Entrepreneurs are National Treasures
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What follows is totally new thinking regarding the nature of entrepreneurial success and failure. This is neither an attack on more traditional thinking, nor a rebuke of agencies, educators, and other accepted authorities on the subject of entrepreneurship. Instead, this is a journey into the more personal aspects of entrepreneurship and a new perspective on solving a difficult problem. In a nutshell, this article embraces the idea that entrepreneurs are national treasures.
There are two widely accepted reasons used to explain why small businesses fail. One is an inadequate understanding of the business; the other is insufficient capital to sustain the venture. While those factors contribute to failure, there is a more basic cause of failure (and success); one that is far more powerful than knowledge or capital. Any venture can be shoe-stringed financially, and the processes required to run a business can be learned. Therefore, accepted theory is not our resting place.
Let’s begin with an often-stated statistic. At least 50% of all new businesses fail before they are five years old. Most of us accept that number without taking to heart or appreciating the true meaning of that statement. It’s a horrifying situation for the entrepreneur, but rarely considered by those who haven’t been in the actual trenches of start-up and perseverance.
Numbers rather than percentages often take on greater meaning. For example, over the last several years we’ve averaged around 700,000 start-ups per year and at any given time, roughly that number of start-ups are in the processing of failing. That is a huge number by any standard. (Note: in 2010 there were an estimated 28 million small businesses in the U.S. – https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf).
The next step is to calculate the amount of humanity with which we are dealing. If 700,000 start-ups are failing at any given time, focus on the size of that population. At least one person is depending on each of those businesses for income, but if we include the owner’s family and/or additional employees we can easily multiply the number of people impacted by a failing business. That’s a population well worth saving. If a city of 700,000 to 1,000,000+ people was in a death grip, a state of emergency would be declared and sufficient forces would be mobilized to fix whatever was wrong.
Think about how many bank accounts are wiped out, how many families are torn up, how many health problems result, and literally how many lives are lost. What is the net cost to society as a result of the problem? And finally, what are we doing about this tragedy? The answer: very little. This is the reality of entrepreneurial failure versus success.This is the reality of small business start-ups.
Entrepreneurship is our economic lifeblood and the foundation of our hiring future. We strive to help businesses in general, but on an individual level, those on the verge of failure are courageous souls who basically face the world alone. We offer great assistance to the unemployed and the needy, and that is proper. But our entrepreneurs are valued commodities that deserve care and nurturing.
Next we’ll take a look at the players involved and begin to flesh out why traditional thinking needs an adjustment.
Part Two »