Blog | Entrepreneurship

Why Do Entrepreneurs Fail?

There is nothing special about being an entrepreneur. But to be successful, there are a few characteristics that need to be established.

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Summary

  • Becoming an entrepreneur means pushing through your fears and doubts

  • Use the right knowledge to your advantage; throw the rest away

  • Failure is a necessary step on the path to success


Don’t let fear get in the way

According to The Washington Post, in 2021, over 4 million Americans quit their jobs with the omicron wave of COVID-19. Eventually dubbed “The Great Resignation,” the sudden churn in the U.S. labor market wasn’t just the result of an economical hit, but instead, workers changing the dynamic of their employment and seeking opportunities they likely would have never pursued otherwise.

Not surprisingly, it’s estimated by Salesforce that nearly the exact number of Americans (4.4 million), started their own businesses during the pandemic, as well.

These numbers are significant because it represents the leap that people took in an effort to become rich. It used to be just a noble dream that people never acted on.

This was the literal example of not letting fear get in the way; COVID-19 was the most unprecedented event our generation had ever experienced. By all accounts, it was the most fear and pandemonium we had seen in a long time; and yet, despite the global fear, entrepreneurs thrived.

Why smart people fail

But why do entrepreneurs still fail at their dream of being successful? The answer is simple: Entrepreneurs have two characteristics…ignorance and courage.

When we say “ignorance” is key to entrepreneurship, we’re not suggesting the importance of being an idiot. Rather, we’re saying don’t let what unproductive knowledge you may have, hold you back. For instance, kids are prone to saying they want to be things like an astronaut, a pro baseball player, or the President. They lack the knowledge to know how hard it is to achieve those dreams, so they don't limit them. They are ignorant in the best possible way. They still dream and believe they can achieve those dreams.

The best entrepreneurs are willfully ignorant. When they have a dream, they pursue it with passion. When others tell them it can’t be done, they ignore that noise and push forward. When their own mind tells them to quit, they ignore their negative thoughts and press on.

The reality is that many entrepreneurs are very smart and have a lot of knowledge, but they don’t let that knowledge discourage them. They have the courage to overcome the fear that knowledge can bring.

For example, Lendingtree finds that almost 50 percent of all businesses falter in the first five years. But entrepreneurs don’t pay attention to statistics like that because in the real world, courage is more important than knowledge. Ignoring negative thoughts is key to having courage. Always remember, your mind is infinite and your doubts are limiting.

Mastering the self

The problem for most business-owners, however, is not becoming an entrepreneur, but moving past being self-employed.

Every entrepreneur has to start somewhere. Even Robert Kiyosaki started by being self-employed. But he quickly learned that if he wanted to truly grow himself and his business, something had to change.

To go from being by himself, to having hundreds of employees, he had to develop different skills.

The skill of selling

First, he had to learn how to sell better. He knew that if he learned how to sell, he could learn the skills he needed to grow his business revenue.

In order to hone this skill, he took a job with Xerox, which forced him to grow as a salesperson or get fired. He didn't take the job to climb the corporate ladder. He worked to learn. Robert also took the time to volunteer for a local charity, making cold calls to raise money. He hated it, but he knew he needed it. His ability to sell today is a direct result of those investments in himself as a young man.

The skill of leading

Second, he knew that once he grew his company, he’d have to hire employees. It’s hard enough to manage yourself, let alone others. One of the hardest growth periods for an entrepreneur is learning how to lead, manage, and multiply other people. Once you master this skill, however, you can grow exponentially.

The trap many entrepreneurs fall into is thinking they are the expert on everything and that they have to do everything. They do not trust others with their business. The truth is that you are probably not an expert at all, and you can’t possibly do everything.

More than likely, you have one or two skills you excel in and that you should be focusing on. Building a team of experts is how a true entrepreneur grows his or herself and the business. Having a staff you can trust and that are bought into what you are doing allows them to work in your business as you work on your business. As rich dad said, “Business and investing are team sports.”

Fortunately for Robert, his rich dad invested in him, teaching him many important leadership lessons. This convinced Robert of the importance of having a mentor and a coach.

The skill of self-mastery

But the most important skill Robert had to learn was self-mastery.

Self-mastery means learning how to control your fear, emotions, doubts, body, mind, and soul. If you can learn how to master these things—to control yourself—you can control the world.

Every time Robert lost his temper with an employee, he lost. Every time he let fear set in when his cash flow statement didn’t look promising, he lost. Every time he got into the downward spiral of working in his business rather than on it, he lost.

Most entrepreneurs have certain triggers that cause them to literally lose it, that “it” being self-control. For many, it’s money. When the money runs out, the fear kicks in and the limbic part of the brain takes over. Then they do insane things. It’s no different than the caveman running for his life from the saber-toothed tiger. You stop thinking and become reactionary.

But we’re made up of body, mind, emotions, and spirit. Taking the time to feed these parts of us helps to develop this most valuable skill.

Have the courage to fail

At the end of the day, an entrepreneur’s most courageous act is to embrace failure. Through failure, an entrepreneur learns the most valuable lessons about business and life. They understand and embrace the fact that you cannot be successful without failure.

If you want to be an entrepreneur, you must have the courage to fail. You need to be brave enough to move forward despite knowing you don't know everything, ignore what needs to be ignored, and have the tenacity to push forward despite all odds.

You need to develop your skill set, master yourself, and then act.

If you fail, learn. Take it as an opportunity to increase your financial education and intelligence. If you succeed, relish your success. You can only know the sweet taste of victory after many bitter struggles.

What’s holding you back?

To increase your financial IQ, check out our free, financial education community here.

Original publish date: August 07, 2012

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