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The Rosy Glow of Over Optimism

We all need to be optimistic when setting up a new business. If we are not then it probably won’t even get to the start up stage. However, entrepreneurs need to be mindful of a tendency to be over-optimistic. 

Over-optimism is when someone believes that their business will do substantially better than expected or the norm in that particular field. 

Over-optimistic entrepreneurs believe they are more likely than others to experience positive outcomes.

Studies on over-optimism have revealed that entrepreneurs have a greater tendency to be over-optimistic than non-entrepreneurs. Even when presented with the facts about potential business failure, some entrepreneurs still believe that their business will be different. 

I suppose it starts with the excitement of setting up something new. None of us want to believe that there could be an F word on the horizon (failure). We want our business and our well-planned idea to succeed. Not only that, we want it to do better than our competitors and other businesses in the same field. We can, as entrepreneurs, be a little over-optimistic about what the business can achieve. 

Also your carefully crafted unique selling point (USP) may be instrumental in your optimistic thoughts. Entrepreneurs can become blind-sided to the pitfalls in the excitement of the set up and creation of their new business. 

Unfortunately, it’s not just the start up stage where over-optimism occurs. Seasoned entrepreneurs also fall into the over-optimistic trap. Most of us think, ‘it wouldn’t happen to me’, and on the balance of probability it might not.  Or, ‘my idea is completely different or more current’ and therefore will work better than the competition. Or ‘ I shall work harder at sales’ to bring in more clients, so that my business is more successful than hers.


I don’t want to take away from the excitement of starting your first venture, just to share a little common sense. If you are aware that you could be prone to over-estimating the potential of your new business, it might be enough. You don’t need to change your idea, however, you may need to adjust figures for suggested income, turnover, profit or market share. Don’t stop dreaming big. Just be aware and think ‘how realistic am I being?’ 

Better to start small with success than go large and fail.

Terri is currently writing her second book intended for new entrepreneurs and business owners.

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