Talk to any successful entrepreneur and one thing you will learn from them is that failure in business is unavoidable. While this is the case, it becomes advantageous for an aspiring entrepreneur to equip him/herself with knowledge and skills on how to deal with failure in business when it so happens. In this article, I take a quick look at some of the best recommendations which can be adopted by anyone who might have encountered failure in business or wants to be knowledgeable of the steps to take after a business failure.
Recover Your Money
Venturing into business entails the expenditure of money in the entire investment process. Some would use money from their personal savings while others would resort to using debt for purposes of creating wealth. Whichever way, the moment a business venture fails you always emerge in a financially compromising position which requires that you take remedial actions to resolve your status. Some would suggest that if you have an emergency fund, tapping into it will bail you out since you will use that money to find another stream of income. To some, applying for an emergency loan proves might be acceptable where a payback plan is in order. Whatever alternative you might think of, what is important is for you to focus your efforts in recovering your money lost/trapped in a failed business.
Ensure For Psychological Recovery
The psychological state of an entrepreneur is always in question worse when any given entrepreneur encounters a gruesome business failure. More often than not, entrepreneurs put in a lot of hard work in building their business ideas into viable businesses and this usually becomes a heavy load to carry when they reflect on a business failure. Now, it is important that you spare yourself some time to heal your emotions and you can do this in many ways.
For some people, spending time with family and friends can do the trick as it gives them time to unwind and refresh. Support groups can also be viewed as valuable for entrepreneurs emerging from a business failure as it exposes them to people with various ideas on how to deal with such setbacks in life. In some instances, a business would have failed because the supposed founder was not in tune with his/her self. In such a case, setting some time out to rediscover one`s self may be the best course of action to take. Be that as it may, what is important is to ensure that your mental and emotional needs are kept at the centre of your mind.
Understand The Cause Of Your Failure
Usually when a business fails it either you failed to realise the warning signs early on or you chose to ignore them. This is because causes of failure in business are common and in most cases identifiable early on. Now that your business has failed and you failed to read the signs early on, I recommend that you spend some time looking over your business history. In your reflections, see to it that you recognise the main causes of your failure. Such causes usually point at a chain of decisions which would have been made before the eventual failure. Such reflections should be done with the sole intention to gain an understanding of the interrelations of decisions and the subsequent events. From this exercise, you will emerge with an in-depth understanding of what caused your failure and it is this understanding that will guide you in your future expeditions.
Prepare For The Next Step
Remember, a failure is an event from which we need to learn and better prepare ourselves for future occurrences. Therefore, having managed to recover your finances and heal your psychological state it is also important to search and prepare for the next opportunities. Depending on how hard you worked in the recovery process, within a month you should be well-positioned to soldier on in your entrepreneurial journey. It is thus encouraged that you first begin to consider working with other entrepreneurs to learn from their experiences and be acquainted with emerging lucrative opportunities. You can also resort to keeping a journal of ideas where you keep all your fledging ideas. If you happen to find a promising one, see to it that you come up with a [draft] business plan and/or prototype of the eventual product/service.
Remember To Stay Positive Always
In every arena of life maintaining a positive mindset will be an advantage which can bring you unimaginable positive results. In the turbulent field of business, a positive mindset is mandatory and this will prove crucial if you just emerged from a business failure. To maintain a positive mindset the first thing is not to let previous failures haunt you but use the lessons you learnt as inspiration nuggets moulding your attitude and approach in the next venture. Also, note that one of the causes of a negative mindset amongst business owners is a negative monthly cash flow. Being an entrepreneur emerging from failure you should then strive to invest your money conservatively in your next startup to have a positive cash flow in the best possible way. It is thus encouraged that you perform your research diligently while you retain the ability to scrap a bad idea in favour of new opportunities lying ahead of you.
From the above, what emerges as important is that we should rise whenever we fail and fall. In the process of getting back up, one should take time to heal and recoup all the lost energy to emerge as stronger, wiser and better equipped to take on next opportunities.