What Characteristics Lead to an Entrepreneur's Failure?

Unrealistic expectations on the part of entrepreneurs cause frustration and impatience.
Unrealistic expectations on the part of entrepreneurs cause frustration and impatience. (Image: Pinnacle Pictures/Photodisc/Getty Images)

According to a study by Inc.com, 80 percent of new businesses fail within the first five years. While this is a grim statistic, knowledge is power. In other words, examining the forces that led to a company’s demise provides valuable information for sidestepping these avoidable pitfalls in the future. Many owners of failed businesses share common characteristics or flaws that played pivotal roles in their downfall.

Impatience and Impulsiveness

Hastiness is the order of the day for entrepreneurs who are impatient and impulsive. These individuals display a dangerous level of restlessness. They throw caution to the wind and make decisions based on whims. Impatient and impulsive entrepreneurs are intolerant of delays because they need immediate gratification from their investments. Instead of fine-tuning problem areas, they twist, tug, pull, and yank in pursuit of their desired results, failing to realize that when a business is in its incubation period, proceeding slowly and steadily is the best course of action.


Overly confident entrepreneurs have an unrealistic view of their abilities to generate and sustain business growth. They flippantly dismiss the cautionary tales of others and view the warning signs of trouble in their own businesses with nonchalance because they are convinced of their invincibility. Overly confident entrepreneurs have an exaggerated view of their businesses, which leads them to overvalue the strength of their business plans, overrate their abilities to obtain funding and overestimate the demand for their products or services.


Some entrepreneurs have no point of reference from which to start their businesses. As a result, they are unfamiliar with the marketplace, have no experience operating a business and are ignorant of the rigorous financial, emotional and physical demands of entrepreneurship. According to the Small Business Administration, “entrepreneurial research and preparation can significantly reduce failure rates by as much as 50 percent.” Failing to thoroughly investigate every aspect of the business venture or consider the personal investment required is a costly mistake. Business Pundit states, “As an entrepreneur, you will find that the work load never ceases, no matter how many hours are in the day, or how many employees you bring on for assistance.”

Quitter Mentality

Entrepreneurs with a quitter mentality give up easily when they encounter resistance or setbacks. They lack the tenacity to keep going in the face of hardship. This is a primary characteristic that separates those who fail from those who succeed. According to the article “Seven Reasons Why Entrepreneurs Fail” (wisdomdigest.org), “having unrealistic expectations can turn an energized entrepreneur into a depressed one at the first sign of trouble.” Throughout history, most--if not all—well-known entrepreneurs experienced hardships on the path to success. Refusing to abandon ship or relinquish their dreams in the face of obstacles is what separated them from the entrepreneurs who failed.

Related Searches


Promoted By Zergnet


Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!