment of your capabilities and decide whether they are appropriate for the job.
4 false beliefs about the type of business you want to start:
Picking an enterprise that you are interested in and that is within your capabilities isn’t enough. Does the company satisfy a need in the market? A few failed entrepreneurs with innovative ideas assume that their idea will succeed. One classic example is Webvan. They believed that “if you create it, the customers will follow.” Webvan invested more than $54 million and enlisted over 400 workers before they even launched one product, all with the expectation that customers would arrive later. They were able to fulfill 2000 orders per day but not enough to earn a profit from their huge investment. They were making a false assumptions regarding their business from the beginning and were unable to succeed.
5 Energy and fatigue
A lot of entrepreneurs are enthusiastic with lots of energy when they first start. However, they usually go through a period of loss, particularly when they face problems and obstacles in the market. They get tired and exhausted faster than they need to be. Stephen Covey, in his best-selling book “The Seven Habits of Highly Effective People,” which has been sold to more than 15 million people around the world, is adamant about keeping a high level of energy as a way to ensure successful outcomes. In the words of Tony Schwartz, many business executives are struggling with exhaustion and fatigue. In his piece in The Harvard Business Review, he stated that fatigue is “Your enemy.” Business fatigue is usually caused by the negative emotions that are associated with the business. According to Dale Carnegie said,” Our exhaustion is often not caused by work, but anxiety, frustration, and resentment.” Studies show that burnout is not uncommon among entrepreneurs, and they are particularly susceptible to exhaustion. The effects of fatigue can lead to business failure, as well as to self-destruction.
6. Inability to manage anxiety and stress:
Working requires a lot of energy and time. In the words of Tony Robbins, in his bestseller publication “Unlimited Power,” the inability to cope with everyday disappointments and disappointments is the primary reason for failure. The most common error made by entrepreneurs in this area is that they tend to focus all their attention on small things that can be overwhelming and stressful. They do not tend to concentrate on the bigger picture, which is the most important thing. Failure is often the result of repeated failures.