Episode 8 (Blog Edition): If 70% of businesses fail in their first 5 years, why be an entrepreneur?

When a skilled gambler considers the odds, they will never go with a 70/30 chance of success, right?

No one in their right mind would.

So why do so many people, Men and Women, pursue the dream of being an entrepreneur?

To put it simply: while the risk is high, the reward is worth it.

Let’s dive into it further to see how.

Entrepreneurs get to work for themselves

This is both true and false. Let me explain; Being an entrepreneur allows you to choose your own schedule and make your own decisions, but there’s a catch. Your customers are really your boss. They are the ones that drive certain decisions and dictate a schedule for you.

While this is not exactly like working for another company and having a boss breathing down your neck, telling you what to do and when you will be working, as an entrepreneur, you have to look out for your customers’ needs. If you don’t, well, your business will fail.

There is potential for high reward

Many people, when considering becoming entrepreneurs, look into a lot of success stories to see if it is worth it. You obviously look into, say, Elon Musk’s story because he is the richest man in the world right now. You want to know how he did it. You want to know what drove him to success.

Looking into these stories and seeing how people have been successful is great. It is very motivating, but does it give you the right idea of the reality of being an entrepreneur?

Yes and no.

Becoming very rich like Jeff Bezos, Elon Musk, or Mark Zuckerberg is very much a reality. Their success stories are not fake by any means. However, they are the exception.

While making Billions of dollars is the exception to the rule, There are millions of entrepreneurs that are successful.

That said, let’s define success. This really is up to each person to define, but for the sake of this blog, let’s define success as making enough money to support your needs and have many things you want in life. You are making enough money to do the thing you love full-time.

Too many people think that if they are not the next Mark Zuckerberg, or have not reached the 1 million dollar mark, they are failures. There is nothing further from the truth. Please do not let yourself believe that!

I'm not saying you should not shoot for the stars. I mean, as Les Brown once said, "Shoot for the moon. Even if you miss, you’ll land among the stars." Applying that to this article, by all means shoot for millions or billions of dollars (the moon). If you do this, you will increase your chances of hitting the stars (our earlier definition of success.)

The percentage of ENTREPRENEURS that fail is not so high

So, we have defined success. Now let’s define failure. When a business owner says their business has failed, they mean many things like they ran out of money, the business was never a good idea in the first place, they lost interest in the business, etc. but true failure comes when you give up. Entrepreneurs may give up on the business, but that does not mean they give up on themselves.

The 70% figure only refers to the amount of small businesses that fail. Not the percentage of entrepreneurs that fail by giving up on themselves. If you have what it takes to be an entrepreneur, you cannot fail. If you look past the unicorn stories we all hear about, there are many entrepreneurs that start 5-10+ businesses before they find success as we defined earlier. While there were failures along the way, those entrepreneurs do not fail because they keep going.

So to repeat the recurring theme of this blog post: small businesses may fail at a rate of 70%, but entrepreneurs fail at a much lower percentage.

One of the main causes of small business failure

To bring things to more of a personal level, I have started about 5 businesses before getting to this one. Some never made it past a website in the making. Others made me some money, and others just drained money, but from all of those experiences I learned valuable lessons like what I like to do and what I don’t like to do. I have learned how to create a decent website and come up with a good business plan.

One of the biggest reasons why I didn’t “succeed” with some of those businesses is because I just lost interest. I had money to feed the business, I had time to put into it, but I just lost the desire to keep going at it.

An example of this is my drum lesson business. When I first started, I was really excited about the idea of teaching the drums. I buckled down and spent hours on a website and business plan. I had goals for the near future and even for years in the future. I was looking at the business idea as something I would be doing my entire life. I thought, “this is it!”

I finished the site and published it. It didn’t take long for me to have my first student, then my second, then my third. After a few months of teaching and having a somewhat crazy schedule between my day job and the business, I decided it was time to throw in the towel on the business.

It was just too hard to miss out on hours at my day job to accommodate my students’ schedules. I also came to the realization that I just didn’t really enjoy teaching drums as much as I enjoy playing them.

The Solution

There is a solution to combat small business failure. As mentioned before, lack of motivation is one of the biggest reasons why small businesses fail. The entrepreneur has a hard time keeping it interesting and fun. This could be for a lot of reasons, but I think it’s safe to say that one of the biggest reasons is that there is so much to do when running a business.

A good thing to consider if you’re losing interest in your business or you’re feeling overwhelmed is outsourcing. It is a good way to take tasks off of your plate to ease your burden as a business owner and enable you to spend time on the tasks that you enjoy doing, or make it possible to achieve financial independence where work is optional.

Tim Ferriss, a popular businessman and writer of “The 4 Hour Work Week”, talks about looking at our businesses and deciding what we need to first eliminate, then automate using systems and software, and lastly delegate. Again, if you are feeling overwhelmed, burnt out or discouraged, I would encourage you to take a serious look at your business and see what you can simplify, eliminate, automate and delegate. Consider delegating (outsourcing) to us!

Here at Firepreneurship.com we offer content creation outsourcing. Content is a great way to establish a relationship with your clients and customers. It's a great way to help get your message across and to help you bring your personality into it. I'd like to invite you to look into our services to see if they're right for you and your business.

What business are you running or planning on starting? Let us know in the comments below! And don't forget to subscribe to our newsletter to be among the first to hear about new, great content!