Chapter 5: Fears and Barriers to Entrepreneurship
Entrepreneurs, despite their positive mindset, often encounter fears and barriers that can hinder their progress towards their goals. The most common fears fall into the following categories: failure, stress, risk, and ego. We are all different, so some of these fears may be more prominent than others and, of course, there may be others to add to this list. While everyone is unique and has their own fear, let’s look at some of the most common fears that entrepreneurs have and examine ways to overcome them.
Failure
Failure is something to be cognizant of as an entrepreneur. Failure is subjective and can vary from person to person. Perspectives and statistics on the failure rate of entrepreneurial ventures differ because of this. Similarly, failure can also vary for each business. It can mean that a business doesn’t make enough money to pay its bills, leading to its closure. Poor marketing initiatives, inadequate management, financing hurdles, and poor business planning can contribute to this, among other things.
However, there can be other reasons as well. Many businesses close while being profitable and financially healthy. Failure can also mean that the business is no longer operating, but it doesn’t provide information about the reasons behind it. It’s important to note that a business must make money to survive, so a true business “failure” could be the inability to cover expenses.
On the other hand, businesses may close for other reasons, such as retirement, selling to someone else, or closing to start a new venture (Headd, 2018). These reasons tell a different story than low sales or lack of funding.
Harvard Business Review wrote more about the topic: How Fear Helps (and Hurts) Entrepreneurs (hbr.org)
Business Failure Statistics
Based on the Bureau of Labor Statistics, only 50% of businesses survive for five years or more, and even less, 33%, make it past the ten-year mark (Chamber of Commerce Team, 2024). These statistics highlight the difficulty of starting a business. There are numerous obstacles that make it challenging to succeed, far outnumbering the factors in their favor.
Entrepreneurs don’t want to start something that will intentionally lose money. However, it is important to note that the various statistics on failure may differ because of the different definitions of failure and the tendency to group all businesses together. Comparing a space exploration startup to a local bakery are two completely different businesses in two completely different industries.
Trough of Sorrow
Before a venture fails and closes its doors, or before it picks itself off the ground and succeeds, many times the entrepreneur will go through a hard time known to many as the Trough of Sorrow. The Trough of Sorrow is a feeling that entrepreneurs get where they feel burnt out or have depressed feeling. See Figure 5.1 for an illustration on the start-up curve. The first adrenaline rush has worn off from the la