I was privileged to be conversing with a business veteran and expert recently and while conversing, he said something very significant. He said when you have experienced success all your life in academia (we were talking about academics), the first time you are ever faced with failure, you will refute it. This is because you cannot believe you can fail at anything. But as you progress in life, you’ll need to know that failure is inevitable in success. Success isn’t a linear journey, there will be bumps and hurdles and your ability to overcome them and keep going is what will give you lasting success.
According to studies, approximately 20% of start-ups fail during the first two years of being open, 45% collapse during the first five years, and 65% during the first 10 years of operations. Only 25% of new businesses make it to 15 years or more. Take note though that these 25% are not businesses that were shielded from similar challenges as the other 75% but they are businesses that saw setbacks as springboards to learn from and move to the next level.
The truth is there is no start-up that has not experienced one setback or the other. The very definition of entrepreneurship means setting up a business, taking on risks with the hope for profits. Where risk is involved means there is a chance for failure. It is therefore the ability to surmount the hurdles and keep going that distinguishes successful business from unsuccessful businesses. When you are faced with a business failure what do you do? Below are a few steps to help you manage the disappointments of business failure:
- Accept that setbacks are springboards not road blocks: when you experience a setback in your business, you need to know that its normal. It is simply your business drawing your attention to a crucial aspect of it. So, don’t treat it like a final stop, instead see it as an opportunity to learn something vital about your business that you need to avoid in the future or modify to create better productivity.
- Get back to your blueprint and drawing board: the assumption is that when commencing your business, you are supposed to have a business plan which comprises your marketing plan, feasibility studies, financial plan and the overall blueprint for how your business should be conducted. If you don’t have one, then that’s the first thing you need to work on. If you already had one, then it’s time to review and re-strategize.
- Get adequate/expert knowledge for the next level: going over your business plan and reviewing why your business failed will show you areas of your business that need attention. In some cases, you might need expert help to assist you with whatever the challenge is. It could be a brand manager, business strategist, digital marketer, sales manager etc. whichever the case, try and get help. If you have the time, you can take short courses but while it might be cost effective, it might be time consuming.
- Don’t allow the setback become a stronghold: a lot of businesses experience setbacks and bounce back from it but become very conservative. While the objective is not to become reckless, don’t shy away from taking some risks or opening up. You might end up stifling your business and preventing growth.
- Learn form your mistakes and prepare better to avoid costly pitfalls: the higher you go, the bigger the giants you have to slay. Hence, be attentive and learn from past mistakes.
When you suffer any business failure the best thing is always to review the business instead of wallowing in disappointment. The challenge might be the wrong target audience, wrong location, poor management, poor timing etc. Always remember that with consistency and diligence and the right environment, any business has the potential to grow and flourish.