How to recover after a business failure
Obviously, no one wants to be responsible for a business failure – or at anything. But as we all learned from watching Forest Gump, **it happens, and to the best of us.
And at the risk of trotting out a cliché, a business failure can, in the long run, help you succeed by teaching you important lessons which make you stronger, wiser and more determined.
As author and international speaker Jonathan MacDonald told small business website Bytestart:-
“One of my crowning moments of glory in business was when I ended up penniless with two kids and an extraordinarily angry wife. I say that’s one of my crowning moments as it played a huge part in shaping the rest of my career.”
Several books and a career advising Google, Apple and Microsoft later, it’s easy for Macdonald to say that now. But he probably wasn’t feeling like that at the time!
So if you are going through this right now, here are some thoughts on how to come back after business failure that might help you start to feel a little better:-
You CAN cope..
When things go wrong, you have two choices. You can collapse in a heap or pick yourself up and keep going.
The latter can often feel impossible at the time but at some point you’re going to have to do it – and you can.
“Of all the emotions running through me, the one that stands out upon reflection was the feeling that I can’t get through this. This is such a powerful thing to say to yourself as it pretty much guarantees that yes, you’re right, you can’t.”
Firstly, you need to accept that what’s done is done and that it’s not the end of the world.
A business failure is not a failure of you as a person, or an indictment of your ability. The talents, courage, vision and enterprising spirit that led you to start your own business, which is a great thing to have done, are still there.
Dedicate your energy to moving forward instead of feeling miserable.
“If we fail at something, it is the way we think that enables that moment to be a gateway to better things” Macdonald said.
And how do you know that things can get better? Well, because …
You’re in good company!
Going into business is neither easy nor risk-free. If it was,almost everybody would be doing it.
You are not the first person for whom things have gone wrong and you won’t be the last.
Indeed, as entrepreneur.com points out:-
“A wavering or unsuccessful business endeavour is nothing new to the majority of active entrepreneurs.”
Most start-ups actually fail but we only get to hear about the success stories. For obvious reasons, people aren’t as keen to talk about their less successful projects!
And many of the world’s most successful entrepreneurs haven’t just failed; they’ve screwed up on an epic scale.
Steve Jobs was famously fired from Apple; technology entrepreneur Faisal Hoque also managed to get fired as CEO of his own company. Magnate Sheldon Adelson lost his fortune twice but bounced back to become worth a reputed $38 billion.
The takeaway from this, of course, is that all these people were able to find solutions to their business failures.
As US small business Website Inc put it:-
“Resilience may be more important to your success than luck.”
If these guys can accept and recover from their mistakes, so can you. And to do that, you need to be able to …
Learn from your mistakes
Whether you didn’t have enough capital behind you (most new businesses don’t make a profit for their first year or two), didn’t know enough about the industry, or over-expanded or overspent before you had built up a solid business, you need to explore what went wrong.
Consider whether there were warning signs which you may have chosen not to see.
This won’t just help you avoid those mistakes next time but it might allow you to make a success of your venture in another sector or a different form.
Microsoft founders Bill Gates and Paul Allen had a company called Traf-O-Data in the 1970s; it was only moderately successful but it was the key to them developing Microsoft’s first product.
If you had a great idea but were targeting the wrong people or didn’t have enough publicity, or are just hopeless at financial management, those things can be fixed.
And if you really believe in your idea, you can try again as you may have just had the right idea at the wrong time.
This may not be a failure at all but a short pause on the road to success.
Look at the experience you’ve gained from business failure
One thing is for sure – after a business failure you will know an awful lot more about running a business than you did before you started.
You will likely have a lot more business contacts and may even have customers who liked your product, service or company and who would like to hear about your next venture.
You may have employed or collaborated with great people who you want to continue working with.
You’ll have learned that although you did some things that didn’t work out, you have also learned about things you did well and which did work.
And finally, you’ll have learned about yourself and your strengths and weaknesses – which is really good for you personally as well as professionally.
As technology and media investor Eric Jackson, writing in Forbes, put it:-
“Failing is a good thing. Through failing we learn and really grow as leaders. I found it frightening how many founding management teams in the 2000 to 2003 era had never experienced any kind of failure. This bred enormous over-confidence and even arrogance among some.
“Anyone who thinks they have all the answers is not someone I want to invest my money with.”
A good accountant can help a business survive and thrive – and as business accountants based in London and across the South East, at THP Chartered Accountants we’ve helped many a small company and start-up weather the storms and find success.
About Mark Boulter
Mark Boulter is responsible for the efficient running of the firm’s infrastructure, and ensuring that THP delivers the best client service. Promoting the vision and culture across all branches, people are the key: “I like people who have a fresh approach and I’m happy for them to run with their ideas,” he says.
Communication across departments is crucial and Mark pioneers this. He ensure that people and departments not only talk to each other, but that they share ideas– whether they’re about marketing, finance, sales, strategy or any other topic that can result in us offering a better service. “I think helping to develop the next generation of THP people is essential to our success,” Mark adds. “We’ve a lot of talented people and our way of doing things increasingly attracts ambitious newcomers who are looking for a fresh approach. That’s good for us and even better news for our clients.”