Three Major Reasons Why Entrepreneurs Commit Business Suicide During a Depression
Three Major Reasons Why Entrepreneurs Commit Business Suicide During a Depression
by Dr. Anthony M. Criniti IV (AKA “Dr. Finance”)
The lives of entrepreneurs are very difficult, especially during tough times. They will need plenty of good reasons to keep their business alive in order to ensure long-term success.
This article is dedicated to my brothers Mike and T…your love for your family will always be remembered
For so many people during The Great Pandemic Depression, recent times have been tough. Personally, the past few weeks have wreaked havoc in my own inner circles. I have buried several family members including two brothers, one of which committed suicide. These events have resurfaced many old questions. For example: Why do people kill themselves, especially when there are so many things to look forward to?
As businesses can die too, their owners have a choice to commit what can be called “business suicide.” But why do they kill their own companies? Is it for similar reasons that individuals take their own lives? In this article, we will focus on the almighty risk takers…entrepreneurs. These types of individuals put everything on the line for their businesses; and a large majority of them fail. According to the SBA: “About two-thirds of businesses with employees survive at least 2 years and about half survive at least 5 years. As one would expect, after the first few relatively volatile years, survival rates flatten out.” Their chart shows these numbers dropping lower as the years increase. With so much to lose, and so many businesses that fail, the financial topics of business survival and business suicide come front and center during a depressed economic time.
To understand why entrepreneurs commit business suicide, let’s step back and analyze why people commit suicide. The answer to this question can be found by exploring the difficult topic of the meaning of life. Fortunately, some of my past research can be helpful, which was discussed in Chapter 6: Why Survive? in The Survival of the Richest book (2016). My examination of various survivors combined with my personal survival experiences had concurred with one of the best experts on this subject, Viktor Frankl, a psychologist and a survivor of four Nazi concentration camps over a period of about three years. In Frankl’s Man’s Search for Meaning, he reveals his conclusions as a survivor and a scientist on the “why” question. In general, he concludes that the answer to the riddle of why people survive is for personal reasons that vary over time. “These tasks, and therefore the meaning of life, differ from man to man, and from moment to moment. Thus it is impossible to define the meaning of life in a general way” (Frankl, 2006, 77).
Frankl discusses his three major sources for meaning, in other words, three major reasons why people want to live. “According to logotherapy, we can discover this meaning in life in three different ways: (1) by creating a work or doing a deed; (2) by experiencing something or encountering someone; and (3) by the attitude we take toward unavoidable suffering” (Frankl, 2006, 111). In a humble attempt to simply his three sources for meaning, I concluded in the The Survival of the Richest that the most important reasons to survive are: you love your work; you love something or someone; and/or you love the struggle (Criniti, 2016, p. 59).
Returning to our subject of why people commit suicide using the conclusions above, we can conclude that an individual might be missing at least one, if not all, of those sources of meaning. That is, he or she must not have any love for his or her work, for someone else (usually family or friends), or for the struggle (he or she don’t want to fight any more). Eventually a person will acquire what is called “existential frustration” and will no longer want to be alive.
Connecting this analysis to businesses, the conclusions above can be extended to entrepreneurs. That is, there are three major reasons why entrepreneurs commit business suicide, especially during a depression (and probably if they caught the Financial Coronavirus). These business owners might be missing love for at least one, if not all, of the following: for their work, for someone else (usually family or friends), or for the struggle (they don’t want to fight any more). Let’s briefly explore each of these.
The first major reason why entrepreneurs commit business suicide, especially during a depression, is because they might be missing love for their work. Entrepreneurs go into business for all different kinds of reasons associated with the products and services they sell. Most successful entrepreneurs will tell you though that you need to have passion in what you do to be a financial success. Many business owners choose to kill their business because they opened up for the wrong reasons, usually just to make money. However, money itself is just a tool, not a reason to live…two very different things. When an entrepreneur who starts a business just for making a great profit has reached her objective, she will probably close her doors shortly after as there will be no other reason to keep it open (or sell it to someone who cares more about it). To avoid existential frustration, making money should be a goal for an entrepreneur, but not a reason in itself. On the contrary, a passionate entrepreneur has the right makeup for operating a long-term successful business. She is fully equipped with the right reasons to keep the open sign on.
The second major reason why entrepreneurs commit business suicide, especially during a depression, is because they might be missing love for someone else (usually family or friends). Another group of entrepreneurs will open their businesses with people they care about. These are called family businesses. To them, the product or service they sell is second to the idea of the ability to work together with love ones. The business is a reason to keep the family tight and spend quality time together. When family members in these businesses die, the existence of the business comes into interrogation. For example, should a business be kept open now that mom and pop are gone? Business suicide usually occurs in these circumstances if the owners no longer have love for (for example, after a divorce) or are incapable of loving (for example, because of death) the other family members in the business.
The third major reason why entrepreneurs commit business suicide, especially during a depression, is because they might be missing love for the struggle. This is one of the more difficult reasons to explain (Frankl also had trouble with this one the most). Let’s start with a term! In The Survival of the Richest, I defined the struggle as “the confrontation with the hardship of being alive” (Criniti, 2016, p. 14). It was also noted that in the context of survival, the hardship confronted must be potentially deadly.
The life of a typical entrepreneur is not easy because opening and managing your own business is very difficult. There are many bills that need to get paid, employees that need to be directed, a physical location that needs to be maintained, etc. When you are an entrepreneur, you might be forced to have so many different roles at once. One moment you are a high level manager and the next moment you are sweeping the floor and taking out the trash. If you want to be an entrepreneur, you must be prepared to deal with the daily struggle to make your business survive, and hopefully, prosper. However, at some point in an entrepreneur’s life, there comes a time when he doesn’t want to deal with his business struggles anymore and do what the world calls “retire.” He might sell the business or hand it over to the next leader in line. If there are no other options, then the owner might decide it’s time to end the business permanently.
It is important to note that entrepreneurs are less likely to commit business suicide when they have plenty of good reasons to stay in business, especially during a depression. Entrepreneurial businesses are an extension of the mental state of living people. If you are really passionate about your business, really passionate about the people that you work with, and really passionate about managing the daily required struggles to run your business, then you are best equipped to be a long-term success.
Also, in The Survival of the Richest, a “purpose to live” and a “will to live” were considered the most important survival essentials. Although I ranked having a purpose to live as number one, having a good reason for a business to live might not be good enough to keep it alive. This also depends on the entrepreneur’s will to make it live. How passionate is he about ensuring the survival of his business? “Simply, someone who wants to live must have a reason for it, regardless of what it is. In contrast, someone with a reason to live might still not want to live. Maybe the reason is just not good enough!” (Criniti, 2016, p. 115).
The three major reasons above on why entrepreneurs commit business suicide, especially during a depression, highlight how crucial the mental processes of individual owners are to the life cycle of a business. If all of these processes are not properly aligned with the existence of the business, the owner has the choice to commit business suicide. There are times when this decision could be completely justified. After all, the entrepreneur can kill a business and still personally remain alive while retaining the option to open any other business he or she wants at any time. With real suicide, once your life is gone, there are no other options.
Finally, there are many entrepreneurs reading this who might have lost all reasons to keep their businesses open during these tough times. You might think that personal suicide is the answer to all of your problems. Remember that if you commit business suicide, you can always bounce back and start a new business. However, a decision to kill your business is not a good reason to kill yourself. Life is full of change; you don’t have to be married to one company or one idea for the rest of your life. After all, you might find out that something better was meant for you anyways. Stay positive. Life is beautiful!
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