What to Do When Your Business Fails
I have crashed more businesses than those I have moved from ideas to success. So I have an idea of what it all means when a business fails.
The first time I did a business was when I was a student of University of Benin. I became a drawing board “merchant.” The “business” started out of impulse. I did not have any idea of what to do when a business fails so when it did, I simply moved on after moaning it for about a week.
After that experience, I started a media firm also while in school. Through it, I published a magazine that sold in over 22 cities in Nigeria. We stopped at the third edition. Then I started a cleaning firm which failed just about 6 months after it started. There are many others that came after that. So, I now know what to do when a business fails.
I’d like to share with you what I told an audience of business and career people in an event I spoke at last Saturday. I said;
Failure is good. The more you fail in business, the more likely you will succeed in one soon!
What is a failed business?
A failed business is one that no matter what you do, revenue will always be less than production costs.
What to do when business fails
- Be sure it has actually failed: The fact that a business is not making money does not mean it has failed. And the fact that it is making money does not mean it has not failed. How do you know when a business fails? Refer to the definition I wrote above about what a failed business is. So, check your business and be sure if it has really failed.
- Bury it: If a business fails, the best thing to do is to “bury” it and move on. I have seen many people who hold on to businesses that have failed already and continue losing money. If nothing you or other people do to the business can bring it back on its feet, close shop and walk away. There’s no need holding on to a corpse. Simply harvest the vital organs and keep them for the next endeavor.
- Moan it and move on: It is not wrong to feel bad if your business fails. So, take some time out to cry if you have to, have a pity party if you want to. But after that, stand up and move on. Don’t ever wallow in self pity after you are done. Whenever the thoughts of failure come after that, speak out loud and say “I’m a success.”
- Evaluate: Ask yourself “why did the business fail.” The reason for this exercise is to glean as much lessons as possible from the experience. Ask specific questions like “what mistakes did we make in marketing”, “what lessons can I learn from the way we treated our employees?”, “If I was given the chance to do it again, what will I do differently about this decision or that decision?” Document your findings and watch out to avoid repeating same mistakes again.
- Start something new: The best cure for business failure heartbreak is a new business that is working. It is like a woman who has lost a child through a miscarriage. The best way she can be comforted is to get pregnant again and actually give birth to a child. But do not start big things. Start little things, grow them and build your confidence little by little.
If the above points do not help you as much as you anticipate, let me know your specific situation. Then we can work something out.
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