THE ENTREPRENEURIAL MIND

GEENT01X – MODULE 2

PBF
TABLE OF CONTENTS

 - Successful Entrepreneurs in the World

 - Successful Entrepreneurs in the Philippines
 - Success of SM Investment Corporations
 - The 14 Work Life Principles of Mr. Henry Sy, Sr.
 - Reasons Why Entrepreneurs Fail
Successful Entrepreneurs in the World

There is a tough truth that any small

business owner has to face. Even in the
best of times, the vast majority of
small businesses fail. Therefore, when
companies are successful and business
empires are grown, the entrepreneurs
behind the success are often seen as
larger than life and captivating. After
all, when so many small businesses fail,
what made them succeed?
Elon Musk
▪ Age: 52
▪ Residence: United States
▪ Co-founder and CEO: Tesla
▪ Net Worth: $222 billion
▪ Tesla Ownership Stake: 13% ($98.1 billion)
▪ X Ownership Stake: 79% ($9.32 billion)
▪ Other Assets: Space Exploration Technologies ($53.2 billion
private asset), The Boring Company ($3.33 billion private
asset)

Entrepreneur Elon Musk has achieved global fame as the chief

executive officer (CEO) of electric automobile maker Tesla (TSLA) and
the private space company SpaceX. Musk was an early investor in
several tech companies, and in October 2022, he completed a deal to
take X (formerly Twitter) private.
Early Life and Education

Elon Reeve Musk was born in 1971 in Pretoria, South Africa, the
oldest of three children. His father was a South African
engineer, and his mother was a Canadian model and
nutritionist.

After his parents divorced in 1980, Musk lived primarily with his
father.
Early Accomplishments

Technology became an escape for Musk. At 10, he became

acquainted with programming using a Commodore VIC-20, an
early and relatively inexpensive home computer. Before long,
Musk had become proficient enough to create Blastar—a video
game in the style of Space Invaders. He sold the BASIC code for
the game to a PC magazine for $500.

In one telling incident from his childhood, Musk and his brother
planned to open a video game arcade near their school. Their
parents nixed the plan
College Years

At 17, Musk moved to Canada. He would later obtain Canadian

citizenship through his mother.

After emigrating to Canada, Musk enrolled at Queen’s

University in Kingston, Ontario. It was there that he met
Justine Wilson, an aspiring writer. They would marry and have
five sons together, twins and triplets, before divorcing in 2008.
Entering the U.S.
After two years at Queen’s University, Musk transferred to the
University of Pennsylvania. He took on two majors, but his time
there wasn’t all work and no play. With a fellow student, he
bought a 10-bedroom fraternity house, which they used as an
ad hoc nightclub.
Musk graduated with a bachelor of science degree in physics, in
addition to a bachelor of arts in economics from the Wharton
School.
The two majors foreshadowed Musk’s career, but it was physics
that left the deepest impression.
Notable Accomplishments

Musk was 24 years old when he moved to California to pursue a

Ph.D. in applied physics at Stanford University. But, with the
internet exploding and Silicon Valley booming, Musk had
entrepreneurial visions dancing in his head. He left the Ph.D.
program after just two days.
X.com
In 1995, with $15,000 and his younger brother Kimbal at his side,
Musk started Zip2, a web software company that would help
newspapers develop online city guides.
In 1999, Zip2 was acquired by Compaq Computer Corp. for $341
million. Musk used his Zip2 buyout money to create X.com, a
fintech venture before that term was in wide circulation.
X.com merged with a money transfer firm called Confinity, and the
resulting company came to be known as PayPal. Peter Thiel ousted
Musk as PayPal CEO before eBay (EBAY) bought the payments
company for $1.5 billion, but Musk still profited from the buyout
via his 11.7% PayPal stake.
Tesla
Musk became involved with the electric cars
venture as an early investor in 2004,
ultimately contributing about $6.3 million,
to begin with, and joined the team,
including engineer Martin Eberhard, to help
run a company then known as Tesla Motors.
Following a series of disagreements,
Eberhard was ousted in 2007, and an
interim CEO was hired until Musk assumed
control as CEO and product architect. Under
his watch, Tesla has become the world’s
most valuable automaker.
Tesla
In addition to producing electric
vehicles, Tesla maintains a robust
presence in the solar energy
space, thanks to its acquisition of
SolarCity. The company currently
produces two rechargeable solar
batteries. The smaller Powerwall
was developed for home backup
power and off-the-grid use, while
the larger Powerpack is intended
for commercial or electric utility
grid use.
SpaceX
Musk used most of the proceeds from his
PayPal stake to found Space Exploration
Technologies Corp., the rocket's developer
commonly known as SpaceX. By his own
account, Musk spent $100 million to found
SpaceX in 2002.
Under Musk’s leadership, SpaceX landed
several high-profile contracts with the U.S.
National Aeronautics and Space Administration
(NASA) and the U.S. Air Force to design space
launch rockets. Musk has publicized plans to Then-NASA Administrator Charles
Bolden congratulating Musk by
send an astronaut to Mars by 2025 in a the SpaceX Dragon following its
collaborative effort with NASA 2012 mission
Starlink
Starlink is a satellite internet constellation
operated by American aerospace company
SpaceX, providing coverage to over 60
countries. It also aims for global mobile
phone service after 2023.
SpaceX started launching Starlink satellites
in 2019. As of November 2023, it consists
of over 5,500 mass-produced small
satellites in low Earth orbit (LEO) that 60 Starlink satellites stacked
communicate with designated ground together before deployment on
24 May 2019
transceivers. Nearly 12,000 satellites are
planned to be deployed, with a possible
later extension to 42,000.
The Boring Company (TBC)
The Boring Company (TBC) is an American infrastructure, tunnel construction
services, and equipment company founded by Elon Musk. TBC was founded as a
subsidiary of SpaceX in 2017, before being spun off as a separate corporation
in 2018. TBC has completed one tunneling project that is open to the public,
as well as a test tunnel.
In 2021, TBC completed the Las Vegas Convention Center, LVCC Loop, which is
a three-station transportation system consisting of 1.7 miles (2.7 km) of
tunnels. As of July 2023, a segment to Resorts World is also open, and tunnels
to Encore and Westgate resorts are being finalized. The system is planned to
expand to a total of 68 miles of tunnels in Las Vegas. TBC also completed one
tunnel for testing in Los Angeles County, California. Many other TBC projects in
cities across the United States have been announced and subsequently
cancelled or become inactive due to a lack of activity from the company.
X

The company was founded in March 2006 as Twitter by Jack Dorsey, Noah
Glass, Biz Stone, and Evan Williams. Originally a private company, it went
public in November 2013. It raised $1.8 billion through its initial public
offering (IPO).
Musk joined the site in June 2009. A frequent poster on the messaging
network, Musk disclosed a 9.2% stake in X in April 2022. The company
responded by offering Musk a seat on the board, which he accepted before
declining days later. Musk then sent a bear hug letter to the board
proposing to buy the company at $54.20 per share.
X
The company’s board adopted a poison pill provision to discourage Musk
from accumulating an even larger stake, but they ultimately accepted
Musk’s offer after he disclosed $46.5 billion in committed financing for the
deal in a securities filing. In July 2022, Musk attempted to cancel the deal,
arguing that X had failed to provide certain information regarding fake
accounts. The company sued Musk to require him to complete the deal.
After months of legal wrangling, the billionaire’s plan to buy the social
media platform came to fruition, and Musk took control of the company on
Oct. 28, 2022. The company was renamed X the following year.

Elon Musk’s net worth was estimated at $234 billion as of September 2023,
making him the wealthiest person on the planet.
Jeff Bezos
▪ Age: 59
▪ Residence: United States
▪ Founder and Executive Chair: Amazon
▪ Net Worth: $171 billion
▪ Amazon Ownership Stake: 10% ($145 billion)
▪ Other Assets: Blue Origin ($11.2 billion private asset), The
Washington Post ($250 million private asset), Koru ($500
million private asset), and $14 billion in cash

In 1994, Jeff Bezos founded Amazon.com in a garage in Seattle, shortly

after he resigned from the hedge fund giant D.E. Shaw. He had originally
pitched the idea of an online bookstore to his former boss David E. Shaw,
who wasn’t interested.
Jeff Bezos
Though Amazon originally started out selling books, it has since morphed
into a one-stop shop for everything under the sun and is expected to
overtake Walmart as the world’s largest retailer by 2024. Amazon's pattern
of constant diversification is evident in some of its unexpected expansions,
which include acquiring Whole Foods in 2017 and entering the pharmacy
business the same year.
Bezos owned as much as 16% of Amazon in 2019 before transferring 4% to
his former wife, MacKenzie Scott, as part of their divorce proceedings. In
2020, Amazon’s share price jumped 76% on the heightened demand for
online shopping amid the COVID-19 pandemic. On July 5, 2021, Bezos
stepped down as CEO of the e-commerce giant, becoming its executive
chair.
Bill Gates
▪ Age: 68
▪ Residence: United States
▪ Co-founder: Microsoft (MSFT)
▪ Net Worth: $134 billion
▪ Microsoft Ownership Stake: 1.4% ($24.1 billion)
▪ Other Assets: $64.1 billion in cash and billions over multiple
other companies

While attending Harvard University in 1975, Bill Gates went to work

alongside his childhood friend Paul Allen to develop new software for the
original microcomputers. Following this project’s success, Gates dropped
out of Harvard during his junior year and founded Microsoft with Allen.
Bill Gates
The largest software company in the world, Microsoft, also produces a line
of personal computers, provides email services through its exchange server,
and sells video game systems and associated game devices. It has recently
invested heavily in cloud services.
Gates shifted from the company's CEO to the role of board chair in 2008. He
joined Berkshire Hathaway’s board in 2004. He stepped down from both
boards on March 13, 2020.
Bill Gates has much of his net worth in Cascade Investment LLC. Cascade is
a privately-held investment vehicle that owns a variety of stocks including
Canadian National Railway (CNR), Deere (DE), and Republic Services (RSG),
as well as private investments in real estate and energy.
TABLE OF CONTENTS

 - Successful Entrepreneurs in the World

 - Successful Entrepreneurs in the Philippines
 - Success of SM Investment Corporations
 - The 14 Work Life Principles of Mr. Henry Sy, Sr.
 - Reasons Why Entrepreneurs Fail
Henry Sy, Sr.

Shoe Mart, or SM for short, is one of the country’s

retail behemoths, and far more than just a mall.
It is now a well-loved institution of which many
Filipino families hold fond memories. It provides a
wide range of services, including shopping, theatres,
locations for date nights, parties and other special
occasions, ice skating, and food courts. SM started
modestly and from humble beginnings, despite its
now upmarket reputation.
Early life and Education
Henry Sy was born in Jinjiang in Fujian, then still under the Republic of
China (ROC), on October 15, 1924. At age 12, he and his family moved to
the Philippines during the Commonwealth Era under American colonial
period, where his father set up a shop that sold various household items. At
his father's store, Sy helped his father sell rice, sardines and other items.
Following World War II, the store was obliterated along with the rest of
Manila.
His family decided to return to China, but Sy stayed in the Philippines,
where he completed his secondary education at an institution now known
as the Chiang Kai Shek College in Tondo, Manila and earned his Associate of
Arts degree in commercial studies at Far Eastern University in 1950.
Career
In his twenties, Sy became a store manager working for an American
business involved in the local shoe industry in the Philippines; he opened his
first sole-proprietorship store in Quiapo, Manila in 1948. He opened at least
three shoe stores in the Carriedo area which was then known for its heavy
pedestrian traffic. His decision to sell shoes was due to the losses his family
experienced in World War II thinking that everyone would need shoes
following the aftermath of the war.
He sold surplus G.I. boots and saved finances before he established
ShoeMart in 1958, his own small shoe store in Quiapo, that marked the
beginning of SM Prime. He later encountered difficulties in sourcing shoes
locally and decided to import shoes from outside the country.
Sy became involved in the banking industry when he acquired Acme Savings
Bank (later renamed Banco de Oro or BDO) in 1967.
Career
In November 1972, he opened SM Quiapo, SM's first stand-alone department
store, and entrusted his 22-year-old daughter Teresita to run the store.
On November 8, 1985, he established his first SM Supermall, SM City North
EDSA. In the early 1990s, SM started opening more shopping malls with the
setting up of two malls in Metro Manila and a solitary mall in Cebu City. SM
Prime Holdings was incorporated in 1994 and went public.
Sy was named "Richest Man of the Year" by the Makati Business Club in 1999
and was conferred an Honorary Doctorate in Business Management by De La
Salle University in January of that year. He and his wife established the SM
Foundation Inc., which helps underprivileged youths, the disabled and the
elderly. He established business presence in Mainland China when the SM
Group opened its first shopping mall in his native Xiamen. Other malls were
later set up in other parts of Southern China.
Career
Sy's holding company, SM Investments (also known as SM Group), has been
frequently named as one of the best managed companies in the Philippines.
SM Investments is the operator of Banco de Oro (BDO) and owner of
Chinabank. In 2006, Sy bought the remaining 66% of Equitable PCI Bank, the
Philippines' third largest lender, and merged it into BDO the following year.
The transaction turned BDO into the second largest financial company in
the country.
In 2017, Sy stepped down as chairman of SM Investments Corporation and
was given the honorary title of Chairman Emeritus as recognition for being
the founder of the SM Group.
Sy, who died in 2019 at the age of 94, was survived by his family. Sy’s legacy
lives on today in his many SM malls and other acquired businesses. As a
result, he was one of the world’s wealthiest men.
Tony Tan Caktiong
The cheerful tagline “langhap sarap” – a Jollibee
trademark – is well-known among Filipinos.
Tony Tan Caktiong, another Chinese immigrant, is the
brains behind this popular food chain. His family
maintained a Chinese restaurant in Manila at the
time, which enabled him to finish college.
He bought an ice cream shop in 1975, but owing to
low sales, he decided to add other items such as
fried chicken, fries, and burgers. Customers came to
the store to buy his products after word spread in his
area.
Tony Tan Caktiong

Caktiong was able to expand across the country after embracing the fast-
food business model, growing his humble restaurant into one of the
Philippines’ most successful businesses.

Furthermore, by establishing a franchise, he has been able to break into

the international market. With over 2,500 outlets in the Philippines and
locations in the United States, China, Saudi Arabia, Vietnam, Singapore,
Brunei and the UK, Jollibee is a fast-food behemoth.
Socorro Ramos
Socorro Ramos began her career in publishing
and retail as a salesgirl in a bookshop. With a
capital of PHP200, she and her husband
launched National Book Store in Escolta at the
age of 19, selling books and school supplies to
children. The Japanese imposed censorship on
books and publications at the time, which
included her burgeoning business. She and her
husband supplemented their income by selling
other products such as candles and soaps.
Socorro Ramos

The Ramoses built a nine-story structure along Avenida after the

postwar boom brought increased revenue for the company. Ramos
adopted a hands-on approach to running her business, even designing
the company’s logo herself.

The National Book Store now has around 3,000 employees. At the age of
98, Socorro Ramos is worth an estimated USD 3.1 billion, making her
one of the country’s richest people.
TABLE OF CONTENTS

 - Successful Entrepreneurs in the World

 - Successful Entrepreneurs in the Philippines
 - Success of SM Investment Corporations
 - The 14 Work Life Principles of Mr. Henry Sy, Sr.
 - Reasons Why Entrepreneurs Fail
Success of SM Investment Corporations

A shopping mall is a wonderful place for people. To

some people it may just be a place they need to do
their shopping in a convenient manner but for many
others it is something much more than that. It is a
place where they can experience new things, It is a
great place where the fun, food, friends, and family
can easily gather outside of the home, It is where the
paths of people can intersect, where new beginnings
can happen, and many more things that can be
expected and unexpected. it is where the best brands
offer their products and services. Malls can give the
people the option to do what they please and at their
leisure, it is the destination for nearly everyone.
Success of SM Investment Corporations

One such mall that is an excellent choice for nearly everyone in the
Philippines is the SM Supermall. The SM Supermall is the largest chain
of shopping malls in the Philippines and has nearly everything that
most of the Filipino people can look for when they go to a mall and
look for the latest items that they could ever want or need.
The malls also have a great amount of ambience and feel to it that is
unlike anywhere else in the Philippines. You can look around and see a
nearly endless line of shops that could sell something that might pique
your interest, you can listen to the piano, or you can check the great
views that some of the malls can offer.
Success of SM Investment Corporations

SM Investments Corporation (SMIC), also known as SM Group, is a

Filipino conglomerate with interests on various sectors, mostly on
shopping mall development and management, retail, real estate
development, banking, and tourism.

Founded by Henry Sy, it has become one of the largest conglomerates

in the Philippines, being the country's dominant player in retail with
208 stores nationwide. Of these, 47 are SM Department Stores; 38 are
SM Supermarkets; 37 are SM Hypermarkets, and 86 are SaveMore
branches.
History

At this point, Sy set up his second company, SM Department Store

Inc., and began selling stocks to department stores. In 1978, he began
buying supermarkets at the northern end of EDSA in Quezon City.
During the 90s when he opened SM Megamall, his companies were
listed in the Philippine Stock Exchange, SM Prime Holdings Inc. By
2005, the SM Investments Corporation was inaugurated.
In April 2017, SMIC appointed Jose Sio as CEO.
Subsidiaries
Retail
 SM Markets - a chain of food retail stores consisting of SM
Supermarket, SM Hypermarket and Savemore.
 SM Store - a department store
 Walter Mart - a shopping mall owned by a joint venture between SM
and a local company.
 Alfamart - a convenience store owned by a joint venture between
SM and an Indonesian company.
 Specialty Stores - SM operates leading local retail chains such as
Ace Hardware, SM Appliances, Homeworld, Our Home, Toy Kingdom
(International Toyworld Inc.), Kultura, Baby Company, Sports
Central, Pet Express, Miniso, Watsons, Uniqlo, etc.
Subsidiaries
Banking
 BDO Unibank - one of the largest banks in the Philippines
 ChinaBank - the first privately-owned local commercial bank in the
Philippines - (SM owns 30% of the company).

Education
 National University at Manila - a private non–sectarian
coeducational institution in Manila.
 Asia Pacific College - a joint venture between SM and IBM
Philippines.
Subsidiaries
Property
 SM Supermalls - the shopping malls of SM Investments Corporation is
operated by its subsidiary, SM Prime Holdings.
 SM Development Corporation (SMDC) - is a residential property
developer which focuses on the premium middle market. SMDC now
operates SM Residences and MPlace.
 Mall of Asia Complex - is an alternative business and tourism
district, as well as the home of the SM Mall of Asia, SMX Convention
Center (the largest private venue in the Philippines), OneE-com
Center and Mall of Asia Arena (one of the largest private sports
venues in the Philippines). The Mall of Asia Complex occupies 60
hectares of land along the coast of Manila Bay, offering locations
for business, tourism, retail, and leisure projects.
Subsidiaries
Hotels and Convention Centers
 SM Hotels
▪ Conrad Manila in Pasay
▪ Taal Vista Hotel in Tagaytay City
▪ Pico Sands Hotel in Nasugbu
▪ Pico de Loro
▪ Radisson Blu Hotel in Cebu
▪ Park Inn by Radisson in Davao
▪ Park Inn by Radisson in Clark
▪ Park Inn by Radisson in North Edsa
▪ Park Inn by Radisson in Iloilo
Subsidiaries
Hotels and Convention Centers
 SMX Convention Center (SMX) is a convention center used for hosting
conventions, seminars, and conferences.
▪ SM Mall of Asia complex in Pasay, opened on November 26, 2007
▪ SM Lanang in Davao City, opened on September 12, 2012
▪ SM Aura in Taguig City, opened on May 17, 2013
▪ SM City Bacolod, opened in September 2014
▪ SM Seaside City opened on 2015
▪ SM City Clark
▪ BMegatrade Hall in Mandaluyong
▪ Cebu Trade Hall in Cebu City
Social involvement
SM Foundation is the corporate responsibility arm of the SM Group of
Companies. The foundation has various areas of advocacy: education,
scholarship programs, building schoolhouses, a mall-based outreach
program, health care, medical missions, mobile clinics, hospital
activity centers and religious community projects.

SM Cares
SM Cares is a program created to consolidate and coordinate all of SM
Prime's corporate social responsibility (CSR) initiatives. Carried out in
all SM malls nationwide, SM Cares' CSR projects cover environmental
conservation (energy, air and water), and assistance to customers of
SM malls with special needs such as the disabled, special children, the
elderly and nursing mothers.
TABLE OF CONTENTS

 - Successful Entrepreneurs in the World

 - Successful Entrepreneurs in the Philippines
 - Success of SM Investment Corporations
 - The 14 Work Life Principles of Mr. Henry Sy, Sr.
 - Reasons Why Entrepreneurs Fail
The 14 Work Life Principles of Mr. Henry Sy, Sr.
The 14 Work Life Principles of Mr. Henry Sy, Sr.
1. Strive to be a leader in your chosen field.
2. Be a person of integrity.
3. Have a long-term vision and strategy.
4. Focusing means concentrating and prioritizing.
5. Have great passion to achieve.
6. Work hard.
7. Be patient and persevere.
8. Recognize opportunity.
9. Be optimistic.
10. Be confident.
11. Be disciplined.
12. Build your organization.
13. Make it your mission to provide employment.
14. Social responsibility is important.
The 14 Work Life Principles of Mr. Henry Sy, Sr.
1. Strive to be a leader in your chosen field.
Being a leader means being different, taking bold steps and going to unexplored places.
Leadership is a skill and process which like other skills can be learned through practice.
Being a leader means not waiting for motivation from others. It also means knowing and
focusing on one’s target and pushing oneself beyond his comfort zone.
 I have chosen this path, and I will do my best
 Don’t be a wall flower watching the world pass

2. Be a person of integrity.
 Do things right even if no one is watching
 Integrity breeds trust among superiors, peers and subordinates

3. Have a long-term vision and strategy.

 How do you see yourself, ten, twenty, thirty years from now?
 There will be bumps on the road but stay the course
The 14 Work Life Principles of Mr. Henry Sy, Sr.
4. Focusing means concentrating and prioritizing.
“ he taught us that as our business grows, we also have to go back to basics and
concentrate our resources in areas wherein we have a competitive advantage”
 the sacrifice today will reap benefits in the future
 the difference between the master and the mediocre is how they focus on their craft

5. Have great passion to achieve.

 Achievement no matter how small or big builds your character.

6. Work hard.
“Success will not last if you do not continue to work hard. If you are lacking in
some aspects, work harder and longer and you may able to catch up. If you have
caught up, work longer so you can surpass your competitors”.
 Nothing beats it
 Hard work beats being wise, but combined it is
The 14 Work Life Principles of Mr. Henry Sy, Sr.
7. Be patient and persevere.
There is no such thing as overnight success nor easy money. If it does happen then it could
be luck. Even if one gets lucky, he has to work hard to sustain it. if you fail, do not be
discouraged. Try again as they always say.
 Through ups and don’ts be resilient

8. Recognize opportunity
It is one thing to see opportunity, another is to do something about it. When opportunity,
another is to do something about it. When opportunity comes, you should be ready to
react, otherwise it goes to someone else. Opportunity does not always come knocking.
 keep an open eye on the future
 innovation
The 14 Work Life Principles of Mr. Henry Sy, Sr.
9. Be optimistic.
“He has seen opportunities in each crisis but has carefully selected the ones he
would pursue. He seems to thrive on crisis and come out of each cycle stronger
than ever.”
 There is always the sunrise afer the sunset
 Resilience

10. Be confident.
A positive attitude comes with confidence. If you believe you can, you can.
 As long as you have worked hard and done your preparation, you can be…
 Related to focus and industry
The 14 Work Life Principles of Mr. Henry Sy, Sr.
11. Be disciplined.
Second best does not exist.
“he abhors waste and puts a premium on savings because of the need to be
prepared for all contingencies in business, politics and personal life.”
 - self control

12. Build your organization.

This involves working one areas of excellence- in management, products and
operations. Operational excellence delivers the combination of quality price and
ease of purchase that gives one a competitive edge.
 Think of the future of your company and business by developing your people
The 14 Work Life Principles of Mr. Henry Sy, Sr.
13. Make it your mission to provide employment.
“ Initially he was quite dismayed and disappointed (with labor strikes in the
1980’s) but after taking stock of the number of employees in our companies as
well as those of our suppliers, he realized that he could not just close.”

14. Social responsibility is important.

Business is a blend of family and professional management. SM is involved in
providing scholarships for 400 students for several years, building school, houses
far-flung towns and providing markets for livelihood programs, conducting,
medical missions and refurbishing hospital activity centers and doing mall-based
solicitation.
 Help others
 This brings true meaning to one’s life
TABLE OF CONTENTS

 - Successful Entrepreneurs in the World

 - Successful Entrepreneurs in the Philippines
 - Success of SM Investment Corporations
 - The 14 Work Life Principles of Mr. Henry Sy, Sr.
 - Reasons Why Entrepreneurs Fail
 Reasons Why Entrepreneurs Fail

Entrepreneurship is a tricky thing and unless,

entrepreneurs are on top of the game all the
time, the chances for failure are very high.
Research has shown that not more than 10% of
all new ventures go past the second year of
their existence and that entrepreneurs often
end up on the wrong side of success.
 Reasons Why Entrepreneurs Fail

1. Not Investigating the Market

So, you've always wanted to open a real estate agency, and you finally
have the means to do so, but your desire to open the agency blinds you
to the fact that the economy is in a down housing market and the area
where you want to work in is already saturated with agencies, making it
very difficult to break in. This is a mistake that will result in failure
from the start. You have to find an opening or unmet need within a
market and then fill it rather than try and push your product or service
in. It's a lot easier to satisfy a need rather than create one and convince
people that they should spend money on it.
 Reasons Why Entrepreneurs Fail

2. Business Plan Problems

A solid and realistic business plan is the basis of a successful business. In the plan, you will
outline achievable goals for your business, how your business can meet those goals, and possible
problems and solutions. The plan will figure out if there's a need for the business through
research and surveys; it will figure out the costs and inputs needed for the business, and it will
outline strategies and timelines that should be implemented and met.
Once you have the plan, you should follow it. If you start doubling your spending or changing
your strategies whimsically, you are asking for failure. Unless you have found that your business
plan is overwhelmingly inaccurate, stick with it. If it is inaccurate, it's best to find out what's
wrong with it, fix it, and follow the new plan rather than change how you do business based on
quick observations.
The more mistakes you make, the more expensive your business will become and the greater the
chance of failure. You may also be called to pivot when market conditions change drastically and
impact negatively the chances of success based on the initial business plan. In this case, you
revisit your plan and edit it fully based on the decided pivot.
 Reasons Why Entrepreneurs Fail

3. Too Little Financing

If you have started a company and things aren't working out, and you have
little capital and a struggling business, you're not in a good position to ask for
another loan. If you're realistic at the beginning, you can plan to start with
enough money that will last you to the point where your business is up and
running and cash is actually flowing in.

Trying to stretch your finances at the beginning may mean that your business
never gets off the ground, and you'll still have a lot of cash to repay. Lean
management strategy is warranted in this phase in particular but can be
applied even after this phase. Try to think of multi-channels for funding and
financing. Get educated about this area and be creative searching
alternative sources of financing.
 Reasons Why Entrepreneurs Fail

4. Bad Location, Internet Presence, and Marketing

A bad location is self-explanatory if your business relies on location for foot traffic. Just
as dangerous, however, is a poor Internet presence. These days, your location on the
internet and your social media strength can be just as important as your company's
physical location in a shopping district. An online presence will let people know that
they can give you their business, so if the need is already there, the availability and
visibility of your business is the next important step.

This is similar to marketing. Not only must you make sure that marketing reaches
people, but it must also reach the right people. So make sure the type of marketing
lines up with the audience you want to reach. Big billboards may not be the way to go
for an internet company, just as online ads may not be the way to go for a heavy-
construction business. If the need is already established, make sure you're reaching the
audience who needs your product or service.
 Reasons Why Entrepreneurs Fail

5. Remaining Rigid
Once you've done the planning, established your business, and gained a customer base,
don't become complacent. The need that you're fulfilling may not always be there.
Monitor the market and know when you may need to alter your business plan. Being on
top of key trends will allow you lots of time to adjust your strategy so that you can
remain successful. One must only look at the music industry or Blockbuster video to
know that successful industries can undergo huge changes.
 Reasons Why Entrepreneurs Fail

6. Expanding Too Fast

Now that your business is established and successful, it's time to expand, but you must
treat the expansion like you're starting all over again. If you're expanding the reach of
your business, make sure that you understand the areas and markets into which you'll
now be reaching. If you're expanding the scope and focus of your business, make sure
you understand your new products, service and intended consumer as much as you do
with your current successful business.

When a business expands too fast and doesn't take the same care with research,
strategy, and planning, the financial drain of the failing business(es) can sink the whole
enterprise.
 Reasons Why Entrepreneurs Fail

The Bottom Line

Though the rate of business failure in the first two years is around 20%, it doesn't mean
that you have to fail. Through research, planning, and flexibility, you can avoid many of
the pitfalls of a new business and be a part of the 25% that make it to 15 years and
beyond.