Composites of Entrepreneurial Success and Failure


An entrepreneur has much to learn in order to be successful. Among the educational requirements are: The day-to-day complexities of running a business, creating and/or producing products, delivering services, making money and dealing with the public. The biggest challenge of all, however, is to develop an understanding of yourself.

Entrepreneurs must come to grips with what they want and what motivates them; this will support their willingness to face adversity – that is bound to arise – and come out as winners over the long term. Successful entrepreneurs will have learned to transform their thinking, allowing them to prevail where others fail along the way.

True entrepreneurs struggle with their business ventures just like anyone else and for a variety of reasons, among the most obvious of which are a lack of capital, lack of understanding about marketing, and personnel issues. However, from my own entrepreneurial experience (32 years in real estate and mortgage financing business), and what I know of others, there are three underlying causes of failure when individuals pursue entrepreneurial ventures.

  1. They tie the success of their business with their own self worth.
  2. They neglect to set realistic goals and plans for themselves and their business.
  3. They are not prepared to pay the price for success.

True entrepreneurs with the right mindset will prevail over a period of time because they will have learned to understand certain fundamental maxims of entrepreneurial success.

Playing the part

Successful entrepreneurs, in contrast to those who fail, have learned to separate their standings in life from their self worth or self-identity. They understand that positive performance or failure in their own venture is not a judgment of them as individuals. People who are inclined to measure their self-worth against their venture performance are inherently adverse to risk and seek to remain in a perceived comfort zone.

Being able to differentiate these two identities allows them to see risk differently, and manage it better, which in turn lays the groundwork for success as an entrepreneur. People who have risked failure, experienced it, and learned from it, have not only learned how to separate their business performance from their self-identity, they’ve also learned the lessons of risking and failing.

These risk takers have a clear understanding that early failure in ventures is a natural part of successful start-ups. They are able to embrace those experiences, learn from them early and move on. This is critical to success as an entrepreneur. They must be willing to face and deal with early failures in order to prevent ultimate failure.

Objectives

Even though much is said and written about goals and objectives being necessary for success as an entrepreneur, few people learn the mechanics of successful goal and objective setting and planning. It’s not the plan but the planning that is important, and the goal setting process allows them to develop the confidence to take risks and fail.

Successful entrepreneurs are not only goal driven and goal oriented; they have learned to put into place the steps required to plan strategically and put forth reachable goals and realistic objectives. Visualizing goals, writing them down and putting together a detailed plan for achievement provides the confidence and motivation to prevail.

More than just business or operational plans, they have goals and objectives for all the important roles in their life. They have learned early that if they aren’t working their own plan they are probably working on those set forth by someone else. They chart their own course, embrace risk-taking leadership positions, make adjustments as required and prevail over a predetermined period of time.

Paying the price

As with any other aspirant to accomplished fields of endeavor, an entrepreneur understands that in order to be successful s/he must be prepared to pay the price at one time or another. There are really no overnight entrepreneurial successes. In fact, it has been said that overnight success generally takes 15-20 years. One of the early prices that entrepreneurs are quite often forced to face is the “re-making” of themselves in a way that can propel them to grow beyond the comfort of their sphere of influence.

Since most people tend to stay within their own psychological comfort zone, they begin to lose the risk taker mentality. They are comfortable with the type of person who is more like them, while the successful entrepreneur moves on to a different circle of associates who understand the journey.

Breaking out, being your own person and venturing into the risk induced unknown is lonely but bold and forces the risk taker to face the new set of circumstances. Consequently, there can be a new-found stress in old relationships.

It’s been said before that pioneers get shot in the front and the back, and only through a process of separating the venture performance from self-worth, being open to risks, prevailing through adversity, sticking to set goals and objectives, and adjusting your plans will you be prepared to pay the ongoing price that must be paid if you are to be a successful entrepreneur.

How Is Entrepreneurship Defined?


In discussing entrepreneurship and writing articles on the subject, it seems logical to me – or sensible anyway – to begin the discussion by agreeing on exactly what the word or term means to us as participants in the discussion.

Entrepreneurship is the process of creating or seizing an opportunity, and pursuing it regardless of the resources currently in one’s control. According to Wikipedia entrepreneurship is defined as “the act of being an entrepreneur, which can be defined as ‘one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods’. This may result in new organizations or may be part of revitalizing mature organizations in response to a perceived opportunity”.
Dictionary.com defines entrepreneur as “a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk”.

These are rather abstract concepts for a person just beginning to consider whether s/he ought to start a business rather than take a job, or leave a secure job for a chance at greater self-fulfillment. Let us try to refine our understanding of entrepreneurship by asking some more specific questions.

Is everyone who runs a business an entrepreneur? Many would not consider the newspaper carrier, shoeshine person, and grass cutter entrepreneurs, though these are often the youthful pursuits of those with an entrepreneurial characteristics, if not aspirations. In fact, lawn manicurists today are managers of well-managed businesses.

Does it matter whether the endeavor is merely part-time? Whereas some part-time activities are basically hobbies, or undertaken to supplement income – similar to certain jobs and types of employment – some entrepreneurial ventures can be tested in the marketplace on a part-time basis.

The path to an entrepreneurial venture might begin by earning a salary in the business you expect to enter, while learning more about it, and waiting for the opportune time to go out on your own. This time can be used to develop a support network – professional and personal – and generate ideas to “bounce off” people whose opinions you respect.

At what scope does self-employment become a venture? The primary objective of many self-employed people is merely to employ themselves (and others if necessary) at a moderate to good rate of pay (or salary); some are even willing to eke out a living to do what they enjoy. This approach is often referred to as a “lifestyle” business, and is generally accompanied by little, if any, plan for growth.

These questions are intended, not to develop a precise definition of entrepreneurship, but to develop a better understanding of our attitude toward its many forms of expression. We may each answer these questions differently, yet we all answer them appropriately within our own frames of reference.

Entrepreneurship is more an attitude than a skill or a profession. Some of us may prefer employment in a corporate or public service field, but many would choose an entrepreneurial opportunity that “feels right.”

Would you consider a person who inherits a business an entrepreneur? From the point of inheritance on, it is their own money and financial security at risk. They could possibly sell the business, invest the proceeds in blue-chip stocks, and live off dividends. Some might consider managing a personal stock portfolio for a living as an entrepreneurial venture.

Would a person who inherited a small or marginal business, then took it to new dimensions be considered an entrepreneur? The inheritor could have tried merely to keep it going, or even to pace the business’ decline to just carry them to retirement. In a family-held business, long-term success is often a central goal.

Are franchise owners entrepreneurs? Many feel that, for those who have access to the large up-front investment, franchises are sure things. For many, operating a franchise is similar to investing in “blue chips,” a relatively sure thing with generally unexciting returns.

So whether you’re inclined to work in an atmosphere where you call your own shots, take your own risks and take your destiny into your own hands; Or you prefer the guaranteed salary, set hours and safe (free of risks) circumstances offered by a job, it is good to have a clear understanding of both kinds of work before pursuing either. And since most people have a relatively good understanding of a salaried job (or position as the case may be), I hope we’ve defined entrepreneurship in a way that is easy to understand.