As often as a startup begins, several fail. It may – hopefully not – happen to you.
But if circumstances collide and your dream is dampened early on, the best thing to do is to keep going – but not before scrutinizing your business plan and the steps leading up to the collapse.
Firstly, don’t beat yourself up over it. Countless ideas have been realized by entrepreneurs only to be crushed without funds, a competent and well-researched business plan, or even just the ambition to see the idea through. But also – realize where you went wrong and don’t be quick to place the blame on others, like the government, your incompetent business partner, or the realtor who sold you the property deemed the “Death Corner” by your neighbors.
“The reasons for failure cited by the owners are frequently off point, which kind of makes sense when you think about it. If the owners really knew what they were doing wrong, they might have been able to fix the problem,” writes entrepreneur Jay Goltz in a NYT blog item this year. “Often, it’s simply a matter of denial or of not knowing what you don’t know.”
Goltz owns five Chicago-based businesses, including Artists Frame Service and Jayson Home & Garden.
You may feel downtrodden and hopeless now, but you can learn from this experience. So how do you effectively deal with business failure?
Often it’s just a change of perspective. Thomas Edison failed 1,000 times before coming up with the light bulb. Yes, that’s a big one to live up to, but think about it – he kept going.
Learn from your (likely) expensive lesson – failing once is part of growing and learning process. But to repeat the same mistakes over and over again is stupid.
So how do you learn from your mistake and make sure that you don’t miss your lessons?
Do a post-mortem analysis. Analyze what went wrong with the failed business venture. Why did your business fail? What can you learn from the experience? How can you do better next time? What is the situation teaching you? List the answers to the questions and remember them so that you have something to refer to when starting your next venture.
And all small business consultants seem to agree on this one: start again. Entrepreneurs are tough, persistent and stubborn. Take a rest if needed but mentally plan to begin another business again in the future.