How do some entrepreneurs succeed with their first business venture while others fail? If you have ever engaged with gambling, it will be easy to provide a quick solution to this question. That’s because you have a clear understanding about the odds of winning while you are engaged with gambling.
Business startups are some sort of an investment. You must have already heard about the saying “You need to fail in order to succeed”. Unfortunately, most of the people out there in the world misunderstand this fact. In other words, learning from failures can lead you towards success is a myth.
Failures would not teach you how to achieve success. From the recent studies, it has been identified that about 8% of the business startups achieve success. On the other hand, only 20% of the new businesses survive for a period of more than 18 months. Your business can either fall into this 20% or the other 80%. You could invest a fortune in your business startup. However, there is a 92% chance for you to end up losing your money.
Now let’s take a look at roulette. Roulette has a similar percentage of winning the odds as well. Only gamblers play all-in. An experienced investor knows that it is important to play all the rounds in order to beat the odds. As a result, he would tend to play at least 10 rounds.
If you are looking forward to starting your own business, you don’t need to feel down now, because plenty of opportunities are available out there for you to minimize the chances of losing money. For example, you can think about sharing the risk with a partner. This will assist you to stay away from a great deal of frustration. You shouldn’t invest money that you cannot afford to lose in business startups. That’s because you just have an 8% probability of making your business a profitable one in the long run. Therefore, you need to take a look at the money that you can spend and then spend accordingly. The same principles apply to gambling as well. You don’t spend all your money when you go to a casino and start playing roulette. If you achieve success, you can think of spending more money, but until that, you need to spend your money carefully.
All the people who are planning to start new businesses should have a clear understanding on how many rounds of roulettes they should play. If they can play more than 10 rounds, they have a higher chance of ending up with success.
You should also take a look at the two rules of investing proposed by Warren Buffet.
Rule 1 – Don’t lose money
Rule 2 – Look at Rule 1
As you can see, starting a new business is similar to gambling. Therefore, you should be aware of your odds in order to become a successful entrepreneur at the end of the day.
