I've seen companies succeed and I've seen companies fail. In fact, I've been part of companies that were able to sustain steady growth and still thrive today while others collided as soon as they took off. One company, in particular, that comes to mind never should have failed, but it did. It's also the reason I transitioned out of engineering and got into entrepreneurial coaching in the first place.
Their cause of failure was caused by relationship strive and power struggles (see my book at Ten Keys To Power Struggles if you or anyone you know is experiencing this problem). Yet, this post is entitled the biggest reason entrepreneurs fail and although I believed at one time that businesses failed because of problematic human interactions, I've now come to realize that there's an even lower common denominator than that - and it's something most business experts have missed.
Take a moment and think about what you've heard, read, or experienced as the leading cause of business failure.
Are you listing them?
Let's see if any of these are on the list:
Did you come up with inadequate or lack of planning?
How about marketing?
Did you say stupidity? (Well, surely you've had that sentiment from time to time.)
Okay, what about not having enough capital?
Or, as my previous experience revealed, how about relationship challenges (this can include battling with a partner, investor, staff, or just plain overlooking the customer's needs).
According to entrepreneurship author and Case Western University professor Scott Shane, there's even the possibility that failure is a measure of a good economy if your venture folded. He purports, "Having fewer entrepreneurs means that we are experiencing economic growth. The more developed a country is, the fewer people work for themselves."
This post isn't about telling you to go work for a high growth company. (Although it's cool if you do.) This is about providing support and insight so that you can make your entrepreneurial venture succeed - and maybe even turn it into one of those high growth companies that Shane says is good for our GDP. If that interests you, then please read on.
I listed some of the common reasons people say that businesses fail. There's a lot of research out there that provide reasons and many of the stats contradict other researchers' findings. There's also the discussion about teasing out superfluous data and accounting for confounding variables, etc. However, What I've found to be at the core of most of my client's issues is this one basic human flaw that undermines even our best intentions.
This flaw explains why smokers can't seem to quit even when the doctor says it's going to kill them and they desperately desire to quit.
It also accounts for the billions of dollars that are spent on gym memberships, self-help programs, and other health and wellness miracles that end up unused and untried as soon as the commitment was made.
I believe this flaw translates into business start-ups and reveals why most business fail (8 out of 10) within the first year (64% by the fifth year).
This flaw, while seemingly simple, is the disease responsible for ruining your best intentions. It's why you can't focus - and, unfortunately, it's worsened with the advent of video games, microwave ovens, and microblogging sites like Twitter.
It's not ADD or ADHD, but it is this distracter gene's ancestor and it resides in ALL of us.
It's our primal reptilian brain that causes us to be so immediate focused that it takes us right off track from our original agenda. It's the source of procrastination. It's the source of emotional hijacking. It's why the best-laid plans go awry.
The primal reptilian brain feeds off of distraction, drama, and holds tight to emotional traumatic triggers that transform wisdom and grace into momentary flights of rage and despair.
The good news is that the primal reptilian brain can be your best ally. You just need to learn how to harness your inner power and make your primal brain work for you rather than against you.
For instance, let's say you want to make X number of marketing calls a week, but you never seem to get it done. Basically you keep finding yourself procrastinating. You might loathe the task. Maybe you have some fear of failure or rejection. You could even have fear of success. Or you get distracted with all of your other responsibilities. Whatever the reason may be, your primal brain is working against you if you're not making the calls - and it's feeding off the energy from the fear, loathing and/or distractions.
The trick to making your primal brain assist you in making those marketing calls can be two-fold. You can employ that good old-fashioned work ethic that says you have to make X number of calls a day before you can relax or have some type of reward. Secondly, you can also up the ante by offering a penalty payment to your assistant, colleague, mentor, or a family member each time you don't make the required calls that week. However, in order for this last part of the trick to work, it needs to be realistic but painful enough to make you miss the money that was doled out as your penalty payment.
This last tricks works because it makes your primal brain want to protect you from the pain of the money loss. Before that, your primal brain sensed the pain from the fear and loathing and worked hard to keep you off your task no matter how much you tried to motivate or convince yourself.
Did you get that? Your primal brain is motivated to protect you and any sign of fear of loathing activates your primal brain, causing it to rescue you from the source of your pain.
Now think about what happens when you start a business. That's right - fear of failure. Fear of those looming statistics that say you're probably going to fail. Fears from your family, friends and colleagues who shake their head at your decision. Fear from the loss of security, benefits and support staff that makes you feel safe when you're working for a stable company. Fear of your own decision-making skills. Need I go on? The inherent and pervasive fear from kicking off an entrepreneurial venture can activate your primal brain to protect you and make you abandon your venture (either through procrastination of a needed but dreaded task, overwhelmed helplessness, poor relational functioning, etc.).
However, your primal brain can be your most powerful ally and loyal protector. The key is learning how to make it work for you so that you can accomplish the goals your frontal lobe creates (e.g. business plans, entrepreneurial ventures, networking, writing a book, losing weight, going on dates, listening, eating healthy, etc., etc.).
If you would like to learn specific methods for harnessing your inner ally and making your primal brain work for you rather than against you, please join me for a special-request seminar focused on entrepreneurial coaching methods that will help you harness your inner power and achieve greater success in accomplishing goals based on your passion and purpose. This is an intimate gathering of pre-screened committed entrepreneurs only with limited spots available. If you're interested in attending, please contact me at 512.617.6356 to discuss where you're at in your business and how this seminar can help you.
Harness Your Inner Power Seminar
Fri. Jun 26 3 PM - 5 PM with optional happy hour to follow at The Grove
Sat. Jun 27 9:30 AM - 12 Noon
The Overlook at Rob Roy - 6836 Bee Caves Road - 2nd floor conference room
Austin, Texas 78746 - 512.617.6356 - Kimberly@EncompassWF.com
Cost: Normally $950; Save 75% with Club E Network & Bootstrap Austin Discount Only $317
What to Expect: Presentation with interaction among group members sharing their experiences with the common pitfalls of entrepreneurship, life management and ineffective habits. Bring a list of the challenges you want to overcome in your business, life and even your family, and learn customized approaches to harnessing your inner power and making your primal brain work for you rather than against you. You'll leave with renewed energy, motivation AND real applicable strategies that will make you overcome the procrastination and devastating habits that cause 8 out of 10 businesses to fail within the first year (64% by the fifth year).
Kimberly Key is founder of Encompass Work & Family, an Austin-based entrepreneur coaching and counseling firm. She has worked with Fortune 500 companies and numerous start-ups and their families, helping them unlock their passions and achieve their purpose.