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So Your Business Failed. Now What?

Your business has run into trouble and you just can’t make it work. Think your days as an entrepreneur are all done? Not so fast. Instead of just walking away when things don’t work out, here are a few steps to help turn what may seem like an epic business fail into a stepping stone to your entrepreneurial success.

Realize You Aren’t The Only One

If your first (or even second) business hasn’t succeeded, it’s important to understand you’re not alone. In Canada, almost half — that’s 49 per cent —  of new businesses fail within their first five years, according to The State of Entrepreneurship in Canada. So though you may feel isolated and alone, you aren’t.

Assess The Damage

Businesses that don’t succeed may have far-reaching effects on everything from your finances to your reputation and feelings of self-worth. As unpleasant as it may seem, take care of each “disaster area” quickly — the more you procrastinate, the more difficult it will be to move on from this experience. This may require meeting with your bank, real estate agent, and accountant to discover your options for paying off creditors and for meeting your own personal financial obligations. It could mean laying off staff, and even helping them find new positions with other firms. Gaining a clear understanding of just where you are financially gives you a starting point to set out from.

Take a Break

A business flop causes stress for all involved, including your family members and yourself.  Stress, exhaustion, and depression in entrepreneurs are very real issues, even when business is booming. Before committing to a new business or career path change, do your best to take a break from anything work-related to help yourself de-stress from recent events. Even if you can only spare a few days, use this time to rest, exercise, and pursue other non-work interests. After all, you are a person, and not your business.

Reframe The Experience

To make the best use of your business “fail” going forward, change your internal dialogue, or what you tell yourself about the experience. Instead of saying “well that was a complete failure”,  consider it a learning experience and a step in your entrepreneurial journey. Ask yourself “What were the key lessons? What will I do differently the next time?” 

Don’t think of this experience as the end of your business career, but just a stage in your entrepreneurial life, and know that your odds of success will increase with your next venture.
In fact a 2014 Stanford University/University of Michigan study found that repeat entrepreneurs were much more successful in their subsequent attempts than they were at first (and this study followed retailers in Texas for 22 years.)

Plan for Future Business “Hiccups”

To succeed in business after failure, capitalize on the lessons you’ve learned. The next time around, expect that things won’t go as planned — stay flexible and have a Plan “B” (and maybe a Plan “C”) worked out. Take time to research and test your business ideas prior to launching, and avoid those business ventures statistically most likely to fail.

Everyone experiences setbacks in business — and some of them will be more severe than others. Learning how to cope with these setbacks and reframe them as important lessons instead of failures will help them become valuable experiences on your road to business success.