The 1 Simple Reason Why Most Businesses Fail

Being an entrepreneur is certainly in vogue these days. However, many businesses fail because the founder is going into business for the wrong reasons.

Every month I teach a workshop called “Small Business Bootcamp: Steps to Owning Your Own Business” to between 35 to 45 people. At the very beginning of every workshop, I start with a simple question: “Why do you want to become an entrepreneur?

The typical responses I hear are “I want the flexibility to work from home,” “I want to become rich,” and “I want to be my own boss.” Unfortunately, many of these people will likely fail in their pursuits because of this one point: Their goals for wanting to start a business are self-centered and not externally-centered.

Rather than starting a business to enrich yourself, entrepreneurs that start a business to enrich the lives of others tend to fair far better. So, the best answers are related to the founders need to fill a perceived gap with a product or a service that will make the consumer or their client better off in the end. It might be a product that does a job faster or better so the consumer will have more time to spend with family or it might be a service to help the consumer preserve an asset longer or make them more comfortable.

At the root of this issue is that I believe that human nature makes us try harder when our efforts affect others in a positive way. If a lack of trying only affects you, you are far more likely to quit the pursuit much earlier when the going gets tough. However, if a lack of trying on your part will affect others, human nature drives us to dig a little deeper and do whatever it takes to persevere.

Soldiers in the heat of battle often make the decision to risk their own lives to save the lives of their fellow soldiers without conscious deliberation. When our vision is externally focused, we just try harder.

Steve Jobs said it best:

“If you are working on something exciting that you really care about, you don’t have to be pushed. The visions pull you.”

Have you ever noticed that mission statements, which answer the question of why you are in business, are all externally-centered? They all focus on the consumer and not the business owners. They don’t say our mission is to make money for our founders and shareholders; they focus on the value to the consumer.

Consider the following mission statements:

  • Google: Google’s mission is to organize the world’s information and make it universally accessible and useful.
  • Nike: To bring inspiration and innovation to every athlete in the world.
  • eBay: At eBay, our mission is to provide a global online marketplace where practically anyone can trade practically anything, enabling economic opportunity around the world.
  • Microsoft: At Microsoft, our mission is to enable people and businesses throughout the world to realize their full potential.

In addition, having a mission that is externally focused and having a commitment to others is also a powerful motivator.

When I had an employer-based businesses and I was having a particularly hard day, I could not justify just packing up and going home to lick my wounds. I had employees who had families to feed, mortgages and car payments to make. They needed me to persevere. That externally-centered obligation caused me to keep my nose to the grindstone and keep moving forward even when I didn’t want to.

So, when a client says that they have a product or service that will make the world a better place or they have employees that they care about, I know that their motivation is external to themselves and they will keep their head down longer when the going gets tough.

No matter what business you want to start, there will be roadblocks and times when you will ask yourself if it is all worth it. When the reward is self-centered, it is much easier to just quit and move on. However, when the reward is externally-centered, it is far more likely that the founder will have the grit necessary to persevere when the going gets tough.

Is your reason for going into business self-centered or externally-centered?

Don’t forget to sign up for our free daily email delivery so you can get future inspirational blog posts deliver directly to your email each morning.

Follow us on Twitter @SteveImke
If you like our post “Like” us on Facebook LikeUs

If you like our content PLEASE share it on your social media channels. Thank you!

2 thoughts on “The 1 Simple Reason Why Most Businesses Fail

Leave a Reply

Your email address will not be published. Required fields are marked *