All entrepreneurs have been told that over 90% of startups fail within the first few years of operation. This can happen due to a number of factors, including poor financial management, a flawed business plan, and an inadequate understanding of the chosen market and the demands of customers. Although it feels awful to fall short of the goals and ambitions you laid out for yourself, it’s not the end of the world.
Failure shouldn’t be something to be feared or embarrassed by. It’s actually one of the best teachers any aspiring entrepreneur can have since it’s the perfect opportunity to figure out what went wrong so that it can be avoided while going forward.
Below are some lessons to learn from a failed business venture. These pieces of advice aren’t foolproof ways to prevent your business from failing, but they can certainly help prepare you for the challenges that lie ahead.
Know when to let go
The sooner you let go of a floundering commercial venture, the more time you have to work on your weaknesses and the quicker you can move forward. Rather than holding on to an idea that just isn’t working, you should know when to accept that you’re better off either abandoning or selling a business. There are plenty of better ideas to pursue, and more opportunities to correct the mistakes you made the first time around once you forgo your initial plans.
Define what success means for you
There’s no doubt that a business that isn’t turning any profit has failed, but there are times when failure can also be subjective. Success can mean making millions of dollars a year and growing at an exponential rate, but it can also mean just having enough to cover overhead costs and basic living expenses. If you fall short of your lofty ambitions, it doesn’t always mean you’ve failed. It just means that perhaps you need to define what success truly means for you and adjust your expectations.
Work with the right people
One of the biggest mistakes that fledgling entrepreneurs make with their first start-up is thinking they can do everything on their own. The truth is, it’s just not possible to be a sales associate, marketing director, accountant, and chief executive officer all at once. This is what having an expert team is for. If trust is a bit of a concern for you, then you should make sure to hire only the best people for the job. The same goes for business partners and investors.
Always anticipate the worst
While it’s not good to be consumed by the possibility of failure and to always focus on the worst, it’s still helpful to at least anticipate it and be prepared for when it eventually happens. Before it even occurs, you should already have a post-operation roadmap in place where you examine what happened, what went wrong, why it went wrong, and what you can do better moving forward. The data gathered from this analysis can be used to improve future ventures and projects.
Don’t lose your motivation and drive
Sometimes, a business can fail even with a great idea, a solid business plan, and sufficient market research. One of the reasons this happens is because many emerging entrepreneurs severely underestimate the value of passion and motivation when running a business. Caught up in the excitement of the early days of establishing their very first start-up, think they’ll just never run out of it.
The unfortunate truth is that it’s easy for newbie business owners to lack the motivation and drive to keep giving it their all. There will come a time when they will lose track of why they started their business in the first place. In order to prevent this from happening, you should make sure that you have a firm grasp on why you’re doing what you’re doing and what your goals are for the future. Review these objectives and ambitions from time to time, and remind yourself to focus on what matters most.
Listen to the customer
You’ve probably heard of the saying “the customer is king,” right? There’s a reason it’s a popular saying. Failing to listen to what the customer actually wants is one of the most common reasons why a business fails. Your product or service can be the best thing out there, but if no one wants it or needs it, then your business will most likely fold within the first few years of operation. Make sure to do your market research and think about how your products and services can solve a problem or satisfy a need that your customers have.
Keep your ego in check
Confidence is key, but too much confidence can be disastrous. Inflated egos can annihilate even the most successful businesses in the market. Running a business is a team effort, and there’s no room for a big head. It’s important to temper your expectations, be grateful, and stay humble.
A failed business isn’t something to beat yourself up for. Rather, it’s an opportunity to propel yourself to greatness.