You have probably made the best decision of your life – to own your own business. I know before you arrived at the self-liberating conclusion, you must have attended several seminars on entrepreneurship or read biographies after biographies of successful entrepreneurs or you may have made the decision based on mere observation of the prospects that surround you. All in all, you have made the right decision and I’m not about to discourage you from that.
However, have you taken the first step in the right direction? According to Forbes, 8 out of every 10 businesses will fail within the first 18 months. According to another research made by Small Business Administration, six out of ten new businesses will survive the first five years while four out of twelve will survive the first ten years. If you ask me, that’s a lot of CEOs losing their investments now and then.
But optimistically, we can always interpret the statistics that at least in every ten new businesses, two will survive. That is more positive, right? And you could be one of the surviving two if you know the habits of the other eight and avoid them. All right, let’s go!
HABITS THAT SEND BUSINESSES PACKING
Being a business owner is probably the most demanding job out there. But it also pays more than any other job you can find. Also, it is not surprising that you find some excelling at it while others don’t. Succeeding or failing at entrepreneurship is based on a few things I’ll share with you now.
- Purpose: Some failed CEOs cannot answer this question correctly. Why do you want to become an entrepreneur? To make quick money? No, it doesn’t work that way. To escape your current boss? You will always have bosses, no matter what. Of course, your investors and the tax company will still be in your neck at least. So if you are thinking of entrepreneurship as a means to escape your current problems, you will not do well as an entrepreneur because that’s one red flag proudly hoisted by failed CEOs.
- Business Model: Because most people just want to start their own business, start making some good bucks in the first few months, they rush through the important stage of planning. Without a good business model in place, you will be knocked down by the swift race out there. A good business model is arrived at after proper study of the market you are entering. The quality and uniqueness of the market will eventually shape your business model. A good business model will raise the index of your success as a business owner.
People Management Skills: Most businesses that fail lack these soft skills in their arsenal of skills. Successful CEOs recognize opportunities, harness them, inspire professional development in their workforce, give empathy to humans, build beneficial connections, recognize and reward excellence. Are you a boss or a leader? A boss doesn’t manage people but a leader does! The difference between the two personalities is big enough to make a big difference between success and failure.
- Financial Discipline: Another attribute that failed CEOs lack; the lack of financial discipline has sent more business packing than you can imagine. Think of Blockbuster, Enron, BHS, Woolworths, Comet, to mention but a few are giant companies that folded due to poor financial management. Alongside these giants are billions of startups that fold every day because of this same reason. To cap it, failed CEOs don’t mind their accounts! You have to watch out for this if you want to make it as an entrepreneur.
- Adaptivity: This is another business killer. Just imagine sudden inflation after a boom? Imagine running an industry being weathered by an economic meltdown? There are many others like that where situational adaptivity has determined the success or failure of businesses. Apart from having a good business model, great management money handling skills, you still have to possess the right emotional intelligence required to weather the storm. Can you? Failed CEOs cannot!
- Risks: You do not have to be told why you must take risks as a business founder or an executive top man. Every person involved with business management has had to make one tough decision or another. But how fast are you in making such decisions? This goes a long way to whether you’ll be deflected from the race or not. More often than not, making a proactive decision early enough in times of crisis gives the best result than not making any decision or making it a little too late.
To wrap this up, I bet you are reading this to learn the mistakes of others so you can avoid making them. The journey of a CEO is not a smooth sail. But as I said in the beginning, you’ll be thankful you made that decision later in life. On the condition that you find the right purpose, be financially responsible, know how to manage people, can adapt quickly, have a strong business model, and can identify and take good risks. That’s when you walk the path only taken by successful CEOs.