Watch out for the Keys to Failure!
ona.kiser on January 31, 2010
Ninety-nine percent of literature about management looks at success stories, while only five percent of businesses make it past their fifth year. Why? This is the question behind the book “El libro negro del emprendedor: No digas que nunca te lo advirtieron” (The entrepreneur’s black book: don’t say they didn’t warn you).
Written in 2007 by Fernando Trías de Bes, a Spanish marketing consultant and professor at Esade, it skips the Keys to Success and outlines instead the Keys to Failure. That is, based on examples, it explains how others have failed and what to watch out for.
On the first page Fernando explains: “the errors of the entrepreneur are not usually to do with management; they are usually caused, paradoxically, by the same energy that inspired the person to be an entrepreneur: hope.” But as a rule, “the main cause of failure in new businesses is a lack of objectivity on the part of the entrepreneur, an inability to see reality as it is.”
Each chapter is dedicated to reviewing the context of a different Key to Failure, such as those:
- related to the entrepreneur himself: having an idea but no motivation; lacking the character of an entrepreneur (one must love uncertainty!); not being a fighter;
- related to the partners: having them when they are not needed; choosing them without looking at important criteria; sharing profits without considering how much each partner invested; lack of trust and communication;
- related to the business idea: finding that success depends on the idea; working in a sector you don’t know or like; choosing unattractive sectors to target;
- related to the home life of the entrepreneur: finding business interferes with family necessities or material ambitions; starting out without understanding the impact it will have on your personal life;
- related to growth management: creating a business model that won’t bring rapid and sustainable profit; clinging to leadership when it doesn’t benefit the growth of the company.
Have you suffered any of these Keys to Failure? Do you know of other factors every entrepreneur should be careful of?
