The Top Reason Why New Entrepreneurs Fail
Are you the janitor or the owner?
The top reason why new entrepreneurs fail isn’t what you think.
It never ceases to amaze me when I run into egos the size of the Texas when dealing with new entrepreneurs. Unfortunately, these newbies do not know that the top reason that new entrepreneurs fail is because of their ego, not because they didn’t have enough money or experience. Sure these last reasons are of significant relevance as well, however, a successful new business owner understands the importance of being humble. Not verbally, but truthfully.
Here’s a short write up on why new entrepreneurs will fail and the ego ranks among the top reasons:
…top failures are: too ego-driven, lack of execution, haphazard hiring practices, lack of decisiveness, and failure to follow-through and deliver on commitments…~bNET
Your ego needs to be checked if:
- If your first instinct is to tell everyone that you’re the owner of your new company or if you feel slighted if you haven’t been given credits for your title.
- If you ever say, “I’m the owner. I have the right to…”
- If you ever kept yourself from hiring someone because you felt like they were better than you or they would be too much of a threat to your position.
- If you ever took some one’s advice and did the complete opposite because you didn’t like that person.
- If you ever let someone in your organization get away with murder because you didn’t want them to think you were too negative.
There is a real yet destructive force to new entrepreneurs that is the cause of your demise in over 80% of you in your first year of business. The overwhelming need to know everything now, which gets most of us to be quite obnoxious at times due to sheer frustration, is already a tough issue to deal with. However, the urgent need to be right is even more destructive and will ultimately sabotage your business.
RECOGNITION
One of my business partners in her first year of business would remain completely quiet during our marketing and strategy meetings. She would almost sulk since no one would ask for her opinion. However, rather than relaying her opinion on our topics in a professional manner or even vocalizing her issues about feeling neglected, she would just sulk. No, she was not a teenager, she was in her mid-30′s at the time. Then she would call me as we were driving away from the meetings and whine about the fact that she felt unimportant & she felt that no one listened to her. Without us saying so much that she was stupid, she felt like we made her feel stupid for having opinions so she just stopped participating.
Now that’s ego folks.
I had to explain that even after 2 years, I still had my ideas rejected on a regular basis. That is just a part of the process. I can’t be on target 100% of the time. Why would I need partners and advertising Gurus if that was the case? And as far as no one calling on you, it’s not elementary school anymore. In the real world, you make your opinions heard by speaking up and making good points.
It’s no secret that owning your own business is tough and you’ve got to grow some thick, slippery skin while you’re at it. If you let every insult, what you perceive as a slight, someone not calling on you for an opinion or a rejection of your viewpoint hurt your feelings then you are going to be a miserable wreck all the time which makes you distracted & unproductive and remember that the world doesn’t revolve around you.
DISCIPLINE YOUR STAFF
When I sold 3 of my salons last year to a couple (we’ll call Hurricane Jax) with the employee mentality, I knew that their egos would be a huge factor in their success or failure, so I bought a dozen copies of Eckhart Tolle’s A New Earth: Awakening to Your Life’s Purpose (Oprah’s Book Club, Selection 61)
They got to a point where they didn’t even discipline or even coach and counsel their staff because they didn’t want to be perceived as ‘negative people.’ So they let one of their 18 year old male employees chew and spit dip in front of the clients and they let the staff run the shops. Being a friend was much more important than being an effective manager. You can just imagine the chaos that created.
They would tell their manager to not tell me when they did things that had a negative outcome because they were ‘afraid of me.’ Again, they thought too much of themselves to believe that I would be so affected by their actions that I would take the time to be angry with them over trivial stuff. Remember, the world does not revolve around you.
EGO CREATES FEAR
One of the nasty side effects when your ego feels threatened is you start to act out of fear. I am all for the fire-ready-aim approach, but at some point, you do have to take the time to aim properly. When you start doing things to spite someone else’s efforts, your ego is getting the best of you. Hurricane Jax went so far as to:
- take out the check readers to save themselves $14.95 a month which they put back in after many large checks bounced
- take out the reverse osmosis water filters and fed the clients tap water which saved them a whopping 4¢ per client
- moved a $90 service to a dressing room that was too small and so inefficient that you tripped on a few extension cords as soon as you walked in the door
- changed the uniforms which now made the girls sweat like little piglets because one of the owners didn’t feel comfortable in how she would look in the current uniform
- only applied the change & cancellation policy to 2 of their locations, then changed the rules whenever s client yelled at them which created monsters out of the clients
- stopped taking credit card information to secure appointments which created the highest rates of no-shows in the history of our business
All this and more for the sake of not having any trace of the previous owners influence. Ego or smart business tactics?
CUTTING OFF YOUR NOSE TO SPITE YOUR FACE
I heard this once about 10 years ago and only now does it make total sense as I have seen it in action. In the early days of these new entrepreneurs, I had offered to help them sell their services and packages as that were part of the formula for their business model. The mister of the Hurricane Jaxs flat out refused and said that he was afraid the staff was confused as to who the ‘owner’ was. This was after I had shown them that I could bring in about $30,000 just with my own efforts and just to help get them off the ground. Oh, did I mention that I was doing this for FREE???
BE THE JANITOR
So the moral to the story is this: be the janitor. If you must have a title, then be the manager or ‘director of something.’ I’ve also found that you are treated differently as the manager too. I’ve had many instances where a ‘good’ client turned into a monster client after they found out that I was the owner. If they didn’t get something their way, they would then demand to speak to me and expect that I fix an issue that my managers had already handled.
You can so easily let your title get in the way of your job as a new entrepreneur and it can cause you to fail without much grace. If you feel compelled to shout out to everyone that you come in contact with that you are the owner of XYZ Company, recognize that as your ego rearing its ugly head. Then maybe next time, it will get easier to stop it in its tracks before it completely dismantles your business.
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