Why do so many businesses fail?

I've seen it all before. Probably so have you. People full of energy, full of dreams, who decide to give up their job, start their own business, become their own boss and become rich in the process. They know they are good at what they do, they understand the marketplace they are pitching their product at - why shouldn't the succeed?

They are full of enthusiasm and the desire to create wealth. That's their dream, usually to make a million or two, enough to live comfortably, with a beach house, a boat and a fast car...

It's not unusual. Many thousands of people set up their own businesses every year. They start a company, offer a product or service and wait for success to roll their way. All too often, it doesn't. The dream evaporates in front of their eyes. What goes wrong?

The new entrepreneur sees others succeed, so believes that he or she can too. It can't be difficult, can it? Michael Gerber examined the reasons why businesses fail in his insightful book the E-Myth, and concluded that many were due to a condition he called 'entrepreneurial seizure'.

People who succumb to entrepreneurial seizure are often those who are very good at their job. They are excellent plumbers, architects, pastry cooks, computer sales people...They are trained to do their jobs and acquire skills through years of experience. But being the world's best plumber doesn't mean you have the skills to run a business. In business you need to cope with employing others, to find a niche in the market place, to deal with the resultant paperwork, and to keep your vision alive and the business growing.

Running a business is a skill, one that must be learned, and all the budding entrepreneur's previous skills and experience may be worthless when it comes to this new challenge. It's usually far too late to start learning how to run a business when you've already made fundamental mistakes. But if you don't learn how to do it properly - and quickly - the business will fail!

Success is so simple...

Dave Thomas, founder of Wendy's hamburger chain, left school after year 10. He began his education at the age of 12, working at lunch counter. He spent time as a cook in the army, worked in several restaurants and as a manager of a KFC store, which led him to open his first Wendy's store in 1969. His stores today number more than 4020. Yet one thing he notes about education is that many people, especially those with degrees, out-think themselves. He maintains that success is not about complicated theories found in university lecture rooms. Success, he believes, is simply knowing what people want and helping them get their money's worth - simple!

How can you learn the principles? Study the successes. Successful people write autobiographies, and they generally set out their business principles clearly there. It's not an ideal way to learn. Face to face is better, but it is a place to start. As time goes by and you gain more experience, you will manage to meet your role models and learn more.

Don't just concentrate on the successes of others. Learn from their failures too. Study how they spend their money as well as how they make it. Use others' experience - it is invaluable!

It pays to be a drop out...

There are numerous stories of people who have become fabulously successful in business without a formal education beyond school.

Take Tom Monaghan. Tom opened a small pizza shop in 1962 when he was just 23 years old. He had no degree, no experience and just enough money to get started. Initially things did not look good: his firsts week's sales were just $99. By 1987, however, Tom's business had grown to 2500 stores around the world, and turned over $2.5 billion in sales. This grew to 5500 store and $3.5 billion in sales in 1997. In 1998, Monaghan sold 93% of his business - now a chain 0f 6100 stores- and still had no 'education'.

So where did he get the knowledge that made him successgul? Wealth education is about going out and trying things, not being afraid of risks, learning from your mistakes - and your successes!

How dumb people become rich...

Is there any link between wealth and education? All the evidence seems to show that there isn't. A university graduate may command more money in his or her first job than a sixteen year old apprentice, but when it comes to making serious money, education isn't a factor.

Never confuse lack of formal education with lack of intelligence or knowledge. People who make a lot of money, enough to be financially independent, are educated. They may not have been taught what they know at school or university, but there's another way of gaining an education, and I call it attending the "School of Wealth"!!!

Why some people never get rich???

Statistics predict that of those people in the workforce at present, only 5% will be independently wealthy at retirement. Think about the statement: only 5% of people aged 58 will be able to support themselves financially without a government pension or other assistance. How depressing! Age creeps up on you, especially as you approach 40 or 50 and, in panic, you suddenly realise that you are not going to be in that 5%!

What are the reasons behind such a low percentage being able to retire comfortably? Why is financial independence so hard to achieve? The answer is simple - education has failed the vast majority of people. They have never learned:

1. How to make enough money
2. How to keep it
3. How to use it wisely

How to Make Money???

There are only five ways to make money that I know of. You can:

1. Inherit it or marry it - if you are lucky enough

2. Obtain it illegally, either by theft or fraud, both of which are risky as well as unethical

3. Invest your savings - usually profitable, so long as you have the right financial skills, good advisors and plenty of patience

4. Work - but this won't make you rich without leverage

5. Go into business - which won't make you rich either, unless you know the right rules

John Paul Getty set out the basic rule of wealth creation in his book How to Be Rich: you must be in business for yourself. He made it clear that you will never end up rich if you are an employee. People who have amassed wealth through a business have always understood this. But there is more to the point than meets the eye, and this is the entire purpose of my blog:

" Going into business won't automatically make you rich, but it is the fastest way to achieve this goal - if you get it right!!! "