Sorry for the downer title. Obviously, plenty of first-time business owners end up finding success, but it’s far more likely that your first business is going to result in failure.
The bright side is, if you understand why this is the case, you’ll be able to better prepare yourself and potentially avoid some of the pitfalls of first-time business ownership.
Even if you do eventually fail, being prepared for that outcome will take the sting out of the experience, and set you up for even better chances of success later on. Some of the biggest names in the business community, from Bill Gates to Walt Disney, and even Steve Jobs, failed in their first businesses before becoming the super successes that they did.
So why is it that your first business is likely to fail?
1. You (probably) aren’t an exception. There are a number of variations on the exact statistic, but most sources agree that the vast majority of businesses eventually fail. Some claim that as little as 4 percent of businesses survive for more than 10 years, with more than half perishing in the first couple of years of operation. It’s comforting to believe that you’re the exception to the rule, or that you’re more likely to succeed than your contemporaries, but the statistics suggest this isn’t really the case.
2. You’re inexperienced. There’s a reason more experienced professionals make more than amateurs — experience yields skill and knowledge. If this is your first time starting a business, you won’t have any prior experiences to draw upon when making decisions, establishing a direction, or facing harsh challenges. It’s true that other experiences in your life — such as holding a position of leadership, navigating the industry in a lower-level position, or even working with other entrepreneurs — can substitute as some level of experience here, but until you’re in the driver’s seat, you won’t know what it’s really like to run a business.
3. You won’t take risks. First-time entrepreneurs tend to be more conservative than their more experienced counterparts. This is partially due to first-time entrepreneurs’ lack of confidence, which stems from a lack of experience. It’s also partially due to the fact that first-timers have access to fewer resources than their more…