Why most Entrepreneurs fail & what to do about it.

With over 4 years experience after resigning from a very promising career and jumping into entrepreneurship, I have quickly learnt a big lesson that most people who resign and begin self-employment fail to understand.

There is a book titled the E-myth Revisited by Michael Gerber. This author has simplified the principle behind running a small business and scaling it.

Let’s start with this short story.

Lucia is a very resourceful and talented digital marketer with over 7 years experience with ABC Ltd. She is technically the most competent staff in her unit and everything around execution actually depends on her. 

She wakes up one day and she is tired of working for someone. She knows that she has all the competencies, templates, experience and technical know-how on the job. She then decides to register her own company with the CAC and makes up her mind to leave her paid job and chase her dream of doing her own thing.

If you can relate with this story, I am sure you either have attempted this or you are thinking of it at the moment. Before we go too far, I can tell you that 95% of people who resign based on their technical expertise/competence on their job usually fail in business and begin to look for a job again within a year or two. This happens especially when they cannot meet up with their current lifestyle, bills and debts.

So what exactly is the problem…

The major challenge is that people do not know that there are 3 personalities required to run a business. These personalities must be possessed and controlled by the individual. Most times, one person usually does not have these personalities. However, a lot of people do have them to start with; and knowing these personalities can help a great deal. These personalities are the Technician, the Strategist (Entrepreneur), and the Manager. We shall be looking at each of these attributes shortly.

The Technician – I call this guy the “setup”. He is usually the one responsible for a lot of premature resignation. This is the part of you that knows the job. In the case of Lucia; it is the Digital Marketing part of her that can answer all questions around the job and execute them. However, being technical is not enough to run a business. There is always the business behind the business. You need to understand the business behind your skills & competencies if you truly want to monetise it..

The Strategist (Entrepreneur) – This is the visioneer. This is the part of you that is the dreamer, the one that looks at the future, sets the goals and expectations for the business. This part of you has a clear picture of where you want to be in the next few years. However, you have to be really careful when you are having these dreams, because this part of you really does not pay attention to the details of the moment and you might end up dreaming without paying attention and doing the meticulous little tasks that should take you to your dream.

The Manager – This is the organised part of you, the guy that worries about structure, documentation, finance and other statutory obligations. This part of you wants to take less risk and might get in the way of the strategist who is supposed to be a risk-taker chasing the BIG dream.

Usually, successful companies usually start from two people who share these personalities. The most popular combinations are when one is “the technical” and “the strategist” and the other is “the manager”. Or one is “the strategist and manager” and the other is “the technical” person.

In both scenarios, the technical guy just focuses on the work, the strategist thinks on how to move the business from infancy to a great company, look for the right investors and see how to sell the business idea and look out for the books and all the risk that comes with the business.

There is always a great conflict with these personalities if it is one man that has to start the business, because you cannot be strong in all these areas. There will always be a weak link that sets you back or makes you attend less to the remaining personality. So must understand and harness the potentials of all these personalities. 

As an entrepreneur, you must quickly grow to be more strategic; because this involves you taking out time to see how to improve your business, learn new ways of doing things, innovate, beat your competitors, market your business and your offerings. However, as soon as you start getting jobs, especially if you are really good at what you do, you will be easily overwhelmed. Client requests, operations and backlogs will drive you nuts. You probably might never have time to be strategic and that is where the frustration comes in. You will be so busy only trying to deliver on your service offerings. As the business demands grow, you begin to default because you are overwhelmed and maybe not organised.

You will most of the time not have a life and begin to hate the so-called business you chose to start in the first place because you will not have time to do anything else. After some time, you may lose the love and passion for what you are doing.

What is the benefit of resigning from a paid job when you have to become a slave in your own business?

So what should you do about this…

There is a one golden rule you must know when running a business.

Working for yourself is harder than working for someone else. Therefore, if you are the one doing all the work in your business, then you have NOT started running a business; you’re only working in your business. These businesses don’t scale.

Anyone that wants to succeed in any business must have the ability to replicate themselves. While you start at the infancy stage as the technical person, you must possess the skill to train people to be like you.

The earlier you take your hands off the technical part of the work, the faster you will begin to succeed in that line of business. You need to be able to go to sleep and know that your business is running. You need to be able to step back and look at the business (as a Strategist) and tell what process, strategy or operation needs to change.

Your business process must be very clear to you and everyone working with you. First, remember you will start the business all by yourself as a technical person. But once you start having clients (your hands have started getting full), you need to hire. At this stage, you have moved from infancy and you need to put these 2 things in mind.

1. Replicate yourself (Ability to train your employees):  You need to invest time in the development of your team members. You need to be able to spend time to make your team members/employees possess your competencies. That way, when a job is delivered, your client only sees your blueprint. 

What we have noticed is that people are always worried about teaching people their skills, thinking that they will not stay long enough with them and might take their ideas elsewhere and replicate it. While that might be a valid concern, the truth is that most serious people stay long enough while they are still tapping from your wealth of experience. So all you need to do is to be able to use the “train the trainers” pattern to teach your new hires to become trainers. By this, you don’t have to be the one teaching all your members. Those who have joined your team today can start the learning process from those that have been in your system months earlier.

1. Create a System (Clearly Defined Processes): The reason you want to replicate yourself is so that your business can offer consistency in its output and delivery to clients. You cannot replicate yourself easily if you do not have a system in place that would be operated with little training. Your business must have all your procedures documented – simple steps pasted on the visible places. This way, employees get to work the way they love to; with little supervision. All you have to do is to monitor compliance and you can spend time doing what you love.

Why do you think the banks and most corporations always have academies/training schools and days for induction to learn their processes before you begin the actual work? The academies make you wired into their processes and culture for seamless execution.

For better understanding of this topic; grab the book “The E-myth Revisited” by Michael Gerber.

Thank you for your time. I hope this was valuable.