How to Get over Business Failure

by | Oct 13, 2015 | Entrepreneurs, NoBorder, Startups

It happens every day in America—an entrepreneur decides to close the books on a startup business, feeling devastated and defeated in the fallout. Yes, it’s true that 90% of startups fail. That statistic alone scares many people away from even starting a business—let alone beginning again after their first—or second—or third business idea fails.

Dictionary.com defines the word failure as proving unsuccessful, or lack of success; an insufficiency; a decay; becoming insolvent or bankrupt. An entrepreneur can surely define their startup failure in any of these ways—perhaps more than one. The word failure bears an immensely negative connotation. It’s not an easy notion to swallow.

Indeed, failure is not just about losing money. It’s emotional and personal. It’s the business equivalent of losing a child! Then there’s the dread of telling your friends, family, colleagues, and clients, if there are any left. The realization of the startup business failure can be embarrassing. Even more than finances, feeling like a business failure is an energy zapper; it causes you to lose motivation, and belief in your ideas.

First, Understand Why Businesses Fail

Market problems, business model failures, poor structure or management, product issues, and just plain running out of money are all reasons why startups fail.

It’s discouraging, no doubt. But the problem is not necessarily in the entrepreneur, unless they don’t want to be an entrepreneur in the first place.

The problem often lies in the startup’s delicate components.

Product Failures: If the market doesn’t want your product, and you’re trying to sell that product to the market, your business will surely fail—so take time to make sure your product is the right one.

Lack of an Organic, Holistic Attention to Detail: What about those businesses that seemed to have an engaging, desirable product and a skilled team? It almost seems impossible that these startups fail. The problem lied in the ignorance of the basics—the business process, dynamics, the reality that roles can and will overlap—can cause inability to scale and a business model that doesn’t make sense after a while.

Failure to Plan: Many entrepreneurs don’t consider the reality of the pre-startup funding that is required. Depending on the startup’s unique needs, poor pre-planning of funding requirements can lead to failure. This includes failure to obtain key infrastructure and equipment, insufficient cash flow to fund day-today operations, expanding too soon, and heavy reliance on debt funding.

The “Chief” Syndrome: I like to call this the “Chief” Syndrome—someone who is excellent at their trade or craft (accountants, chefs, builders, the list goes on)—decides that because they are good at what they do, they should naturally make the move to run their own business. The problem is, running a startup is its own entity, separate from the product or service you are fantastic at delivering.

No Plan at All: It may sound obvious—but one of the biggest reasons startups fail is because they have no plan at all! It’s not enough to have a concept and stop there. It’s about the details! You should be able to answer why you are in business, what need you’re satisfying, why you meet that need better than anyone else, and how you will deliver results.

What to Do When Your Startup Fails

No matter what we decide as the reasons for our failed business, we must move to a solution-based focused mindset quickly—that’s what entrepreneurs do! However, we get it, it stings. It can be hard to think clearly and know what to do next. Here are our suggestions on steps to follow:

  1. First, take a break.

Take some time to decompress and unwind. It’s normal to need some time for yourself after such a tough blow. Make sure you pause, engage in self-care, and give yourself a bit of time to renew your energy. Soon, you’ll need to get back in the saddle.

  1. Complete a post-business review.

Now it’s time for your business post-mortem. Again, we are solutions-focused, and staying positive—but we must know what we did wrong in order to do it better the next time. Complete an autopsy of your business failure and write down pros and cons, what worked and what didn’t—everything you learned from the experience.

  1. Turn your focus to a new beginning.

You’re an entrepreneur, so you’ll begin again. Nail your formula first and worry about scaling later. Dig deep this time to find the why. Turn your focus on meeting a need instead of making yourself successful and your pockets deeper.

Now, your anxiety and anticipation is devoted to positive, focused-energy, instead of negative energy of past failures that will never be useful.

Some of the most successful entrepreneurs in business have experienced failed business ideas—time and time again. Walt Disney was once told by a newspaper editor that he had no ideas or imagination. We all know how untrue that was! Henry Ford’s first auto company went out of business because of complaints of high prices and low quality. The essence, then, lies in the ability to get back up after you are knocked down—equipped with concrete wisdom for the future.

The best time to plant a tree was 20 years ago. The second best time is now. –Chinese Proverb

A person who never made a mistake never tried anything new. –Albert Einstein

Don’t be embarrassed by your failures—learn from them and start again. –Richard Branson

 

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