When you started your first business, did you ever imagine it would be a business failure? Most service-based entrepreneurs go into starting their first business with stars in their eyes and a vision of success that doesn’t even consider it won’t go exactly as planned.

Let me let you in on a little secret: It never goes exactly as planned.

According to investopedia, it’s often said that more than half of new businesses fail during the first year.  I’m here to challenge the definition of failure, to help you redefine success and to query what those business failure reasons are due to – so you can avoid them. Are you in? Keep reading!

1) Let’s challenge the definition of failure

Before we can challenge failure, I believe we need to define success. What does it mean to be successful? One of the first exercises I do with my coaching clients is define what their definition of success means. Often it stems from an idea they had when they were young, or a feeling they want to experience, or a brand of car they want to drive (if they admit it) or a lifestyle they envision (more time with family and a recreational property or comfortable home). Once we define these things, it makes it much easier to achieve success – otherwise the bar keeps moving.

According to the US Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first year of being open, 45% during the first five years and 65% during the first 10 years.

The reasons these businesses fail, according to the BLS are:

  1. They didn’t satisfy a need in the market
  2. They didn’t have a good business plan
  3. They didn’t have enough financing
  4. They weren’t in a good location
  5. They were inflexible
  6. They expanded too quickly

What I’m hearing when I read this, is we’re talking bricks and mortar businesses and it’s not based on a personal definition of success; it’s largely based on monetary expectations.

2) What does it mean to be successful: on your own terms?

What if your business were to be successful on YOUR terms? What would that look like?

What if your definition of success looked something like this:

  1. I get to spend more quality time with my kids.
  2. I saved my marriage because we could now spend more time together.
  3. I fulfilled my dream of supporting this cause or personal mission I believe needs to happen.
  4. I was able to have more time freedom in my days to meet my personal needs.
  5. I may have made less money, but I’m happier and have more life fulfillment.
  6. I was able to create a location-independent lifestyle that invited more excitement and enjoyment into my life.

Would the same metrics of the BLS apply? I don’t think so.

My first takeaway is: Create YOUR definition of success and follow that one, then let’s talk evaluation of whether you’ve been successful or not.

3) What do you need to watch out for, so you can be successful on your own terms?

A great little book called The E-Myth Revisited – Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber was a captivating read for me after I was five years into my first business. He seemed to be reading my mind! Truth bombs like:

  • Before you started your business, THE THOUGHT OF INDEPENDENCE FOLLOWED YOU EVERYWHERE
  • The realization that every strong entrepreneurial personality HAS AN EXTRAORDINARY NEED FOR CONTROL, and
  • Your business and your life are two totally separate things. YOUR BUSINESS IS NOT YOUR LIFE. Yes, read that again (and say it out loud) MY BUSINESS IS NOT MY LIFE.

So if this sounds like you – read on…..

What kind of entrepreneur are you?

Gerber contends there is a fatal assumption made by technicians (people who have a technical skill they choose to monetize by creating their own business). That fatal assumption is: if you understand the technical work of a business, you understand a business that does that technical work.

The fatal assumption: if you understand the technical work of a business, you understand a business that does that technical work.

Photo by Kate Darmody on Unsplash

Think doctors, hairdressers, bakers, and florists – any possible “Mom and Pop” shop you can think of, and then some, who created a business to sell what they could do – what they were trained in – but didn’t know how to run a business around. You know these people, we all do – they work All. The. Time. They can’t keep staff, they don’t charge enough and they are working their lives to the bone. Because they’re not running a business – they’re selling their wares or skills in exchange for money, without really learning how to run a business.

And they get tired. And they actually don’t really make much money. And do they have time freedom? Or financial freedom? In reality, many of them are trapped in the world they created for themselves, because they didn’t want to work for someone else. Is this you? Is this me? Is that bad? Maybe. Or not. You get to decide. 

What do you want from your business?
Let’s get real – your kind of real.

My kind of real involved not being able to imagine another way for me to fulfill my professional and personal goals at the same time. I wanted more time to raise my young daughter while also contributing my talents in the professional world – for $$.

My kind of real involved a satisfaction that I could be there for my family while also using my years of education and desire to make a difference in the “real” world – as though those munchkins we were raising were not… real? (she scratches head)

My kind of real involved working, on my own terms, and creating a life I loved to life.

In my first business I needed next to no overhead to run my service-based business in the area of communications and public relations. (I didn’t even need a website!)  What we did need to do was cut back expenses in our household (in the beginning), and I needed to use my talents to generate work and deliver it.

I was basically looking for a flexible job – was this really a business?

The government said it was, our bank account said it was, I said it was, my family said it was – would the US Bureau of Labor Statistics say it was? I’m not sure!?

Create Your Aligned Business

What I created – and what I invite you to create – is an Aligned Business.

An Aligned Business is a business that is based on the business owners personal values, that fulfills their personal ambitions, that serves a perceived need in the market and is created on their own terms. – Susan Elford 

HappinessI’m not even asking you to research the market first – although you could – just take your talents and start selling them. See if it works! So many service-based business owners (think coaches, consultants, fitness trainers, realtors and hairstylists) sell their services based on talent and skill yes – and also on personality, on branding and location. How do we know if the market is saturated with talent in these areas? You’re not selling coffee, or groceries – in that case the market may be saturated in certain areas. But what about your area? In some cases, “may the best person win” is the name of the game.

Just like restaurants fall in and out of popularity, so do service providers; perhaps a new concept is offered, a new way of working, a new style, or a new business model.

If you have a business idea you’d like to try – go for it!

An Aligned Business has you make these choices in alignment with: Your Values, Your Vision, Your Talent, Your Skill, Your Way of Being and the Impact YOU want to make on the world.

No one else’s.

It comes back to – what kind of entrepreneur are you? Are you primarily making your decision to go into entrepreneurship for lifestyle reasons or business reasons? If it’s lifestyle – own it. If it’s business – grow it! Or is it somewhere in between? That’s OK too. Understanding the reasons behind small business failures is the first step towards building an aligned business – that is also successful. You are more likely to be financially successful on the terms identified by the BLS if you follow the template. Regardless, you get to decide what success means, not the government, not a business coach, not bizschool… you do.

By applying the insights and strategies learned and tested by business gurus, small business owners can navigate challenges with confidence and steer their businesses towards growth and prosperity – on whatever terms they want.

To your success,

Susan Elford

Susan Elford is a Leadership Coach and Business Mentor who especially loves to work with women who want it all: a fulfilling career or business while living a full and satisfying life. Through powerful career coaching and business mentorship to get their career or business to the next level, Susan helps her clients get real about their strengths and celebrate and promote them so they get more of what they want: success at work; success in business & success in life.

WHAT’S YOUR NEXT BIG MOVE!?

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