Roughly 50% of new businesses fail within the first 4 years. The most common reason why new businesses fail is because business owners try to do everything and end up burnt out.
This is because new entrepreneurs focus on technical things instead of focusing on running a business. To avoid this, you need to know when it’s time to change your approach.
The most common startup story
Most entrepreneurs, like you, start their career as an employee.
You are very good at what you do but one day you get tired of having someone else take all the profit for your work.
So you decide to start your own company and do the same work you do now. Only this time, you don’t have to share the profit or work for a wage. Everything you do, you get to keep.
Because you are the technician, the soul of the business, you can personally vouch for quality as you’re the one delivering it.
A year passes and the business is doing great. Clients are happy and profit is good. But there’s problem: the business is so good and there’s so much work, you need to expand. This is where the troubles start.
You, who are primarily a technician, now also have to be a manager. You need to hire somebody, teach and delegate work, and plenty of other things.
Somehow, you find your employee #1. Employee #1 is also a technician but they learn how to do other things too. They take care of half the things in the company (like accounting, hiring others, etc.) while you keep delivering on the technical work.
As amount of work grows, so grows the number of employees. But as new people come, work becomes sloppy and isn’t up to your standard.
So you spend most of your time correcting mistakes and nitpicking. Others resent you for it but you’re the boss. Slowly, you start to hate what you do and think to yourself that criticizing others isn’t what you started the business for.
Somewhere along, your employee #1, your key player without whom you can’t function, gets a better offer and leaves. You end up having to single-handedly run the business you don’t know much about anymore because half the know-how just leaked out of your company.
You feel burnt out and you don’t have the energy to deal with managerial issues. Clients push you for quality, employees push you for time, and your private life starts to crumble.
You try to please everyone but it doesn’t work. You keep dropping the balls and feel that something’s gotta change.
Your three options
To sum up: you feel burnt out, lost, disillusioned, and betrayed.
What to do?
“In any situation in life, you only have three options: you can change it, you can accept it, or you can leave it. What is not a good option is to sit around wishing you would change it but not changing it, wishing you would leave it but not leaving it, and not accepting it. It’s that struggle, that aversion, that is responsible for most of our misery.” - Rainn Wilson
You have three options:
- Accept it: try to do the best you can with what you’ve got and feel miserable every time you get out of bed
- Leave it: close the business and return to doing technical work as an employee or a freelancer
- Change it: rethink your business and your role, and build something better, smarter
Accepting it and leaving it are pretty much straightforward options. But changing it requires a much bigger effort. If you want to change your business, you first need to change how you think about business itself and where you fit in.
You can continue reading about how to make sure your business can grow here.
Other posts in the series on growing a business
- Part 1: Why entrepreneurs burn out
- Part 2: How to make sure your business can grow
- Part 3: How companies grow and die (Adizes lifecycle)
- Part 4: Setting up a self running business
- Part 5: Introducing processes
- Part 6: Staying relevant
- Part 7: Staying profitable
- Part 8: How management changes (Greiner's growth model)
- Part 9: When to hire first project manager
- Part 10: A practical approach to risk management
- Part 11: Identifying key players
- Part 12: What happens when a key player leaves
- Part 13: Leadership pipeline
- Part 14: When to hire first HR manager
- Part 15: Contractor vs full-time employee
- Part 16: Hiring process for growing businesses
- Part 17: How and where to find talented employees
- Part 17: Hiring advice for growing businesses
- Part 18: Systematic onboarding
- Part 19: Avoiding toxic workers
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Total Business Re-Configuration
Management and You
Crash Course in Talent Management