If you believe internet articles, 50% to 90% of new businesses fail in the first few years. With such bad odds, why would entrepreneurs start anything? What kind of deluded nut hangs his shingle and declares that he has a chance to make it?
I dislike this stat. Not because it makes me feel like a deluded nut, but because it hides a wealth of information that could help entrepreneurs understand the real risks facing them. These businesses fail for a variety of reasons:
- False start- The business was ill-conceived at the wrong time and never actually got up and running before the founder quit.
- No Experience– This is they guy who dreams of owning a bar because he likes drinking… not because he knows anything about the complexities of the restaurant or tavern business. He does no research, buys the wrong place in the wrong location and doesn’t know how to find customers. He grows drunk and bitter as his dream dissolves in debt.
- Bad Luck- Sometimes life happens to the fledgling business: divorce, death, illness, accidents, etc..
- Choosing an Unprofitable Business– such as your hobby of making crafts from toe-nail clippings.
- Pricing Products too Low- People often undervalue what they produce and end up working them selves ragged without making enough money to survive.
- Poor Management or Lack of Financing- Have you ever seen the film about the great, New York punk-rock club: CBGB? The owner was a mess as a business man. He couldn’t do simple bookkeeping, didn’t know where the money went, and even though he ran a national treasure of music that launched the careers of the Talking Heads, the Police, the Ramones, and Blondie, he nearly went out of business every day.
- Inability to Focus on Core Business- This is the one I have to look out for. I am interested in so many things that I struggle to keep it simple. You should have seen the list of things I wanted to offer before I whittled them down. “I could do that… and that… and…” That is the road to crazy-town.
- Unwillingness to Ask for Help– I have to watch out for this one, too. I’m fiercely independent. I’m that guy who uses an old-fashioned paper map when travelling. “No, I don’t need to ask directions. I think it’s this way!”
I wonder what the odds of starting a successful business are when you control for the factors listed above? What if the entrepreneur understands the market, has done the research, and has worked on the business model a long time? And what about entrepreneurs like me, who like to build things slowly?
Whatever the odds, I know that I have to try.
I founded ScribbleFire on the premise that we all have fear that holds us back. When we approach the world with compassion and a sense of curiosity and collaboration we can achieve great things. By examining our stories, individuals and companies can reinvent themselves to be more successful in a variety of venues: work, school, personal life, and relationships. We offer products and services that will help our clients to find and experience happiness.
My oldest daughter, Savannah, inspired me to create ScribbleFire. She had significant, multiple disabilities, yet she faced every day with courage. I wish to follow her example and dare to enjoy every moment, laugh loudly, and love unconditionally.
After Savannah died unexpectedly, just weeks shy of her 16th birthday, I realized that the company shouldn’t just remain a dream. I should face my own fears and take the risk.
I have my youngest daughter to thank for encouraging me with her enthusiasm and excitement about art and writing. In addition, I’d like to thank my wife, Tamara, for believing in the vision and giving me the space and understanding to realize my dream.
Do you dream of joining the world of entrepreneurs? Do people think you’re a nut for wanting to dare to do something differently?