How to recover from business failure

 Failure is just part of life. When we learn a new skill
we fail at it time again before we get it right. It
happens when we learn to ride a bike or swim. If we
avoided failure altogether we’d never try anything
new.
 With so many startups failing, we should be sharing
our experience of failure. It’s this knowledge that can
help the failed entrepreneur and others learn
important lessons. Not talking about one’s failure and
hiding from it doesn’t help you get over it. And it
certainly doesn’t help you learn from the experience.
So, how should you deal with failure? Dr. Frank La
Pira, a blogger and founder, The Rebel Entrepreneur,
enumerates the following four steps to help
entrepreneurs recover from business failure.
Review
If you experience a failure, it’s important to talk
about it to your business partners, to your
employees and even to your business friends.
Because it will help you better understand what went
wrong, and because of its therapeutic value.
Understanding what went wrong will help you in
future ventures.
La Pira narrated his personal experience thus: “In our
family, it has been a topic of discussion for the best
part of 7 years since we lost close to 750,000. It’s not
because we love to dwell on it. It’s because we have
several businesses and the learnings from that
experience are invaluable.
When we started sharing our experience we learnt
some valuable lessons. Talking to friends in the same
industry we learnt that we’d spent too much on our
initial capital outlay. We had the money to spend and
we just spent it. The lesson, be frugal when starting a
business. There were many times towards the end
when that extra money could’ve helped.”
Some questions you should consider are; did I pick
the right target market, was my offering right for my
market, did I understand the competitive landscape.
Was my level of funding adequate for my industry/
market. Did I leave too many assumptions
unanswered and did I understand the industry I was
getting into. Was my strategy appropriate? Or was I
just a victim of an industry that has higher than
average failure rates?
“When I think about those questions I can say I didn’t
understand my target market, our strategy was
wrong. We left too many assumptions unanswered,
and we didn’t spend enough time getting to know the
industry. After our business failed we took a few
months off and wrote a case study on our
experience. It is a therapeutic experience and worthy
of your time and effort to write down what you’ve
learnt,” La Pira further stated.
In the strategy literature, there’s an argument that
the external environment plays a large part in the
success or failure of a business. But in
entrepreneurship we talk about business as if we
have total control over our business. The
entrepreneur is one of many factors that can cause a
business to fail.
Some industries have higher failure rates. You may
need a certain level of experience. Or you may need
access to limited resources, that are only available to
certain people. It could be that it was a competitive
market full of people who are there because that’s
what they love. Money is a secondary issue, think
lifestyle businesses. It’s important to consider that
not every industry provides the same returns.
Refocus
Now you have an opportunity to refocus your goals.
Through this experience, you’ve learnt a great deal
about your strengths and weaknesses and about your
values and beliefs. This is a great opportunity to
revisit your long-term goals and strategies.
With this knowledge, you can refocus and develop a
business with a better understanding of your values,
and beliefs. After failure, many entrepreneurs re-
evaluate their goals.
As part of the refocusing process, I recommend
taking the time to focus on your own well-being. It is
an emotional upheaval and taking time for yourself is
important in the process of moving on.
Reset
After our business failed we decided to take several
years off from operating our own business. We both
joined the workforce. It is important you spend time
exercising or on some other activities.
Don’t ignore your emotions. Let them out because as
you try to avoid them they will linger. Use that anger
and frustration to push you when you’re exercising.
Spend time outdoors. Go bushwalking, take a canoe
out on a lake or swim on a beach. Ride your bike
through a forest. Spending time outdoors will help
you get centred.
Restart
Not everybody returns to business after a failure. But
if you love the rush, excitement, and freedom of
doing your own thing, you need to get back on the
horse. Because nothing else will invigorate you as
much. The best thing you can do is to take the
learnings from that past experience into
consideration in your next business. This should be
part of your research when you are doing your
industry analysis and building your business model.
Failure is part of life. We cannot be brilliant at
everything in life the first time we try. Your role as
an entrepreneur is to learn that itfs okay to make
mistakes and fail. Yes, it is hard to recover from
failure. But it will make you stronger and wiser and
you will be grateful for the experiences.