Top 5 Reasons ex-Corporates Fail In Their Own Business – The Sad Truth!
Unfortunately, I see it all too often. People leaving their jobs, starting their new exciting business and then only a few months later, they’re either back in their jobs or doing something else because the first business didn’t work out. The interesting thing is I see more businesses fail from people who come out of the corporate world than those that are simply business driven by nature. So whats really going on here?
Looking back at my own experience, I was ‘trained’ in corporate around marketing and sales and you would think that naturally this would be perfect training in business should I have wanted to become an entrepreneur right? Wrong! What I was being trained in were old fashioned, big business way of doing things that had little or no relevance when it came to running a small business.
It may explain why I struggled so much when I left the corporate world many years ago, the biggest hurdle was trying to ‘unlearn’ what I had been taught, so that I could equip myself with the ‘right information’ that would serve me in my new career.
I’ve spoken to thousands of people over the years that have gone through such changes and its interesting to hear the reasons why they struggled and what caused them to fail as well. Here’s my top 5 reasons ex-corporates fail in their own business. You may resonate with these and I’d love to hear your thoughts once you’ve read this article.
1. Having the same spending habits from the corporate world – can result in burning cash quickly, resulting in major cashflow issues and going into debt which puts you on the back foot straight away. I learnt with painful experience to curb my spending habits, as I burnt a lot of cash very quickly when I first left my corporate job. I was lucky to get a small payout when I walked away, but because of my extravagant habits this didn’t last long and I always wish I had the foresight to be able to have done better with my savings back then. However we learn through our mistakes and if you’re reading this, then remember that every dollar is precious when you’re out on your own building your business. Be wise, frugal and conscious on where you spend/invest. You worked hard for what you have. Don’t let some bad habits blow it all away!
2. Not having access to the right support and guidance – will result in your business stagnating or failing, because you don’t have a nurturing environment to support you. In one of my consulting gigs I did outside of the corporate world, I was on the road quite a lot seeing clients and I got caught up in my job trying to beat the odds, win more clients and make more money. What I didn’t focus on was having the right support and guidance I needed to get me through the tough days and also to map out a plan for how I was going to achieve my goals. It was a lonely journey where I had to stay self-motivated as I was out on my own each day dealing with rejection, endless calls, presentations and playing the waiting/follow-up game. If you find yourself in this situation, do yourself a favour and go out there, find a group of like minded people who you can learn, leverage and lean on for support to keep you on the right path and help you make better choices and stay on top of your game. Invest in a good business program that supports you, get a business coach – you’ll never regret it. Another lesson learnt!
3. Jumping into a business emotionally without a clear strategy – can waste a lot of time and money and leave you feeling disappointed, frustrated and broke! It’s not uncommon to find people who’ve left their corporate jobs in a frenzy to get away from a bad situation perhaps in a fit of rage, after being disappointed yet again, or perhaps they’ve just had enough of their boss, and not wanting to put up with the stress, politics or pressure and anxiety that comes with their position anymore. It could even be a situation where a change in company policy or culture suddenly doesn’t sit well and causes values to be mis-aligned – this is another reason why people find themselves quitting. My reason for leaving corporate was actually not of my doing but by being forced out through being made redundant, due to corporate restructuring – something thats all too common these days. Once it hits you that your job is over, you can act a little irrationally and jump on opportunities out of sheer desperation. One way to protect yourself from this is to have some sort of backup plan, or plan B and take the time to evaluate each option before leaping blindly.
4. Investing in a business with little or no background – makes the learning curve very hard and just prolongs getting the business off the ground. So often I see people jumping into an opportunity or investing large sums of money into a franchise or opportunity where they have very little or next to no knowledge about and are being sold the idea by clever marketers. Unfortunately what happens is that being ill equipped to deal with running a business to begin with, let alone one in a completely different industry with no experience, ultimately leads down a path of failure. For example I have seen friends open restaurants, cafes, run cleaning franchises, etc. and have invested tens if not hundreds of thousands of dollars upfront, especially in commercial shopping centres only to find themselves behind the eight ball and struggling to pay the rent and break even even after several years. I always suggest doing your due diligence and assess every opportunity. Do you have the skills and competency to be able to run that business or find the right people to work? Are there opportunities that are less capital intensive? Look at all options carefully. The risk if you don’t is that you leave yourself extremely vulnerable and exposed and its very long hard road from then on. Often not knowing what you’re doing in business means your business very rarely gets off the ground, it could take years to make a profit. Leverage your skills and background – and partner with people who have skills in areas you don’t, so you are nicely balanced.
5. Holding on to that sense of ego and pride from the past – can form a false sense of security and accomplishment, undermining your business and ability to be coached. Many ex-corporate business owners still carry a bit of ego with them. It’s understandable because they may have been very senior people in their past corporate careers. I know GM’s, CFO’s, Directors, Senior Managers, etc. who managed large teams, travelled business class and were highly regarded in their corporate career, and they carried this sense of pride and ego into their new business. Don’t get me wrong – confidence is a great trait to possess and self-confidence is an asset. Unfortunately believing you are successful in business based on your previous success from the corporate world is a just setting yourself up for failure. It’s a false sense of security. Better to be humble and accept that you’ve climbed down the corporate ladder only to begin the climb on a new ladder in business – and its going to take time, effort and patience as you develop and begin to achieve success.
What did you learn from your experience leaving the corporate world and starting your business? Reply below to leave a comment. We’d love to hear your thoughts, as your insights can help many others just like you. Best responses will get shared on our Facebook page. We look forward to hearing your feedback!
Gavin Sequeira is the author of the much acclaimed book ‘Break Free From Corporate’. Make sure you get your copy today to kickstart your transition from corporate and into your business. If you would like to contribute, please contact us through the “Contact” page and we look forward to connecting with you!