Have you experienced business failure before? How did you handle it? Failures are little setbacks that every person and business must experience. Research has shown that 30 percent of new businesses don’t last beyond two years and almost 50 percent only last for up to five years. This means for every two businesses, one has a high chance of failing without ever breaking even. However, an interesting fact also is that, 100 percent of businesses will face challenges that could end in failure.
This means all businesses will fail at one time of their existence or the other, and in one thing or the other. The difference will be in their resilience in the face of failure. Imagine that Thomas Edison had been stopped by failure. The world would still be in darkness. He failed 1000 times in trying to invent the light bulb, but to him, these were just 1000 ways he discovered that could not work. He saw them as steps to his business success.
SEE ALSO: 10 Successful Entrepreneurs Who Failed
Anyone who ever achieved anything great; anyone who changed the world, knew what it means to fail and how to face failure. Unfortunately, many people are just enjoying the reward of their determination to succeed but hardly reflecting on the price they had to pay, nor willing to go through the same. If everyone were you, where would the world be now?
Business failures are inevitable. There is no secret in business that will guarantee your every time success. In fact, the only thing that all businesses have in common is the fact they all have a failure story. All businesses have experienced failure at different times, levels and of various magnitudes. Those that went on to be a big success simply chose not to quit but to turn their failures into successes. This piece is intended to give you valuable advice that will enable you face all your business failures and turn them to success stories.
What Are Some Sources Of Business Failures
Failure has many roots. However, most business failures hinge on one or more of the following:
- Not well researched business idea
- Not well formulated business plan
- Not enough business capital
- Not good enough marketing
- Not well selected business team
- Not well thought of, business decisions
- Not well managed business resources
Whatever the reason for failures in business, they can be turned into successes when we know just what to do. So, one of the things you need to know is how to turn your business failures to success. This is the reason for this piece. As soon as you begin to experience failure of any form in business, don’t panic. Follow this process and you will be back on your feet.
Step 1: See Failure Correctly
One reason why people never achieve anything is because of their fear of failure. Why they fear failure is because of their perception of it, which depends so much on what they think others will think of them when they fail. And so, it is firstly all an issue of the mindset which should be dealt with. In my piece, “10 Successful Entrepreneurs Who Failed”, I shared some valuable information on how some of the greatest entrepreneurs we know failed, what they did, and what they said about failure.
Business is not for weak minds. It is for the rugged. It is for warriors. It is for people with large hearts; people who know that it will be worse not to do anything than to make an attempt and fail. Business is for risk takers and adventurers. If you are not described by those words, doing business is the biggest mistake you will ever make. Business is not for skeptics.
In order to succeed in business, you must begin to see failure differently from the way most people see it. Know that you will get to nowhere in business if failure means everything to you. Be ready for failure, but work hard for success. How do you see failure?
“In order to succeed, your desire for success should be greater than your fear of failure” – Bill Cosby
Step 2: Acknowledge Business Failure
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed” – Michael Jordan
Your business will not succeed because you refuse to acknowledge you have failed when you fail. It will succeed because you refuse to make failure, final. When you see failure as just a stepping stone to success and a comma in the sentence of success, you will continue and then finally get to success. This is important because some of the failure experiences come to redirect you to the right path. If you refuse to admit them and make the right changes, you will stay on the wrong path and never meet success.
Being able to recognize that a strategy, plan, product, idea, etc. is not working is acknowledging they have failed. This alone is valuable if you will end up succeeding. In fact, the best managers are those who know when to stop and when to keep on. When something is failing, acknowledge it and stop. You cannot expect different results when you keep doing the same thing.
“There are no secrets to success. It is the result of preparation, hard work and learning from failure” – Colin Powel
Step 3: Discover The Problem
Discovering the real reason behind the business failure is at the core of turning it to success. As soon as you recognized something has failed, the next thing that is crucial is to discover why it failed. This is by brainstorming and also making findings from staff and customers. Hold meetings to brainstorm with your staff. Don’t assume you know the problem. Be at the receiving end and make sure everyone else feels comfortable being open. Let it be a learning time for you. Take notes. You may even choose to design a questionnaire and collect data for this.
Some business failures could also be those than need you to talk with your customers. As such, don’t hesitate to find out from them. Your customers will tell you the raw facts of your business. The knowledge your customers have about your business is the best knowledge you can have. Any wise entrepreneur will do all to know what the customers think whether in times of problems or success. The simple reasons are that the customers see your business from a position that is unbiased and also compare it with your competitors.
The way to discover the problem is to gather as much facts as possible on your business from your employees and customers. However, at the end, it is your judgment that will stand. Thus you need to weigh the facts you gather, very objectively and in consultation with more experienced people, decide on the problem. Don’t be sentimental.
“My great concern is not whether you have failed, but whether you are content with failure” – Abraham Lincoln
Step 4: Analyze The Problem
After discovering where the problem lies, the very next thing to do is analyzing it. This is different from analyzing a business, where you may want to use SWOT (Strengths, Weaknesses, Opportunities and Threats). In analyzing the problem, your interest is to come out with the best solution. So focus on the solution than on the problem. Don’t also minimize the contributions from you employees, customers or even volunteers. This time, the intention is to get a solution to the problem and so you must focus more on the solution.
Some business problems/failures will have a clear and direct solution as soon as you identify them while others will have many ways of handling the issue. For most business failures, the problem is money. And so coming up with ways on how to make more money and reduce cost so as to cover expenses and make a good gain will be the solution. Sometimes, the real problems are dissatisfied customers, high staff turnover, more competitors, etc. Some of the following are some possible solutions to your business problem:
- Changing the management system
- Relocating the business for easy accessibility by customers
- Dropping the particular product or line of business for another
- Cutting down on some unnecessary expenses
- Cutting down to fewer staff with additional incentive for those remaining
- Replacing some of the staff with smarter, more competent ones
- Spending more on marketing, in order to generate more income
- Researching on what your competitors are doing which you are not
- Finding strategies that will motivate the staff to want to do better
- Revisiting and revising your business plan
- Coming up with a better customer care system
- Setting higher standards of performance for your staff
- Sourcing for more funding for the business
- Seeking business partnership
After brainstorming on the possible solutions with your staff and customers, you will have to go back and still brainstorm on the solutions alone. Remember that it is your business and every other person has little or no risk to shoulder. If you are unsure of the solution, seek counseling from business professionals.
Step 5: Take A Decision Fast
Decision-making is one of the responsibilities of managers. The ability to make the right decision as fast as possible is a quality all good managers must possess. As soon as you have decided on what the solution would be, make a decision and be ready. The decision may not be welcomed by everyone as some people will be affected negatively by it. That is part of the cost. Remember that the business is more important than any single individual.
In analyzing the consequences of your decision, think about how it will ultimately affect your finances, but don’t forget to think about all the different things that will be affected during the process. The process of implementing the choice solution could end up costing the business more than it will eventually bring. Think of this and make the right decision.
Step 6: Evaluate The Decision
It is important that after taking and implementing the decision for a time, you get back to the evaluation table with your staff. This is to see what has changed for the time the decision has been implemented. You must be convinced that there is a significant change before you continue in the decision. If not, you have to revisit your options and see if there is a better solution for the problem.
Note that your competence as a manager also lies on your ability to make the best choices for your business. Also, it is risky to keep trying different methods on your business. This is the reason you must get the smartest persons to work on your business. In times like this, you will have the best ideas. If you don’t, you need to get professional business help from competent business consultants. Here at WealthResult.com, you can have excellent business counsel specific for your business.