Business Success or Failure

Business Success or Failure
Although there are many opportunities for entrepreneurial success, there
is also a risk of failure. According to a recent study by the Small Business
Administration’s Offi ce of Advocacy, two-thirds of new businesses survive at
least two years, and 44 percent survive at least four years. This means that
more than half of all new businesses do not survive beyond four years. These
results are similar for different industries. Many people think that there is a
higher failure rate for restaurants than other types of businesses. However,
leisure and hospitality establishments, which include restaurants, survive at
rates only slightly below the average. Major factors in a fi rm’s success include
having adequate capital, providing a product or service that meets customer
needs, the owner’s education level, and the owner’s reason for starting the
fi rm in the fi rst place, such as freedom for family life or wanting to be one’s
own boss. The reason must suffi ciently motivate the entrepreneur to have the
perseverance to succeed.
The owner’s business experience is a
factor that contributes to the likelihood
of success. Experienced businesspeople
have an understanding of how to
purchase products and services. They
know how to plan, negotiate with
suppliers, raise money, negotiate leases,
sell and market their product or service,
and manage fi nances. Many businesses
fail because the owner lacks business
knowledge. Someone may have an
idea for a product or service but lack
the necessary business skills he or she
needs to run a successful business.

There is a major difference between
having expertise regarding a product
or service and running a business with
that product or service. So when opportunity presents itself, entrepreneurs must
have what it takes to succeed.
Characteristics of Successful
Entrepreneurs
Many people dream of running their own businesses. They would like to
become entrepreneurs. Entrepreneurship can be exciting, but many go into
it not realizing how diffi cult it is to run their own business. In fact, statistics
show that most new businesses will fail within a few years. Startup businesses
fail because of the owner’s poor planning, lack of business knowledge, lack
of entrepreneurial characteristics, inability to work with others, or failure to
choose the right business.
Characteristics of Good Team Members
Entrepreneurs realize that there are other
stakeholders in their businesses—partners,
investors, employees, suppliers, customers,
creditors, and so forth. They must work with
others to get their business up and running. They
must have good team-building skills as well as
be effective team members. Good team members
display the following traits.
1. Commitment They are committed to team
goals and willing to work hard to achieve the
goals.
2. Competency They have the right skills needed

to get the job done and to help accomplish the
team’s goals.
3. Communication They have good communication skills and can share ideas with others in both
oral and written form.
4. Cooperation They must work well with others and know that they will not
always get their way. They are willing to accept the decision of the group for
the good of the group.
5. Creativity They are able to look at things from different perspectives and
suggest new ways of doing things.
Are You Right for Entrepreneurship?
Entrepreneurship is not for everyone. Some people lack the qualities needed
to become successful entrepreneurs. Others lack the aptitude needed to run a
business. To determine if entrepreneurship is right for you, you need to perform
a self-assessment. A self-assessment is an evaluation of your strengths and
weaknesses. You can do this in a number of ways. You can list what you believe
to be your strengths and weaknesses on a sheet of paper. You can ask others
what they believe your strengths are and where your weaknesses lie. There are
also professional tests you can take to assess your abilities.
Assess Your Interests
Success as an entrepreneur requires a strong commitment to a business and
a lot of energy. To be able to commit yourself fully to a business, you should
choose a fi eld that interests you and that will provide you with an experience
you will enjoy. Many entrepreneurs center a business on an interest or hobby.
Analyzing past experiences and jobs can also help. Building a business around
jobs or experiences that you found fulfi lling could lead to success.
Assess Your Aptitude
Different jobs require different job aptitudes. Aptitude is the ability to

learn a particular kind of job. Auto mechanics must possess an aptitude for
solving mechanical problems and must be good with their hands. People
who sell insurance must have good interpersonal skills. Answering questions
like those in the Job Attributes Checklist can help you identify the kinds of
entrepreneurial opportunities that might match your aptitudes and interests.
Assess the Advantages of Entrepreneurship
Many people see signifi cant advantages in owning their
own businesses. Some of the biggest advantages include
the following.
1. Entrepreneurs are their own bosses. Nobody tells an
entrepreneur what to do. Entrepreneurs control their
own destinies.
2. Entrepreneurs can choose a business that
interests them. Entrepreneurs work in fi elds
that interest them. Many combine hobbies
and interests with business.
3. Entrepreneurs can be creative. Entrepreneurs
are always implementing creative ideas they
think of themselves.
4. Entrepreneurs can make large sums of
money. Entrepreneurship involves risk,
but if the business is successful, the
business owner will reap the profi ts.
Assess the Disadvantages of Entrepreneurship
All prospective entrepreneurs must carefully weigh the advantages against the
disadvantages before making the decision to start a business. Disadvantages
include the following.
1. Entrepreneurship is risky. There is the possibility of losing money and going

out of business.
2. Entrepreneurs face uncertain and irregular incomes. Entrepreneurs may
make money one month and lose money the next.
3. Entrepreneurs work long hours. Entrepreneurs are never really fi nished with
their jobs. They can work long, irregular hours. They receive no paid days
off and often work evenings and weekends.
4. Entrepreneurs must make all decisions by themselves. Unless they have
partners, entrepreneurs have the fi nal responsibility for all decisions that are
made regarding the business.

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Business Success or Failure

Although there are many opportunities for entrepreneurial success, there

is also a risk of failure. According to a recent study by the Small Business

Administration’s Offi ce of Advocacy, two-thirds of new businesses survive at

leisure and hospitality establishments, which include restaurants, survive at

having adequate capital, providing a product or service that meets customer

The owner’s business experience is a

factor that contributes to the likelihood

of success. Experienced businesspeople

have an understanding of how to

purchase products and services. They

know how to plan, negotiate with

suppliers, raise money, negotiate leases,

sell and market their product or service,

and manage fi nances. Many businesses

fail because the owner lacks business

knowledge. Someone may have an

idea for a product or service but lack

the necessary business skills he or she

needs to run a successful business.

having expertise regarding a product

or service and running a business with

that product or service. So when opportunity presents itself, entrepreneurs must

have what it takes to succeed.

become entrepreneurs. Entrepreneurship can be exciting, but many go into

of entrepreneurial characteristics, inability to work with others, or failure to

choose the right business.

Characteristics of Good Team Members

Entrepreneurs realize that there are other

stakeholders in their businesses—partners,

investors, employees, suppliers, customers,

creditors, and so forth. They must work with

others to get their business up and running. They

must have good team-building skills as well as

be effective team members. Good team members

display the following traits.

1. Commitment They are committed to team

goals and willing to work hard to achieve the

2. Competency They have the right skills needed

oral and written form.

the good of the group.

suggest new ways of doing things.

Are You Right for Entrepreneurship?

to become successful entrepreneurs. Others lack the aptitude needed to run a

business. To determine if entrepreneurship is right for you, you need to perform

a self-assessment. A self-assessment is an evaluation of your strengths and

also professional tests you can take to assess your abilities.

Assess Your Interests

Success as an entrepreneur requires a strong commitment to a business and

a lot of energy. To be able to commit yourself fully to a business, you should

you will enjoy. Many entrepreneurs center a business on an interest or hobby.

Assess Your Aptitude

Different jobs require different job aptitudes. Aptitude is the ability to

entrepreneurial opportunities that might match your aptitudes and interests.

Assess the Advantages of Entrepreneurship

Many people see signifi cant advantages in owning their

own businesses. Some of the biggest advantages include

1. Entrepreneurs are their own bosses. Nobody tells an

entrepreneur what to do. Entrepreneurs control their