Successful entrepreneurs share many things in common. Hard work, focus, belief in themselves, hungry for knowledge and so on. One trait that doesn’t get much mention is the ability to accept and overcome failure. As entrepreneurs, failure can be a daily occurrence, but the worse is when a business fails.
To be sure there is a lot of noise made on social media and from the start-up world about “fail fast”. It is often heralded as a badge of honour and a goal in and of itself. The premise being that the sooner I fail, the sooner I’ll become a success. Failure is no guarantee of success. Success requires several skills and a lot of luck. Failure is no fun and it can be incredibly painful.
The real meaning of “Fail Fast”
The real meaning of “fail fast” is to instill the notion that if, the business is not performing no matter what you do and has limited chance of becoming profitable, then don’t wait a second longer and shut it down.
Unfortunately, most individuals hang on far too long, hoping and praying that their situation will improve. They fail to look at the cold hard facts and let their emotions make decisions. They continue to drain their resources long past the point they should, only to end up worse off. Had they listened to that little voice in their head that was telling them it was time to shut it down, they would have been better off. In many cases, they’ve let their pride and ego get in the way of making the right decision.
The dangerous duo
Pride and ego can be a dangerous duo when it comes to making business decisions. Far to often, we have trouble believing we were wrong. Worse still, is the fact that we refuse to accept reality because we’re afraid of what people will think of us. Guess what? Most people don’t care. Once they find out, they’ll ask what happened, console you and then move on. End of story.
Failing, whether fast or otherwise doesn’t mean the end of your entrepreneurial aspirations. Much like learning to ride a bicycle, few of us ever did so without falling down a few times. After a few tears, we got back on and tried again until we got the hang of it.
Business is no different, except instead of a scraped knee, business failure hurts your bank account and can shatter your self-confidence. Money can be replaced but self confidence can be a lot harder to restore.
Understand what went wrong
The best way of overcoming a business failure, is to take the time to understand what went wrong. Every business has many moving parts and therefore taking the time to assess the good, the bad and the ugly of the failure, usually brings to light the deficiencies- yours and the business.
The following is 10 of the most important questions to help you understand what went wrong:
1. Was the business properly capitalized?
2. Were expenses, unreasonable, in hindsight?
3. Was there sufficient market research undertaken before launching?
4. Was your target market clearly identified?
5. Did you have any industry knowledge, prior to launching?
6. Were you passionate about your work/product/solution or just passionate about the possible financial reward?
7. Did anyone, other than yourself, care about your product or service?
8. Did market forces change after you launched? If so, what signal did you miss/ignore?
9. Did you have the necessary skill set?
10. Knowing what you now know, would you have started this business in the first place?
By honestly answering these questions, you’ll hopefully understand what the heck happened to your dream. Being stewards of our destiny, we must accept most of the blame. Failure should be a humbling experience that opens us up to learning from our mistakes. Arrogance, although a self protection mechanism, serves no role in this undertaking because it clouds your perception and risks having history repeat itself.
Raise your game
This introspective look at why a business failed, goes a long way to restoring our self-confidence, it raises our game. Because if we ever hope to be successful, we must first believe in ourselves and put our failures behind us.
It’s not how many times we fall down that matters, but how many times we get up and do it better that counts.
I’m Greg Weatherdon and this has been your Small Business Minute.