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Why do so many entrepreneurs fail?

In my Rich Habits Study, 51% of the self-made millionaires were entrepreneurs, meaning they made their wealth starting and running their own companies.

Thanks to my Study, I not only learned what the rich did to get rich, but I also learned about all of their mistakes.

And there were a lot of mistakes.

I thought I’d share some of the lessons these self-made entrepreneurs were kind enough to share with me:

Partners

Pick Your Partners Very Carefully

Success is much easier when you have great partners.

Failure is inevitable when you have bad partners. In any new venture pick partners who know what they are doing, have little baggage, have a positive mental outlook, are success-minded, and have a hard work ethic.

Pick partners who have been there and done that.

Never go into any new venture unless your partners have real-world experience in that industry.

Success Requires Risk and Sacrifice

You cannot succeed without taking risks and making sacrifices.

The sacrifices you will have to make are many.

The most significant will be time away from family and friends.

Gut

Trust Your Gut

By gut, I mean your subconscious mind.

Your subconscious mind picks up things that are otherwise invisible to you.

Always listen to that voice in your head.

It is your gut telling you what to do or what not to do.

That voice becomes loudest when your emotions are at their greatest.

Success Takes Far Longer Than You Expect

Success takes a long time.

Far longer than you expect.

See Rule of Three below.

Stress

The Pursuit of Success is Very Stressful

Things will go wrong.

When they do, they create enormous stress.

That stress affects you, your loved ones, and your business partners.

It will negatively affect your health unless you mitigate it by exercising every day.

Fund Your Business with Your Own Money

When you are the source of your working capital, you are in control.

When you depend on others for your working capital, they are in control.

You will have to do what they tell you to do.

You are their slave.

Rose Colour

Assumptions Have No Value

Assumptions can cause you to look at things through rose-colored lenses.

Most assumptions in a business plan are wrong almost 100% of the time.

Always pilot test every assumption before you accept it as fact.

The Pursuit of Success is Exhilarating

There will be ups and downs along your path toward success.

More downs than ups.

But the ups make it all worthwhile.

Good Luck

Success Requires Good Luck

In the pursuit of success, unexpected things happen.

Sometimes they are good and sometimes they are bad.

To some extent, success and failure are outside your control.

Luck plays a critical role in success.

Failure is Humbling – It Can Drag You to Your Knees

Failure is an emotional experience.

It can take the financial legs out from underneath you and your family.

It can destroy your life...

Overcome

You Must Overcome Adversity

Obstacles, pitfalls, wrong assumptions, mistakes, and the unexpected can stop you in your tracks.

Sometimes you can overcome those hurdles and sometimes you cannot.

Those who succeed are able to overcome adversity.

Those who are unable to overcome adversity, fail.

Be in Control of Your Business

Control means owning more than 50% of your business.

Those who have ownership control of your business, control your business, your future, and your life.

Pilot Every New Idea

Test new concepts first before diving full-time into any venture.

Dive full-time only when the business model has been proven to work.

Savings

Have Fallback Savings

In every start-up, things will go wrong.

Make sure you have set aside funds to help you and your family survive if you fail.

Understand the Rule of Three

It takes three times as long as you think, costs three times as much as you expect and revenue and profits will be one-third as much as you anticipated.

Business Plans are Worthless

Business plans are not worth the paper they are written on.

Never go into any venture solely on the basis of a business plan.

Marriage

Have a Powerfully Strong Marriage

If you are married, make sure you have a strong marriage before pursuing any venture.

If you have a weak marriage and things go wrong, it can jeopardize your marriage.

Go Lean

Don’t hire anyone.

Use subcontractors.

Don’t rent.

Work out of your home.

Only hire employees when you are succeeding and the business model has been proven to work.

Work out of a shack if you have to until you have a steady revenue stream.

Keep in Constant Contact with Your Network

Pursuing success demands a great deal of your time.

It’s easy to lose contact with your friends and former colleagues.

Don’t ignore your relationships.

You will be calling them to help you find a job if the business fails.

About Tom is a CPA, CFP and heads one of the top financial firms in New Jersey. For 5 years, Tom observed and documented the daily activities of wealthy people and people living in poverty and his research he identified over 200 daily activities that separated the “haves” from the “have nots” which culminated in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals. Visit the website: www.richhabits.net
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