As an entrepreneur, you’re going to fail a lot. In fact, a high percentage of businesses will fail and go out of business. However, from these small business failures, you can turn things around, right the ship and move back into calmer waters before the next storm hits.
The reality is, business failures are okay. What you gain from them is invaluable information. When you fail, it simply means you’re closer to accomplishing what you set out to do (assuming you don’t quit).
Business failure mean the way you were doing something didn’t work, and you have an opportunity to fix it and make improvements. Failure isn’t necessarily a bad thing — it’s a learning experience.
Take the good with the bad and know there will be ups and downs on your journey. Here are six business failures that every entrepreneur needs to embrace.
6 Business Failures to Embrace as an Entrepreneur
1. Missed Opportunity on a Key Deal or Contract
As they say, “You win some, you lose some.” Not every opportunity that comes your way will be signed in ink on the dotted line. You may miss key opportunities on deals and contracts for whatever reason.
Sure, it may have been the deal you were looking for and had high hopes that it would drastically change the business, but it didn’t pan out. Learn from it and move on.
Maybe one of the deals was with an investor who was going to provide you the capital needed to help build your business. In the end, the money was taken off the table and you were forced to bootstrap instead. This can build tremendous character, and when you ultimately succeed, it can bring you the confidence needed to keep moving in the right direction.
2. Losing a Key Client or Customer
Sometimes, a main client may suddenly leave at the end of their contract. That’s revenue you were expecting to have, and out of the blue, they ran off with your competitor. Learn from it.
Why did they leave? What happened? Call them and ask. Even if they don’t want to give you another chance, at least you’ll learn from such business mistakes and can make improvements with your next client or customer.
After losing the client, look at your pipeline and fill it with new clients. Consider it time to double down. This round, you know what businesses in your space demand and can provide a much better service so they want to continue doing business with you and furthering your business relationship.
3. Going Bankrupt
The biggest business failure you can find yourself in is filing for bankruptcy. Essentially, it’s the end of the line and there were far too many business mistakes made to turn it around and save the company. The outcome is to close the doors for good and move on. The sad reality is that this is extremely common for new startups.
There’s only so much money you can pull from your personal accounts, assets and loans. Eventually, when things don’t start moving up and to the right, the writing is on the wall that it’s time to face the harsh reality that your business has failed. Good news is, you know what NOT to do the next time.
If you find yourself in the situation where you need to dissolve your business, Incfile can help you through this mentally and physically draining experience by filing articles of dissolution on your behalf.
4. Hiring the Wrong Staff
We all make mistakes, both personal and business. That being said, hiring employees and staff is never an easy task. You’re basing your hiring off of their background, skill set, experience, personality and willingness to learn and take action.
Sometimes you make a poor judgment on someone and it doesn’t pan out. Maybe they were breaking company policies. Maybe they were stealing from the company. Whatever the case may be, hiring the wrong staff member and having to fire someone is never an easy thing to do.
Through these hiring mistakes, you can have a better idea of what to look out for. When you go to hire the next time, you’re better prepared to find a winner who can help take your business to the next level.
5. Getting Sued
Things could be going great when all of a sudden…BAM! Like a ton of bricks, you’re served papers that you’re being sued. It could be a customer suing you, an employee or even a previous employee. Despite your feelings at the moment, this too shall pass.
Taking it one day at a time can allow you to get stronger, more confident and able to see the light at the end of the tunnel. You may come out of the lawsuit (regardless of the ruling) a changed entrepreneur. What you learn from the experience can allow you to tighten up any loose ends that could create similar situations in the future.
6. Missing an Important Deadline
Missing an important deadline for a project is, unfortunately, a common business mistake. Maybe you bit off more than you could chew and are overwhelmed by the workload on your plate. Don’t let this lead to business mistakes number one or two mentioned earlier. Take such business failures and make the necessary improvements.
All is not lost though. Missing a deadline can open your eyes to some areas of your business where gaps are causing you to uncover business failures. This can let you know that it’s time to hire new staff to fill in these gaps and put new procedures in place to ensure projects are being completed.
Embracing business failure as an entrepreneur is vital to future business success. As always, Incfile is here to support you with your business ventures. Our expert resources can provide you with the knowledge you need to move your business forward.