When Entrepreneurs Fail

Tom Corley boats - crop

Thirty-four percent of the 177 self-made millionaires in my Rich Habit Study acknowledged that they had failed at least once in business.

Failure is painful. It emotionally and financially threatens your family life. No one likes to fail. But failure forces you to change and grow. The lessons you learn from failure stick. Failure leaves scar tissue on the brain. You never forget your failures and the hard lessons failure teaches. Failure forces you to learn what to do and what not to do. For those who are somehow able to pick themselves up and try again, failure is almost always temporary.

In my books, Change Your Habits, Change Your Life and Rich Habits Poor Habits, I share many of the reasons entrepreneurs fail. Here are the top 8 reasons:

  1. Ready, Fire Aim – When you take action before diligently studying all aspects of a new business venture you will be blindsided when something goes wrong. This is why it is foolhardy to start any business that is new to you. The most successful entrepreneurs have years of experience working in a specific industry. When they start a business, they know the business, they know the competition, they have strong industry contacts and they have proven processes they carry with them in their tool belt. Never start any business without knowing everything about that business.
  2. Bad Business Partners – Picking a bad partner will almost always sink any business. The most successful entrepreneurs have years of experience working with individuals who become their partners. Never partner with anyone if you do not know them very well.
  3. Inadequate Working Capital – Even if you are an expert in your industry and pick the best possible partners, not having enough working capital can sink any business. Ideally, you want to have enough working capital to carry you for two to three years. Working capital can be money you invest or it can be lines of credit.
  4. Lack of Feedback – When you go all in in any new venture, without gathering feedback first, you must figure out how to build your plane while you are falling. Adequate working capital can buy you time, but it is an expensive way to learn. The most successful entrepreneurs almost always pilot any new venture. Why? Because piloting allows you to gather critical feedback that can help you improve your product or service or the way you do business.
  5. Reckless Spending – Those who fail in any venture are often reckless in their spending. They spend too much on new equipment when refurbished equipment will do. They hire too many employees right out of the gate. They spend too much on rent. Successful entrepreneurs watch every dollar and are reluctant to spend their money.
  6. Ignore Red Flags – There are always red flags when you are doing something wrong in business. Those who ignore those red flags end up paying for their negligence down the road. Successful entrepreneurs are always on the lookout for red flags. They are constantly vigilant in identifying potential pitfalls.
  7. Lack of Focus – Entrepreneurs who suffer from Bright Shiny Object Syndrome are perpetually distracted by new things that catch their attention and distract them from their core business. Successful entrepreneurs have laser focus on their core business and ignore distractions that would interfere with that focus.
  8. Too Many Mistakes – Any new venture is going to have their share of avoidable mistakes.  Making too many mistakes will sink even the best business model. Those who succeed almost always avoid making too many mistakes. They go into any venture with proven processes that work or they are fast to develop sound processes that prevent mistakes from happening.

Failure is almost always preventable if you know what not to do. Unfortunately, most only figure out what not to do when it’s too late. If you want to succeed as an entrepreneur you must do your diligence before diving into any venture, surround yourself with proven success partners, adequately fund your venture, pilot any new venture first, be frugal with your money, recognize red flags, focus on your core business and avoid making too many mistakes.

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Thomas C. Corley About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night, due to a catastrophic fire that destroyed his Dad's thriving business. For fourteen years they struggled with poverty. There were eleven in Tom's family, and they lived in constant fear of losing their home.

Driven by the desire to unlock the secrets to success and failure, Tom spent five years studying the daily activities of 233 rich people and 128 poor people. He discovered there was an immense difference between the habits of the rich and the poor. During his research he identified over 300 daily activities that separated the “haves” from the “have nots.” Tom decided to write a book to share what he learned. That book, Rich Habits: The Daily Success Habits of Wealthy Individuals (1st Edition), went on to become an Amazon Bestseller in the United States forty times over a three year period. To give you some perspective, in order to be a true Amazon Bestseller in the United States, where you actually receive a specific Bestseller designation from Amazon, you need to be in the top 100 of all books sold by Amazon in the United States in a given day. Rich Habits did that for nearly thirty straight days, rising as high as #7, eclipsing such Bestselling authors such as Stephen Covey, Robert Kiyosaki and J.K. Rowlings. Imagine that - an unknown, first-time, self-published author selling more books than J.K. Rowlings!

Tom now travels the world, sharing his Rich Habits and motivating audiences at industry conferences, corporate events, universities, multi-level marketing group events, and global sales organizations’ presentations and finance conferences. He has even spoken on the same stage with famous entrepreneurs and personal development experts, such as Sir Richard Branson, Robin Sharma, Dr. Daniel Amen, and many others.

Tom has shared his insights on various national and international network, cable, and Internet television programs such as CBS Evening News, NBC News, Yahoo Financially Fit, Money.com, India TV, News.com Australia, and a host of others. He has been interviewed on many prestigious nationally syndicated radio shows, including the Dave Ramsey Show, Marketplace Money, and WABC.

Tom has been featured in numerous print magazines—such as Money magazine, Inc. Magazine, SUCCESS Magazine, Entrepreneur magazine, Fast Company magazine, More magazine, Epoca Magazine (Brazil’s largest weekly) and Kiplinger’s Personal Finance magazine—and various online publications, including USA Today, CNN, MSN Money, SUCCESS.com, Inc.com, and the Huffington Post. Tom is a frequent contributor to Business Insider, Credit.com, Bankrate.com and a few other media outlets.

National publicity has garnered international media attention for Tom and his Rich Habits research spanning 23 countries. Broadcast media, online publications, and television throughout Asia, the South Pacific, Europe, the United Kingdom, and Central and South America have shared his powerful message.

In an effort to help parents, grandparents, teachers and adults become success mentors to the younger generation, Tom released his second book, Rich Kids: How to Raise Our Children to be Happy and Successful in Life in 2014. This book was the self-help category winner of the 2015 New York Book Festival and Runner-up in the prestigious 2015 Writer’s Digest Self-Published Book Awards Contest. In 2016 Tom released his third book, Change Your Habits, Change Your Life. This book provides the latest science on habit change as well as more of Tom's unique research on the specific habits that helped transform 177 ordinary individuals into self-made millionaires.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
Phone Number: 732-382-3800 Ext. 103.
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