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Main Reasons Startup Founders Quit Before Finding Success
The fear of failure haunts many small business owners. Not only is the road to entrepreneurship often filled with unexpected detours and potholes, but maintaining a high level of creativity and motivation while navigating these roadblocks can be a nail-biting process.
Any successful business venture needs working capital, a sustainable business model and a good understanding of market trends. But what causes a business to fail when you are checking all of those boxes? The answer might depend on how much money your business has or how quickly you can overcome your fear of failure.
You need a lot more than a great idea to be a successful entrepreneur. Even if you have a brilliant idea for a business, your venture is likely to fail if you don’t have the resources or knowledge to execute it properly. Insufficient marketing, a lackluster business plan or even the wrong legal structure can prevent your business from thriving.
The reasons why many entrepreneurs fail early are endless, some being unique to the business owner. The key is to define what “failure” means to you and your business, according to Bill Demas, CEO of Conviva.
“At some level, almost all entrepreneurs fail,” Demas told Business News Daily. “But at the same time, there is a notion that an entrepreneur can’t fail because failure is part of the learning experience, and from those experiences, the entrepreneur builds a business with a higher likelihood of success.”
Demas said it’s better to learn from others’ failures than your own. But if you’ve already experienced a business failure, you should examine the reasons why your startup failed and apply that knowledge to your next venture.
When you’re thinking about how to start a business, one of the most important things to consider is how you will fund your startup. Without working capital, you’ll have difficulty bringing any business idea to life and meeting your overall company goals. This means finding money to start your company – such as through crowdfunding, pitching your idea to potential investors or peer-to-peer lending – and then managing cash flow properly once your business starts generating revenue.
If your startup has no money, failure is likely to be the ultimate result, said Cheryl Roberts, owner of Lexie Jordan Jewelry.
“Let’s face it – even if you started your business as a mission with no money focus, you still need money to further your mission,” she said. “So, the definition of failure as an entrepreneur is failing to make enough money to further your business.”
While generating money is an integral part of entrepreneurship, it’s not the be-all and end-all of success for business owners. Let’s say you’ve defined what failure means to your company and raised the necessary funding – what else could cause your business to fail?
Fear of failure is normal for entrepreneurs; it’s how you maintain interest in your business and motivation in the face of your fears that matters most. Entrepreneurs typically fail not because their businesses fail, but because they lose interest and give up when they don’t see the anticipated results after working for a while, according to Hassan Alnassir, founder and owner of the toy company Premium Joy.
“You need something to motivate you to keep going despite any defeat you feel inside while building your business,” Alnassir said. “A simple way to get motivated consistently and avoid failing as an entrepreneur is to keep an inspiring photo in front of you at all times while working. I personally keep a photo of my little child on the computer desk to push me forward and remain motivated while working on my business.”
We all know that entrepreneurial activity is essential for creating vibrant and sustainable communities. After all, small businesses are the economic engines that create the vast majority of all new jobs. For the aspiring entrepreneur, owning a successful business can be a path to economic empowerment and social mobility. And yet, while new business creation is on the rise, the odds of success remain remarkably low.
While most people realize the importance of resilience, many founders quit before managing to grow … [+] their idea into a real business. This article will outline the three main reasons why.
“I’m convinced that about half of what separates the successful entrepreneurs from the nonsuccessful ones is pure perseverance.” – Steve Jobs
Starting a business is a journey full of ups and downs, and it is not uncommon for founders to face numerous challenges along the way. While most people realize the importance of endurance, many founders quit before managing to grow their idea into a real business.
This article will outline the main reasons why startup founders quit so that you can plan better for your own project and how you can balance it with your life.
Starting a business is an extremely time-consuming process, and many founders struggle to balance the demands of their business with the demands of their personal lives. This can lead to burnout, and cause some founders to lose their passion for their project.
While this is more than a legitimate concern, it’s crucial to realize that you don’t need to work 16-hour work days if you can’t afford to.
While there is a strong correlation between hours worked by a founder and the revenue growth of their startup, almost half of the respondents of a study of SAAS startup founders worked part-time on their projects.
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Most people relate startups to an extreme pace and intensity. While it is true that a lot of projects run a race against time, especially if they are burning through their capital or if competitors are out-competing them, in the early startup stages when you don’t have a serious burn-through rate you can afford to work at your own pace. If you are consistent for long enough, this could still lead to something significant.
As a startup founder, it is fairly likely that you are highly employable. This means that for you, working on your startup constitutes a high opportunity cost. In other words – instead of earning a good salary from a corporate job, you are likely investing your time in a project which in the early stages wouldn’t pay that well if it pays at all.
To make matters worse, a startup project is something you can easily sink your personal finance into.
Naturally, not all people are in a position to do that and often stop working on their projects in order to find a job that pays better and allows them to feed their families.
The argument from above is applicable here – even if you have a full-time job, consistently investing a small amount of time into your early-stage project could pay dividends. If you are able to get some traction from these efforts, in time you might be able to find investors that would allow you to focus on your project full-time without sacrificing the financial health of your family.
Last but not least, starting a business is a high-stress environment for many reasons, and founders struggle to manage the mental toll that this stress takes on them.
Entrepreneurs are 50% more likely than the general population to report having mental health issues like anxiety and depression, according to research by NHS England. In light of this, it’s not a surprise that some founders quit with the goal to improve their quality of life.
Of course, if you feel you are struggling mentally then you should definitely do something about it – ignoring your mental health for the sake of your project would hurt both you and your project.
Perseverance is crucial for startup success, but perseverance doesn’t mean repeating something that doesn’t work. Perseverance in a startup context means being smart and finding the best possible solution that allows you to push your project forward without leading to professional, financial, or mental ruin.
Start with why.
Too often, aspiring entrepreneurs fail because they set out to solve a problem for themselves rather than for others. They see owning a business as a way to make money, to escape the rat race or to follow their passion. And by doing so, they overlook the first principle of entrepreneurship: By solving problems for others, we empower ourselves.
This is not to say that good ideas can’t be found by scratching our own itch. In fact, many successful businesses arise from doing just that. Yet, what so many aspiring entrepreneurs and small business owners fail to realize is that it is the self-oriented nature of their why that undermines their ability to succeed.
To your success
Andries van Tonder
Fulltime Internet Entrepreneur & Investor since 2013
40 years self employed
Connect for me on Facebook, Webtalk, Twitter, Instagram & Markethive
