Seventy percent of startup businesses fail within the first 10 years, according to a 2013 study conducted by Bradley University and the University of Tennessee. It’s a devastating reality given that the lion’s share of those are small businesses, from which more than half of domestic sales are generated.
More often than not, the reason for the failure is a lack of solid management abilities. Ironically, the very qualities that inspire most entrepreneurs to take a risk and start a new business can work against them when it comes to actually leading that business day to day.
There are inherent differences between entrepreneurs and leaders. An entrepreneur is a visionary and innovator who may tire when it comes to execution. Entrepreneurs tend to favor the newest strategy versus a tried-and-true strategy, which makes them more comfortable with risk. While they don’t enjoy executing day-to-day tasks, they may struggle in effectively delegating those responsibilities to others.
A leader’s natural strengths lie in consistently executing company strategy. They appreciate both the need to hire a seasoned management team and the benefits of empowering them to make decisions autonomously. Often, however, leaders lack the entrepreneurial trait – the ability to inspire a workforce toward a greater vision – and they may struggle to maintain a culture of innovation.
For a startup business to find success, it takes either a strong, balanced partnership between an entrepreneur and a leader or the rare, uniquely skilled entrepreneurial leader – somewhat of a unicorn. These are the people that inspire us with both their vision and ability to see it through – people such as Steve Jobs, Sam Walton, Henry Ford and Bill Gates.
Too many businesses fail simply due to a lack of balance between entrepreneurial innovation and leadership. To ensure your business thrives, recognize your natural strengths and truly empower trusted business partners to balance out your management team.
When a management imbalance occurs, a sales and marketing strategy is not likely to produce a strong return on investment. If an entrepreneur is solely at the helm, seemingly continuous changes in sales and marketing direction can result in team confusion and the spinning of wheels with little result. With a leader alone in the driver’s seat, the business may become stagnant, focused too much on strategies of the past without an eye to future innovation. Neither environment is suitable for sustainable growth. A combination of entrepreneurial leadership is the key to long-term success.
Lori Turner-Wilson is an award-winning columnist and CEO/founder of RedRover Sales & Marketing, www.redrovercompany.com. You can follow RedRover on Twitter (@redrovercompany and @loriturner) and Facebook (facebook.com/redrovercompany).