Mindset #13 - 3 Reasons that Entrepreneurs Fail
Entrepreneur: "A person who sets up a business or businesses, taking on financial risks in the hope of profit."
Traders are the definition of entrepreneurs. There is no inventory or customers to worry about, just financial risk for profit. They are entrepreneurs at the most fundamental level. While I'm currently in the midst of branching out into the world of education and marketing, it is the concepts that I've learned in trading that I endlessly draw on and are what I see value in sharing with the community.
Now, while nobody wants to talk about it, failure is a fundamental part of entrepreneurship. There were some stats I saw bandied around on social media today that said less than 50% of new entrepreneurial businesses survive even the first 5 years. Then move forward to the next 5 years after that and you have 75% having failed! While this sounds like an absolutely ridiculous number, it is the reality of real life.
Those stats are actually good when you compare it to forex trading. The buzz number in trading circles is that 90% of new forex traders lose money. But I can tell you right now that from my forex broker industry experience, that number is VERY generous. It is higher. A lot higher.
But while failure rates are high, you can avoid joining the herd if you take lessons from not only your own failures, but also from those around you. After all, failure is just another lesson on the long road toward success!
This blog post is just a tiny snippet, but pulling from my own experience and the experience of some wonderful entrepreneurs that I've built relationships with through social media, I've focused on what I see as some of the most important reasons below.
1. Thinking too small
I know a lot of my readers, especially those on Twitter, have not taken the plunge into entrepreneurship just yet but are setting themselves up for it soon.
"Soon... soon... soon..."
FUCKING SOON!
You're probably sitting at your desk, staring across an open floor planned office at the rest of the rats stuck in the corporate wheel and are for some reason jealous of the guy in the corner stall on $20k a year more than you. This is small time thinking. Like 20k fucking matters in the grand scheme of things!
If you're on a salary now, then you'll be on a salary forever. It's not a cycle that you can break by remaining in your current job because you lose the most important asset by getting up, commuting to your box and slaving to make someone else rich for peanuts. That asset is TIME.
If you're going to be able to achieve anything on your own, then you're going to need time.
Something I hear all the time is this:
"But I need to survive in the meantime..."
10 years later and yep, they're surviving on the surface but slipping that little bit closer to death each day while doing nothing to make their dreams a reality.
Don't set goals in terms of a salary, think BIG! Find a way to make the change right now. There is always a way.
2. Focusing on things that don't matter
A lack of focus on what you have to do hurts new businesses from the very beginning. Newly formed businesses, no matter what they are, simply must have clearly defined goals. A lack of vision can be truly devastating and must be addressed if you're going to move forward at all, let alone succeed long term.
The amount of people I have spoken to that come to me with messages or conversation that go like the following, is ridiculous:
"Bro, tell me how I can make easy money. I don't have any time, I just need money."
(Read it again in a surfy/hippy voice and tone for the best effects. That's how I read them anyway!)
Honestly though, I think people are just inherently lazy. Their focus is solely on getting paid rather than achieving what will actually be the thing that gets them paid. Talk about putting the cart before the horse!
If you've sent me messages like that and I've been a prick to you from the start, I don't even apologise. You need to hear the hard truths and when you grow as a person and start to focus on what matters, then we'll have that humbling follow up conversation. I look forward to it!
In the meantime, change your focus to the things that really matter or you're going to fail before you even begin.
3. Not taking the right type of risks
Risk is good!
If my trading background has taught me anything, it's exactly that. But so many entrepreneurial failures come from people taking the wrong types of risks at the wrong times.
So what constitutes a good risk in business? A good risk would be anything where the reward far outweighs the potential loss. Once again, trading and its bare bones focus entirely on money does this better than anything I've ever had explained to me in conversation.
Every trade can be run through a risk:reward ratio to determine if it is worth taking or not. Failure is inevitable, but you want to keep your failures to a minimum and make sure that when you're hitting goals, they are moving your business forward at a much faster rate as the negatives are dragging it back. If you keep your risk:reward ratio high, then risk is no longer a negative.
It's actually funny how much I now consider my entire life in terms of risk:reward ratios. My brain has been so wired to think this way that I almost feel I'm becoming less human as a result...
Anyway, that's probably one for my shrink when I finally have my mid life crisis, rather than an entrepreneurial focused mindset Steemit blog haha!
To repeat again, keep your business moving forward at a much faster rate as the negatives are dragging it back. Run a number of negative risk:reward scenarios and you're just setting yourself up for failure.
Don't.
I'd love to have some of you guys add some reasons from failures that you've experienced in your entrepreneurial life that we could discuss, so please don't be shy and leave a comment.
Yes, comment upvotes are on offer for conversation starters!
Peace.
The @forexbrokr Mindset Series
Mindset #8 - Monday Morning Motivation
Mindset #9 - Home Truths That Might Require a Rethink to Make More Money
Mindset #10 - This is Real Life. Trading is Just a Facilitator
Mindset #11 - Do you Write Lists? How OCD are you?
Mindset #12 - The Evolution of an Entrepreneurial Idea</
Instagram: @forexbrokr
Website: www.forexbrokr.com
Financial indiscipline is another strong reason why entrepreneurs fail in business.
Not knowing, or caring enough how to control cash inflow and outflow leads to the ruin of many businesses even before they set sail.
Excellent point abasinkanga!
I'll definitely add it to my notes.
I think in modern times, the term "entrepreneur" has been glamorized. Too many so called gurus out there making it seem like there is a magical formula that anyone can follow to achieve riches. The people pay for the formula and realize that they have to work hard and it's not easy. Therefore making them turn away from entrepreneurship and quitting altogether.