Half of new U.S. companies fail in their first five years, according to Gallup. Expand the timeframe out to 10 years and the failure rate reaches 70 percent. Anyone can declare themselves an entrepreneur. No qualifications are required.
Without the proper skills, though, entrepreneurs often make five mistakes that can put their business at risk:
1. Insistence on autonomy: In the startup phase, the company is all about you. Your fingerprints are on everything, and there is very little you don’t know and aren’t directing. After this phase, an entrepreneur’s insistence on autonomy can hinder the company’s ability to respond quickly and intelligently to challenges it faces. In the growth phase, you simply can’t do it all, and it’s foolish to keep believing that you can.
2. Unwillingness to build structure: Entrepreneurs need to surround themselves with a strong executive team—or, at least, a steady right-hand individual—to ensure the company’s success. Too many business owners fail to create the kind of structure that produces good leadership decisions within a managerial team.
3. Lack of financial leadership: Entrepreneurs by definition take risk when they make the decision to start their own business. Those who are not financially literate need the direct support of a financial expert to ensure they receive the advice and input needed in their organization.
4. Inability to tolerate boredom: While starting a business is exhilarating, the day-to-day operation of it may pale in comparison. Some entrepreneurs either start new companies or abruptly make changes in their current companies to keep their own level of excitement high, which creates significant trouble for the business.
5. Failure to engage in self-examination: Be aware of your own strengths and weaknesses—the same things you gauge in your employees.