Vesta Digital Blog

What is the Difference Between Business Success and Failure?

Posted on: November 8, 2010

successful businessThere really is no secret formula to follow to achieve business success. Success can come from a combination of many things like hard work, good networking, and even luck. However, the more we study small businesses that do succeed, the more we realize that the successful ones have a lot in common.

Small Business Trends published a blog post based on the new study released by the Kauffman Foundation called The Making of a Successful Entrepreneur. It has great insights into what successful entrepreneurs and small business owners have in common. It can show you what most affects the success or failure of a startup business.

Survey Results

Here are a few key points from the survey as according to Small Business Trends:

The survey polled 549 founders of successful businesses in high-growth industries, including aerospace, defense, computing, electronics and health care. Here’s what they said:

Their most important success factors: previous work experience, learning from their successes and failures, a strong management team and good fortune;

  • 98 percent said prior work experience was an “important” success factor; 58 percent said it was “extremely important;”
  • 40 percent said learning from failure was extremely important;
  • 82 percent said the management team was important; 35 percent said it was extremely important;
  • 73 percent said luck was an important factor;
  • Professional networks were key to success for 73 percent of entrepreneurs surveyed, while 62 percent said personal networks were important;
  • 68 percent said availability of financing/capital was important, but only 11 percent had received venture capital, and just 9 percent had obtained private/angel financing.

What about the most common barriers to entrepreneurial success? The one most respondents cited (a whopping 98 percent of them) was the failure to take risk. Others included:

  • Not putting in the time and effort required (93 percent)
  • Difficulty raising capital (91 percent)
  • Lack of business management skills (89 percent)
  • Lack of knowledge about how to start a business (84 percent)
  • Lack of industry and market knowledge (83 percent)
  • Family or financial pressures to hold a traditional job (73 percent)
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