Entrepreneurs are cut from a different cloth.
They harbor a level of wild-eyed focus that most others couldn’t imagine. Their minds are replete with optimism and largely devoid of the fear that holds others back from taking the giant and oftentimes frightening leaps forward into the business world.
Yet, according to Forbes, 8 out of 10 of all businesses fail within the first 18 months.
That’s a grim statistic. Enough to make most would-be business owners run for the ropes, in fact. However, for one reason or another, that doesn’t detract the large majority of individuals who rush headfirst into entrepreneurship, and the resultant economic upheaval, with the enthusiasm and zeal of a kid in a candy store.
It’s clear that the potential pleasure of succeeding as an entrepreneur far outweighs the probability of failure that plagues most flagging business owner who, for one reason or another, call it quits, throwing in that proverbial towel.
In business, it’s hard to keep your head up when all you can see around you are problems. When you can’t afford to pay your bills because you decided to go into business for yourself, lacking that general safety net that tends to keep salaried employees tied by the neck to their bill-paying jobs, it can be frightening to say the least.
While some entrepreneurs might last 18 months, others can’t seem to make it past a year or even 6 months. The financial, emotional, mental, and subsequent spiritual drain can be enough to send even the most astute individuals running for the ropes.
They call it quits, silently uttering words like, “I give up,” “I can’t do this,” and “Never again.” While the straw that breaks the proverbial camel’s back might be different for each person, there’s clearly a resounding theme of failure in the business world.
Yet, not one of us can live a life completely devoid of failure. In fact, failure is a must-have for people who want to achieve long-term success at any notable level. Why? Because failure is a stepping-stone — it’s a platform for improvement and growth. It’s a way we can help see the forest through the trees, even if we get a little lost in the moment.
However, when you really look at business and the things that make the biggest difference between those who make it and those who don’t, it really boils down to three particular reasons why most of the 8 out of 10 entrepreneurs fail.
Do your best to avoid these three crucial pitfalls, and you’ll set yourself up for a long-term win. Ignore them, and you might just turn into another statistic.
#1 — Planning
Running a startup or any other type of business is hard. We all know that. As a serial entrepreneur myself, I can tell you firsthand of what a seemingly insurmountable obstacle it can be at times to achieve business success. With so many responsibilities at once, how are you supposed to keep your head above water?
Running a business isn’t just about working in your business, it’s about working on your business. But when you’re dealing with the stresses of trying to market, do sales, customer service, accounting, taxes, and payroll, how are you ever supposed to work on your business?
The first thing that will set the successful entrepreneurs apart from the failures is their ability to plan. Failure to plan will almost always result in a failed business. But, when planning becomes a priority, and your steps towards goal achievement are mapped out, success is far more in your reach.
Imagine this for a moment if you will. An airplane takes off from London’s Heathrow Airport, heading over the Atlantic towards’s New York’s JFK International Airport. That airplane has a goal — its goal is to land at JFK International Airport at a predetermined time on a predetermined day.
In order for the plane to achieve its goal, it needs to create and follow a plan. The plane’s plan is called its flight plan, which has a flight path, an average speed, an average altitude, and a general direction of travel. It knows that it needs to leave London at a specific time if it’s going to arrive in New York at the estimated arrival time.
Now, imagine for a moment if the plane had no plan. A goal without a plan is merely a wish. It’s a hope that things might pan out. Could you imagine for a moment if the plane had no clue how it was going to arrive at its goal? No, you couldn’t imagine it, could you? And if you could, then it’s a cold stark world that we’re living in.
But in all seriousness, entrepreneurship and goal achievement is very much founded and based on the execution of a well-though-out plan. Yet, what happens when things don’t go according to plan? What happens when the plane runs into turbulence or air traffic congestion, for example? Does the plane just give up and turn back around? Of course not.
A plane that runs into problems along its flight path simply makes adjustments to the plan. It can do this by constantly analyzing where it is on a moment-to-moment basis. These analytics allow the plane to execute its plan by knowing where it’s been, where it is, and where it’s going. Otherwise, how could the plane ever properly execute its plan?
Similar to the plane, entrepreneurs need to have a solid plan in place. They don’t need to know where they have to be every single step of the way. They do, however, need to know the general direction of travel and what they’re going to do along the way. When things don’t go according to the plan, they have to make adjustments.
If you don’t want to fail in business, then you need a plan. If you fail to plan, you will fail. It might not happen overnight, nor in a few months, but over time, failure is imminent. So create a plan. Sweat the details or the details will sweat you.
#2 — Time Management
The second reason why most entrepreneurs fail is the lack of effective time management skills. The biggest thing about time is that it’s life’s greatest equalizer. We all have the same amount of time in the world. Not one person has more time than the other person no matter how much money they have, what they do for a living, or where they live.
We all just have 24 hours in a day or 1,440 minutes. Each one of those minutes are precious. They should be treated with respect. If we choose to waste the time that we have, then we’re the only ones who can be held responsible. The problem? The seemingly never-ending days of an entrepreneur can take its toll on the body, mind, and the spirit.
No one in their right mind wants to work all the time. But as an entrepreneur, sometimes you have no choice. You need to batten down the hatches and just grind. It isn’t about going out and partying or celebrating when there’s plenty of work to do. It involves buckling down, not procrastinating, and taking massive and consistent action.
However, sometimes, you just need to have an effective system for managing your time. There are several out there. The best one that I would recommend is the quadrant time management system, originally known as the matrix system created by the late President Dwight D. Eisenhower, also coined the Eisenhower Matrix.
It was later popularized by Stephen R. Covey in his celebrated book, The 7 Habits of Highly Effective People. If you haven’t read it yet, I would certainly recommend that you get out there and do so. In the book, Covey talks about the quadrant system, which is broken down into four separate parts or components, also known as quadrants.
Everything you do within the quadrant system is judged based on two factors: urgency and importance. Things are either urgent and important, neither, or just one or the other. Each one of these is assigned a quadrant number. Quadrant 2 is dedicated to the not-urgent-but-important activities, which relates to our long-term goals.
The point is to live in Quadrant 2 as much as possible. But the reality is that too many people live in Quadrant 4, which are the not-urgent-and-not-important activities, also known as time-wasters. Whether it’s overly-socializing, drinking in excess, going out on the town, binge watching television, overindulging in social media, or what have you, this is a very dangerous quadrant.
Truth be told, too many people, entrepreneurs included, spend way too much time in Quadrant 4 and not enough time in Quadrant 2. Don’t make that mistake. Time is a precious commodity. Use it very wisely. If you want to read more about time management, check out my post here.
#3 — Persistence
The third reason why most entrepreneurs fail is due to a lack of persistence. It’s hard running a business. Very hard. At times, you want to scream at the top of your lungs and rip your hair out at the same time. And one of the reasons why 8 out 10 businesses fail in the first 18 months is due to a lack of persistence.
Of course, the other two factors come into play, but it all really boils down to persistence. You never actually know how close you were to success before you gave up. You could have been just right there. But if you throw in that towel and give up, how would you ever know how close or far away you were?
Yet, this also boils down to a level of commitment. How committed are you to achieving your goals and what are your fundamental reasons why you must succeed in the first place? When the reasons are deep-rooted reasons rather than superficial ones, we usually end up pushing through. There’s a bigger picture that we’re working towards that supersedes things like money.
When your reasons outweigh your excuses, in that they are profound and deep-rooted reasons like family, security, freedom, and country, then you’ll always stay persistent. You have to search for those reasons if you’re going to truly succeed at business.
There’s a famous story about a general that always comes to mind when I think about persistence. The general landed his battalion on the shores of a foreign country prepared to go to battle. Once all the soldiers disembarked, he had them line the beach by the thousands to begin a speech that would prepare them for battle.
However, what the soldiers didn’t realize was that as the general was speaking, he had sent dozens of his lieutenants to burn those same ships that brought them there. The enemy they were about to face outnumbered them 5 to 1 and he knew that if the soldiers thought they could retreat and head back to the ships, they would never win.
Once the soldiers realized what the general was doing, they were outraged. But he continued on with his speech. He told them that the only way to get back home to their families was straight through. If they failed, they would never see their loved ones again. This invoked a sense of determined spirit that hadn’t existed before.
The army won that war and the general was hailed as a hero. But it would have never happened if he hadn’t burned those ships. He gave them no choice for retreat. Similarly, in business, you have to burn the ships. You can’t think about going back to a life-sucking 9-to-5 job. Make it so that there’s no option for retreat.
When your back is up against the wall, you’ll be surprised at just what you can achieve and accomplish because you have no choice. There are no excuses you can give to yourself. You have to do it or suffer a life that’s devoid of any joy or happiness whatsoever. If you can master the art of persistence, then you can master entrepreneurship.
The simple fact remains that you have to remind yourself why you’re doing what you’re doing. You need a greater reason for it. The soldiers’ reasons instantly transformed once those ships were burned. If they didn’t succeed, they would never see their families again. That transformative shift created a very compelling reason that made it so they absolutely had to succeed.
So, if you don’t want to be plagued by one of these three reasons for failing as an entrepreneur, stay organized, by constantly planning, make sure you effectively manage your time, and burn the ships by being persistent. Don’t give yourself an out, so to speak. There is no going back. The only way forward, is to march right though it.