No one likes to fail. However, if you own a business (or have had other businesses), you know that most businesses end in failure. In fact, according to the U.S. Bureau of Labor Statistics (BLS), nearly one in five businesses fail within the first year, which is an astonishing figure.
With 32.5 million small businesses across the country, many will undoubtedly fail for a variety of reasons, including financial constraints, workforce issues, and owner burnout. Furthermore, according to a recent Lending Tree analysis, businesses that fail can widely vary based on location and industry.
I innately identify as an entrepreneur. I see voids and problems in the marketplace that offer opportunity and I’m wired to take risks to solve them. I have had several businesses—some incredibly successful while others have died on the vine. The last business, which I raised money for, was killed with COVID. That’s sadly the life of an entrepreneur most people don’t showcase.
I was never a cheerleader in high school, but over the last few years I have evolved into an unapologetic pom-pom shaking, cartwheeling champion for all entrepreneurs who are brave enough to take the leap of faith to try and create something amazing from nothing—especially through my Forbes column where I cover all things luxury lifestyle including founder stories.
While I would love nothing more than for all entrepreneurial underdog stories to end in a pot of gold and the next Google or Tesla—that would be disingenuous for me or anyone else to hope for. For every success there is a failure—or more like thousands. So, what have I learned from my numerous failures as an entrepreneur?
Below are my top six lessons.
Scared Of Risk? Turn Back Now.
The old saying is that with no risk there is no reward. But taking risks is well—risky. They sound bold and aspirational in late-night brainstorming sessions. But when you have to wake up the next morning to address the real-world consequences of taking them, it’s an entirely different reality that makes most people understand what a panic attack actually feels like. Winning big when you take enormous risks is one of the greatest feelings in the world. On the other side of the coin are the many more who have lost just as big. Are you emotionally and financially prepared for those stakes?
It’s said that new businesses take around 2 years before you actually see any profit. Most of us are not going to get investors in those first 2 years, and the days of fast and loose money are far behind us. So, are you willing to put your own money on the line, or your retirement savings, and go without paying yourself while working 12-16 hours a day, all with the chance that you may not see a cent in return, or worse rack up debt that can follow you for years? If you aren’t, then the proverbial road less traveled may not be the route for you. Before you quit your job: think hard about whether you should turn back now.
Are You Willing To Sacrifice Everything?
Anyone can incorporate a company. But being a successful entrepreneur requires a level of sacrifice that is often at the expense of everything else in your life. People tell you about the sacrifice and you may hear the words, but words don’t really convey the reality. Be prepared to kiss your free time goodbye. You will work, eat, and sleep. Wake up. Rinse and repeat.
Not only will you sacrifice time, but you will also need to be willing to sacrifice your personal resources. And guess what? All of these sacrifices come with a price, the most important of which includes not having time for relationships, whether they are romantic, platonic, or even reacquainting yourself with yourself. Your husband, wife, partner, and children may resent you for the time you choose your business over them. If you can’t sacrifice pretty much everything you have, your romance with entrepreneurship might be better served sticking to what’s tried and true.
Legal Issues Are Expensive
Let me be crystal clear on this one: legal battles are expensive. And you cannot go into business without getting into one eventually.
As much as you may be inclined to fight every injustice that happens to you in business, as an entrepreneur you need a genetic predisposition to know how to pick your battles wisely. Whether people owe you money or renege on contracts that you thought were bulletproof in the end, if you do go the legal route, you will likely see cents on the dollar on what you’re owed if anything at all. The lawyers and the courts—and of course the bad guy (or gal) who put you in the situation in the first place—are truly the only ones who win.
In the past few years, I have been fortunate to win some cases where the odds were stacked against me. But winning took time, money, and in some cases incalculable emotional resources. If you think entrepreneurship and starting a company is all about dreaming big and not about the law, you’ll eventually face a harsh wake up call. And if you’re not prepared to pick your battles and shell out thousands of dollars to recoup pennies on the dollars when you do go to the mat, you’ll lose. Eventually unscrupulous people do get what they deserve. But going legal is brutal. And in the start-up world, it is eventually unavoidable.
We’ve all read profiles on successful people reflecting on their early entrepreneurial careers and most of them like to say that their greatest lessons were learned through failure. What most of them don’t tell you on the other side of success is that failure sucks.
Sure, while there may be some pearls of wisdom to be gained once you wade yourself through the process—that doesn’t pay the bills, nor make you feel any better as you work through the heaping pile of emotional bludgeoning. Your ego will be crushed. Your faith will be tested. And if work is your identity, you will feel completely lost. Also expect to work through failure on your own. All those people who loved being around you and wanted a piece of you while you were flying high will most likely be nowhere to be found—especially since failure is often perceived as contagious.
The Longer You Buck The System, The Harder It Is To Gain Access
Here’s the kicker. The longer you buck the conventional corporate system as a start-up entrepreneur the odds of parlaying your years of varied experience into a nice, neat little box—otherwise called a job—become less and less. As a 47-year-old woman who has never had a corporate gig, but has seen success, failure, and knows how to work hard and smart to create something from nothing—it’s sobering how little those skills are valued in the conventional job market. Recruiters want to see resume consistency; not risk taking. Companies want to know if you can toe the line; not think outside of the box. We talk about diversity in every aspect of our lives these days. But diversity of business skills—which is the essence of entrepreneurship—doesn’t seem to have much value in the corporate structure.
Should You Find A Job…
As a parting note, should you find a job most likely it will remind you that you should be working for yourself. As grateful as you may be to have a steady check your new gig will most likely not live up to your expectations. I guess there really is no such thing as a “dream job” kind of like the other fantasy you are told about finding “the one” to live your life with. But, once you work for yourself despite all the sacrifice that it requires, working for someone else will be the hardest thing to adjust to. Luckily, this time could be looked at as an opportunity to regroup and to dream up your next big move.
In the end, being an entrepreneur isn’t easy. But the flipside also comes with its challenges. The most important part is to choose the path that most aligns with your true self. Whether that choice is owning a business or working for someone else, only you know the answer to that question. But like all choices in life, they have consequences, so choose wisely.
Note: A version of this article was previously published on Forbes.