Every month, around 550,000 individuals launch their own company and become entrepreneurs. However, a staggering 30% of them will fail within the first 2 years of their independent activities. Only 50% make it past the first 5 years, and within 10 years two-thirds of entrepreneurs close their business down.
There are, of course, complicated and valid reasons behind these statistics.
For a start, it can be difficult to launch a new company with insufficient funding. If entrepreneurs can’t gather the capital they need, they will be forced to shut down. Additionally, a good business idea can meet harsh competition on the market and fail to stand out from the crowd, causing the company to collapse slowly. Last, but not least, attracting the talent you need to grow your business is a challenge for any company. But for startups and small businesses, it can become an impossible struggle, especially as employees are getting cautious about taking a job in a company that has not yet proven itself.
However, the most common cause of failure in the business world is when an entrepreneur can’t detach themselves from the everyday process. They don’t only become part of the machine; they let the business rule over many aspects of their personal lives.
You can’t give 100% of your time to your company
When you work for someone in an office, it’s easy to disconnect at the end of the day. But when you’re your own boss, it sometimes feels as if there were no end of the day. You might be tempted to take work with you at home, or even to stay in late to make sure that everything can run smoothly. Being an entrepreneur completely transforms your perception of the business. However, what it should never do is control your work/life balance. You need to learn to compartmentalize work and family time so that you can relax when you’re not in the office. Additionally, you need to recharge your batteries if you want to be an inspiring leader! The overworked and overtired leader isn’t a good look!
The self-financing pitfall
Of course, to launch your company, you need funding. New businesses can find it tricky to apply for a commercial loan when they have no previous commercial history to share. However, it’s vital to avoid the number One mistake of newby business owners, namely to use your personal assets as loan default. When the business is in a difficult financial position, lenders could seize the collateral, which means if the asset is your home you could be homeless. These financial situations need to be sorted out rapidly, preferably with an insolvency expert such as Bennett Jones, to agree on new payment terms. Failure to tackle a money issue that involves your personal asset could lead to devastating consequences.
Don’t take work stress with you
Don’t take work at home, but more importantly, don’t take stress either. You don’t have to wait for the weekend to plan enjoyable and relaxing activities. Sometimes, adding only a few hours to your routine, by getting up early, can help you to find inner peace and tackle business hassle smoothly.
At the end of the day, entrepreneurs need to make their emotional, social, and financial health a priority. When you’re personally hit by business issues, you can’t be the leader your company deserves.