In this article, Shivam Shukla is going to share the most common reasons why entrepreneurs fail and learn how to face them so you don’t fall into the same trap. Anyone entering the business of entrepreneurship must have wondered why many entrepreneurs fail in their first years of business.
“It’s a bit presumptuous to think that this might not happen to you either, as we are all susceptible to mistakes and you, even as a new entrepreneur, are no exception. However, some people can make more mistakes than others and that is why it is always good to help, either through reading or courses, to understand why entrepreneurs fail and thus avoid mistakes” says Shivam Shukla.
There are many reasons that lead an entrepreneur to go bankrupt, and they can be varied: from the simple ones, such as lack of capital, little investment in marketing and unqualified employees, to the more complex ones, such as poor personnel management, problems in the investment sector and market variations.
However, some are common mistakes that can be easily and effortlessly corrected, as they are like banana peels that everyone slips into one day and then it takes skill to get up and win in the first few years of running your business.
Thinking That The Company’s Success Is Your Success
Everyone thinks for a moment in life that if they are unhappy at work, they are also on their personal side. It’s a common thought and generally doesn’t hurt people unless they think the problem is entirely personal and that if they don’t meet some set sales goal, they will be unhappy people.
When placing such a burden of responsibility on an enterprise, it’s common for things to go really wrong. As important as your company is, it cannot be the centre of your life and assigning such responsibility.
And even if you manage to have a big company, where does it go? Analyzing numbers and charts to see which strategy won’t work if you’re a stressed-out business owner. Ever heard stressed people are unproductive? And do you want more stress than knowing that your life is totally dependent on your business? Successful entrepreneurs know that such a process cannot happen and that is why they separate the personal from the professional side well.
The good entrepreneur knows that his performance as an entrepreneur or the failure of his own company is not a judgment on them as an individual. Failure doesn’t mean you’re a bad person, it just means you didn’t do well in a particular field of investment.
There will be other chances to start over, put together a business plan and invest in another field. Successful entrepreneurs, in contrast to those who fail, have learned to separate their roles in life without affecting their self-esteem and personality .
Entrepreneurs Fail When They Are Willing To Pay The Price Of Success
In any field of life, some sacrifices are necessary, but in everything there is a limit and sacrificing your personal side for the sake of the company is not a good choice. There is a limit between working 20 days in a row and only working a few more hours a day.
It is necessary to find the balance to have the quality of life and increase your company’s chances of success. The same rule applies to sacrifices in relation to your employees. Massive layoffs, money theft, tax fraud may seem like the best alternative at the moment, but is it really worth it in the end? There are many entrepreneurs willing to pay any price to succeed.
There is an old saying: “you are uncovering your head to cover your feet”. Quick and incorrect solutions won’t solve your business life or lower your company’s costs; it will only take one topic out of the red, but other problems will arise in scale and it may be too late to go back in a few months.
Lack Of Goals
Who doesn’t know a new entrepreneur who says he has a goal of ‘being rich’ or simply ‘career success’? Such desires can be classified as dreams and not goals. Goals are extremely important to keep a business moving and it’s no wonder that every salesperson has a monthly sales goal to achieve.
Unfortunately, not meeting targets can lead to layoffs, but this is the best way to keep your business revenue in a positive number. But it is always necessary to evaluate each case. Goals are achievable goals that you can, with effort, get there and everyone needs to have goals to move well in your new business.
Sales goals, whether providing services or selling products, are important because they are responsible for keeping finances up to date . The process is simple: you analyze how much you need to earn per month to keep your bills paid.
From there, start stipulating values for monthly sales and ways to achieve your goal. Market goals are also important, such as getting more x customers in as many months or increasing market share in your business segment.
Annual goals are a good option in the market, such as doubling the number of sales in one year, hiring five more employees in fifteen months, setting up a branch in two years, among other examples. To open a business, it is important to set goals to be achieved is a strategy followed by the great entrepreneurs who succeeded. Short-term thinking is just thinking immediately, a mistake that drives many to bankruptcy.
A common activity in a new entrepreneur, without experience and without stipulated goals, is to invest in renovations and expansions even before having the initial invested capital back. It’s a hasty attitude because this way you’ll always be in the red because you didn’t have time to recover from one expense and you’re already doing another.