Starting a business is a challenge, not just because of the logistical or financial hurdles but also because there are also several psychological barriers to work through. If the thought of leaving the stability of a regular salary and benefits to venture into the uncertainties of becoming a small business owner fills you with anxiety, you’re not alone. Many potential entrepreneurs grapple with similar fears.
In this article, we will explore five common fears that many new entrepreneurs face when starting a business:
- Fear of Failure: The worry that your business might not succeed and the potential consequences of failure.
- Fear of Financial Risk: The concern about losing financial stability and the uncertainty of generating a steady income.
- Fear of Lacking a Viable Idea: The self-doubt about whether your business idea is good enough or has the potential to succeed.
- Fear of Judgment: The anxiety about how others, including family, friends, and colleagues, will perceive your decision to start a business.
- Fear of Success: The apprehension about the increased responsibilities, expectations, and potential lifestyle changes that come with business success.
By addressing these fears head-on and providing practical strategies to overcome them, this article aims to empower aspiring entrepreneurs to take the leap and pursue their dreams with confidence.
Related: A Lot Of People Want To Start A Business But Don’t – Why?
Why Starting a Business Feels Hard
Simply put, it is hard. It’s a huge life change and many new businesses aren’t going to make it. One of the most difficult aspects of entrepreneurship is overcoming the fear of the unknown. If you find yourself hesitating to take the first step toward your dreams because of fear, know that this is a common experience.
I’ve worked with many clients who are paralyzed by the fear of starting a business. Whether it’s rejection, fear of success, or deep-seated doubts about their own worthiness or capability, these fears are not just common; but there are some actionable steps to overcome them.
The purpose of this article is to walk you through the most common fears and to explore and understand the psychological barriers that hold many back from even trying.
Fear of Failure
The thought of pouring your heart, soul, and resources into a business that might not succeed is one of the most common fears. Failure is often seen as the worst possible outcome, is more common than most people realize. Take a look at the statistics: according to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within the first year, and about 50% fail within the first five years. This high failure rate isn’t a sign that all these entrepreneurs are personally inadequate; rather, it reflects the risks and uncertainties of starting and running a business.
A business failure also doesn’t mean the end for starting a successful business. Many successful entrepreneurs have faced failure and used it as a springboard for success. Take Walt Disney, for example. Before creating the the successful Walt Disney Company that we know today, Disney’s first animation studio, Laugh-O-Gram Studios, went bankrupt in 1923. Despite facing numerous challenges, Disney persevered and learned from his failures to ultimately start his new studio, Walt Disney Productions.
When struggling with the fear of failure, I think it’s important to reframe this fear and ask yourself: is it more important to avoid failure altogether, or to try and potentially fail?
The truth is, the desire to avoid failure can hold you back from pursuing your dreams. As time passes, you may find yourself regretting not taking the leap more than you would regret trying and failing. One way to manage the fear of failure, is by starting small with achievable goals, allowing you to build confidence with small wins. Celebrate small wins and milestones along the way, and don’t be too hard on yourself when things don’t go as planned. Also by surrounding yourself with a supportive network of mentors, advisors, and other entrepreneurs can offer guidance, encouragement, and perspective.
If you’re concerned about the worst-case scenario of your business failing, remember that you can always return to being an employee. In fact, having run a business, you will have developed skills and a mindset that are highly valued in the job market—problem-solving, resilience, and initiative, to name a few. This experience can make you a more attractive candidate to potential employers.
Fear of Financial Risk
Financial insecurity is another of the big fears of starting a business, particularly for those leaving secure, high paying jobs. This fear extends beyond the potential loss of a steady income—it also includes worrying about not being able to maintain the same standard of living that their current job provides, including benefits like health insurance.
It’s important to acknowledge that if financial risk should be a real concern when starting a business. However, there are steps you can take to lower this risk and this starts with creating detailed financial projections. These projections should outline all anticipated revenues and expenses, helping to paint a realistic picture of the business’s feasibility and whether it can provide adequate cash flow to survive on. I strongly recommend sharing these projections with an accountant or a business mentor as they can give you a second set of eyes to provide feedback and spot any potential issues or opportunities you might have missed.
Another way to manage financial risk is to build a safety net before launching your business. Aim to save at least six months’ worth of living expenses (a year is better) to provide a financial cushion in case things don’t go as planned. This runway will give you the breathing room to focus on building your business without the immediate pressure of generating income to cover your personal expenses.
Fear of Lacking a Viable Idea
Another fear that I’ve heard from many aspiring entrepreneurs is the fear of not having a viable business idea. It’s natural to worry about whether your idea is good enough, but I want to caution you to recognize that having an idea is just the beginning. Just because an idea sounds great to you, doesn’t necessarily mean it will be a successful business.
This is where market research comes in. So, before investing time and resources into an idea, you need to validate its potential. Market research helps you understand your target audience, gauge demand for your product or service, and size up the competition. By conducting thorough market research, you can better understand whether there is an actual need for your product or service.
A key part of market research is talking directly to potential customers. Talk to people who could benefit from your product or service, ask them questions, and listen carefully to their feedback. This direct interaction will give you valuable insights into their needs, preferences, and pain points, allowing you to refine your idea and create something that they really want.
If you’re having trouble coming up with a business idea, don’t put too much pressure on yourself. You don’t need to come up with a groundbreaking innovation. Many successful businesses are built on solving everyday problems or filling gaps in the market. Take a look at your own life and the lives of those around you. What frustrations or pain points do you encounter? What products or services do you wish existed to make your life easier? These observations can spark ideas for your business.
Additionally, there are numerous resources available to help you generate and validate business ideas. At StartUp101.com, we have a library with hundreds of business ideas that you can explore for inspiration.
Fear of Judgement
Another understandable fear is that of being judged by others. This fear often stems from concerns about how family, friends, and colleagues will perceive the decision to leave a stable, well-respected job for the uncertain path of entrepreneurship.
There’s a societal pressure to conform to certain standards of success, often measured by job titles and steady income, and friends and colleagues will likely contribute to this fear. Leaving a prestigious or well-paying job to start a business might be met with skepticism or disbelief. They might view such a move as a step down or question the wisdom of leaving a secure position for the unknown.
Judgment from parents is another common source of this fear. Many parents, hoping to see their children secure and successful, might express concerns about the risks associated with starting a business. It’s important to remember that their worries often come from a place of love and a desire to see you succeed, though they sometimes like to brag about your position to their friends. Until you make it big, many parents won’t brag about your new career choice.
Many people have been conditioned to view traditional employment as the only path to success and may not grasp the potential rewards and fulfillment that come with building your own business. To address these fears, it’s important to recognize that judgment from others is often rooted in their own values, fears, and sometimes jealousy, and not necessarily in an objective assessment of your potential for success. Remind yourself that you are the one who knows your passions, skills, and aspirations best. While it’s important to consider advice and perspectives from others, ultimately, the decision to pursue entrepreneurship is yours alone. You don’t need their permission.
Fear of Success
At first glance, it might seem strange to be afraid of success when starting a business. After all, isn’t success what everyone is striving for? However, the fear of success is often rooted in deeper psychological and emotional factors that can hold people back from reaching their full potential.
One reason why some individuals fear success is the increased responsibility and expectations that come with it. As a business grows and becomes more successful, the entrepreneur may face new challenges, such as managing a team, handling complex operations, and meeting higher customer demands. The thought of these additional responsibilities can be overwhelming and lead to self-doubt about one’s ability to handle them effectively.
Another aspect of the fear of success is the concern about how success might change one’s life and relationships. Some entrepreneurs worry that achieving success may lead to success taking over their life and losing your work-life balance, which is a common reason for leaving a job and starting a business in the first place.
To overcome the fear of success, you can reframe your mindset and embrace a growth-oriented perspective. Recognize that success is not a destination but rather a journey of continuous learning and personal development. Embrace challenges as opportunities for growth and view the acquisition of new skills and responsibilities as a natural part of the entrepreneurial process.
Another strategy is to surround yourself with a supportive network of mentors, peers, and loved ones who understand and encourage your entrepreneurial aspirations. Building strong relationships with individuals who have experienced similar fears and challenges can provide valuable insights, guidance, and emotional support as you navigate the path to success.
An effective approach is to break down your goals into smaller, manageable milestones. Rather than focusing solely on the end goal of success, celebrate the small wins and progress along the way. Acknowledge your achievements, no matter how small, and use them as building blocks to boost your confidence and motivation.
Furthermore, prioritize self-care and maintain a healthy work-life balance. Recognize that success does not have to come at the cost of your personal well-being or relationships. Set clear boundaries, delegate tasks when necessary, and make time for activities that bring you joy and relaxation. By nurturing a well-rounded lifestyle, you can mitigate the fear of success and maintain a sense of perspective and balance.
Related: 3 Ways To Overcome The Fear Of Starting A Business
Wrapping Up
Starting a business comes with many fears and it’s natural to experience a range of fears and doubts. From the fear of failure and financial risk to concerns about the viability of your idea, the judgment of others, and even the fear of success itself, these psychological barriers can talk you out of even trying to pursue your entrepreneurial dreams..
Remember that these fears are common. Every entrepreneur has faced one or more of these fears or doubts at some point, but they found ways to overcome them – and have the power to do the same. Believe in yourself, take action, but don’t let fear hold you back from achieving your entrepreneurial dreams.
