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4 Reasons Entrepreneurs Fail and How You Can Avoid Them

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4 Reasons Entrepreneurs Fail and How You Can Avoid Them

So you know you want to go the route of the entrepreneur, blaze a trail and help people along the way. But how? You’ve heard the often quoted stat that 90% of all new businesses fail within the first five years. But what causes these failures? If you know what to expect then you can plan how to steer clear.

Here are four reasons entrepreneurs fail and how to avoid them:

1. Trying to do it alone

The story of the lone individual, working tirelessly in a garage (or at a laptop) and becoming a self-made millionaire is just that, a story. No one makes it alone. According to multimillionaire entrepreneur Jordan Harbinger,The best people in any field always get coaching.

You need a coach. It’s possible you have a mentor at this point. A mentor is often someone from your recent past, such as a college professor, manager from a job you’ve had or a friend who is a little further along the life journey than you. are A mentor offers free advice, allows you to bounce ideas back and forth and encourages you. Mentors are people of value in your life. But a mentor is very different from a coach.

You pay a coach for their expertise. Generally a coaching relationship is for a specific number of sessions over a defined period of time, along with some communication between sessions. Although a coach will encourage you, that’s not the primary focus. A coach looks at where you are, helps you discover where you want to be and walks you through the process to get there. The best coaches give you very practical steps to reach your goals, then hold you accountable for taking those steps. Your coach will push you further and faster than you thought possible. They will do more for you than any mentor because, in part, the success of the coach is dependent on a satisfied client. Clients who succeed with the help of a coach are exceedingly happy.

“Sometimes you have to do what you don’t like to get where you want to be.” –Tori Amos

2. Quitting instead of pivoting

Let’s make this very simple. Most new businesses don’t fail due to lack of cash, a poor market or a bad location. Most new businesses fail because the owner decides to quit, when what they should do is pivot. There was a time, not that long ago, that Apple was about to go bankrupt. The company had been losing money for a dozen straight years and poured over $100 million dollars into a failing product, the Apple Newton. By early 1997, Apple was in serious trouble. Had Apple stayed on the same path they would have faded into oblivion.

But that didn’t happen. Today Apple is worth over $700 billion. Why? Because Apple pivoted. They hired back one of the original founders (Steve Jobs) who cut the Newton immediately, made a deal with the previous enemy (Microsoft) and reinvented both the categories of portable music players and cell phones (with the iPod and iPhone). Many other amazing devices followed.

When you are in the midst of what you think is the end, it’s probably not. It may be the end for a particular idea, method or product, but it’s only the end for your business if you quit. Entrepreneurs who succeed know when to pivot.

 

3. Expecting they’ll love everything about being an entrepreneur

Most entrepreneurs are excited about the idea of working for themselves. They assume that every hour of every day will be filled doing creative and fulfilling work. When that’s not the case they often stop trying and look for the thing that will allow them to have every day and hour filled with creative work. The process repeats itself over and over. It’s a futile pursuit.

The good news is that many hours will be filled with doing creative and fulfilling work. The bad news is there are things you’ll still have to do that you don’t love. Successful entrepreneur and New York Times best-selling author Jon Acuff recommends every budding business owner create a “grit list”. These are the 10 things you absolutely despise doing, but must be done anyway.

I won’t belabor this point. Just know that while building your business you still have to do some things you don’t enjoy. Create your grit list of these things – then next to each one write down the value they bring to your business.

 Why do I have to fill out an expense report? That’s not my dream. You have to fill out an expense report because expense reports must be filled out.” – Jon Acuff

4. Not having a plan

You need a plan for your business. Not a 10 year all-encompassing plan. Those never work out. A plan for the next year. Perhaps as long as 3 years. The plan should have goals and action steps. It’s as simple as that. Then write it down. Your odds of accomplishing the goals on your plan go way up if you write it down.

On a personal level I had a recent business that was failing. Do you know what I did? Hired a coach, created a plan, pivoted when my coach suggested it and did what needed to be done. Did it work? Yes. If not you wouldn’t be reading this article.

 

Creating a successful business has no secrets. It’s really not about avoiding the wrong things, it’s about doing the right things. If you’ll hire a coach, pivot when necessary, know that some things just must be done and have a good plan then you’ll find yourself in that small group of new businesses that have wild success!

Which one of these four things do you need to implement into your business strategy to help your business?

I help people develop amazing relationships and love what they do every day. I'm a writer, speaker and coach and you can read my articles on great sites such as the Huffington Post, Addicted2Success, the Good Men Project and Lifehack. Happiness in life and passion in your work are my goals. Meet me at TroyStoneking.com and Troy Stoneking on Facebook.

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9 Comments

9 Comments

  1. Awais Afzal

    Jul 18, 2018 at 8:14 am

    Everyone fails at first glance. But sometimes we need someone who can really help us and teach us where we actually made mistakes. The young entrepreneur should always pay attention to another successful entrepreneur as how they manage their things and takes a decision. But it comes gradually. So a one should always have some patience.

  2. Hunter

    Mar 2, 2016 at 2:40 am

    I feel that I have been guilty of doing all of these things. I think that the hardest part of letting people in is being afraid that they will not understand my thought process or plan. With that comes the fear that they may try to convince me to change my idea or to do it a different way. The worst case possibility is if they try to explain that the idea or concept will not work at all. Pivoting instead of quitting applies to all aspects of our life. It’s like doing homework. If I can’t find the answer in my textbook, I can either give up or I can seek it elsewhere or ask for help.

    I feel that the last two go together. An important part of the plan that most people overlook is how they will deal with the aspects of entrepreneurship that they don’t like or can’t cope with. Entrepreneurship comes with the intended difficulties and long hours, but many people don’t consider the emotionally stressful and taxing side of it.

    This was a good reading and a great thought provoker. I enjoyed the read and look forward to more. Thank you for sharing.

  3. Stephen Osoko

    Dec 28, 2015 at 4:48 pm

    Awesome post. Trying to do it all alone was definately something I felt was the way to success in my early days however I’ve learned that you need some help along the way, be it from mentors, fellow entrepreneurs etc.Once again, great post!

  4. Robb Gorringe

    Nov 26, 2015 at 12:17 am

    Hi Troy,

    I like your recommendation of the “grit list”. It’s so true. There’s just some things that you’ve got to do.

    I also enjoyed what you said about having a plan, but making sure its not too far out ahead. 1-3 years is best. I tend to agree. Sometimes our goals are so “dreamy” that they’re as unreachable as outer space.

    Great article,

    Robb

    • Troy Stoneking

      Nov 29, 2015 at 11:00 pm

      Thank you Robb. Man, those “long term” plans are just WAY too far out for me…and I suspect most other people as well. I appreciate your kind comments!

  5. Shaf

    Nov 25, 2015 at 2:04 pm

    You know I generally renegade online article advice on success and development as rehashed politically correct content that provides zero value – because most of the Internet is like that. I thought the same about this site when I saw feeds on Facebook. Today I read through some articles like this one and have to say this site is different. You did hit on finer points that makes a difference on the path to building a business… and also in many aspects of life

    • Troy Stoneking

      Nov 29, 2015 at 11:04 pm

      Thank you Shaf. I do my best when I write, speak, consult and coach to make things as practical and concrete as possible. If it’s not actionable it’s not worth sharing.

  6. Addicted 2 The Grind

    Nov 23, 2015 at 2:57 pm

    Often times people fail because they are not willing to put in the work. If you work hard and smart you should see results. (#2 ^ ) Most people do quit to early because they don’t see the results fast enough. You have to be patient and put it the work. Great Post

    • Troy Stoneking

      Nov 29, 2015 at 11:01 pm

      You nailed it. I’ve been guilty of slacking off myself…more times than I care to admit! We have push through. Thanks for the great input!!

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