Three out of every four new businesses fail within their first 15 years of operation. One out of every five shutters after only one year. Nearly 850,000 new businesses opened between March 2020 and February 2021; almost 170,000 are projected to fail before reaching their second year of operation.
The chances that a startup will thrive can be a little discouraging. Developing competitive advantages can help entrepreneurs beat the odds and improve their chances of success. It takes time and effort to develop an entrepreneurial mindset that will see you through tough times. Do you have what it takes? This article can help you take stock.
Timidity has no place in entrepreneurship: failing to forcefully believe in your vision and fight for its survival is a surefire way to torpedo your business. Aggression has negative connotations—and it can be used negatively in entrepreneurship—but at its core, aggression is about not giving up and having the courage to challenge the status quo.
Successful entrepreneurs understand that change doesn't happen by following the rules. Those who want to disrupt an established field with a new invention or service won't reach the top by being meek.
Entrepreneurs have more data at their fingertips than ever before, for good and bad. What they do with that data, however, can have a direct impact on their business's success or failure. Learning early how to collect relevant information, understand its value, and make informed decisions based off analysis can set good entrepreneurs apart from successful entrepreneurs.
By mastering an analytical approach, new business owners can engage in the type of critical thinking needed to solve complex problems – be they around finding funding, adjusting prototypes, or handing a new, competitive entrant to a shared market.
Without confidence, the world would have far fewer entrepreneurs and startups. Believing in yourself and your idea is critical to the entrepreneurial mindset, as those lacking confidence are far more likely to give up at the first hurdle—and there will be many hurdles. Rather than letting fear or self-doubt take over rational thinking, confident and successful entrepreneurs know others will follow their lead if they believe in the concept.
Confidence does have a shadow side, and successful entrepreneurs must find the balance between believing in themselves and their business and becoming a narcissist.
Making decisions with confidence and efficiency is essential in a situation where many crucial decisions must be made regularly. The most successful entrepreneurs know that dithering around decision-making or letting analysis paralysis win can create distrust in investors and employees alike while also stalling momentum.
Rather than letting perfection be the enemy of progress, effective business owners focus on continuing to move forward through strong decision-making while understanding that some changes or tweaks may be required along the way.
Startups famously evolve during their early days; even established businesses must be able to nimbly respond to market shifts and changes in customer preferences. Part of embracing the entrepreneurial spirit involves maintaining flexibility and accepting that change is inevitable, despite best-laid plans. New situations may call for new skills or a new business plan.
For instance, you may initially feel that your business does not need a brick-and-mortar location, then, market research and sales reports show otherwise. Rather than sticking to the original plan despite clear data, a flexible entrepreneur rolls with the changes.
With so many distractions in today's world, staying focused on the mission and long-term goals of a startup can greatly benefit aspiring entrepreneurs. While paying attention to what your competition is doing helps you maintain a competitive advantage, it can also distract you from getting the job done. Entrepreneurs must find the fine line between focus and tunnel vision to succeed. It can take time.
Successful entrepreneurs know how to say "no" when necessary to keep themselves focused on the prize. There will always be many things to distract from the goal or sideline you from important work, so learning this skill early on can be greatly beneficial.
As the COVID-19 pandemic taught us, it's impossible to anticipate everything the future holds. While some events are easier to plan for than others, maintaining a future-focused mindset can help entrepreneurs anticipate changes and respond to them more effectively. Embracing forward thinking involves looking at your small business and figuring out how to plan for changes that may come.
Paying close attention to industry trends and perspectives of other leaders in your field can also help you identify shifts in thought and start making appropriate changes to your business model.
Innovation plays a critical role in entrepreneurial thinking. The best entrepreneurs know that new ideas come from many different sources. Diverse perspectives from investors, employers, and customers can help identify opportunities for new ventures within an existing company and demonstrate adaptability in offerings.
Rather than limiting yourself to ideas that only you can envisage, make time to speak with others and learn from them. There may be real-world issues your company can help address, but you may not recognize them if you don't keep open channels to outside sources.
Ask any entrepreneur about their experience running a successful business and they will likely tell you it takes a certain amount of risk tolerance. While some may view this as bordering on negligence or unnecessary peril, a healthy level of risk tolerance can actually improve the likelihood of entrepreneurial success.
A fear of failure helps entrepreneurs drill down on their ideas to determine likely viability. If you have much of your life's savings on the line—or significant investments you must pay back if your idea fails—you're far more likely to thoughtfully consider associated risks with your concept.
Owning your own business means you lack a boss telling you what to do and when to complete tasks. Entrepreneurs like Amazon founder Jeff Bezos understand that self-motivation is one of the most important skill sets of success. Those who fail to keep themselves moving forward are likely to become stagnant.
Especially in the early days of a startup (when the founder may be the only employee), self-motivation can make the difference in whether a new business fails or thrives. Self-motivation matters both in large and small areas: knowing how you want to spend your life is just as important as knowing what you need to do upon waking each morning.
Rather than focusing on problems, solution-oriented entrepreneurs always look for ways to improve issues and get back on track. Entrepreneurs who keep a positive attitude when challenges arise know that setbacks are typically short-lived, but embracing a problem-solving mindset can provide long-term benefits.
To embrace this skill effectively, entrepreneurs must challenge themselves and those around them to think strategically, avoid excuses, and stay focused on outcomes rather than causes.
Wondering how to develop an entrepreneurial mindset? You have options. For some types of entrepreneurs, self-education allows them rich learning experiences that inform how they run their businesses and make decisions.
Others decide to pursue an MBA before creating their startup to develop a rich foundation of traditional business skills. Given that some business schools now provide MBAs in corporate innovation and entrepreneurship, students can focus on learning skill sets tailored to their objectives.
Some students, after considering the required cost and time commitment, decide against an MBA in entrepreneurship. Instead, they decide to target their education by taking online classes that build new entrepreneurial skills. Many schools now provide in-person and online coursework on entrepreneurship that allow learners to focus on topics that help them launch and run a successful business.