When Businesses Fail, Don’t Blame Others!
According to Inc.com, only 4% of businesses make it to the 10 year mark. Take a moment to let that sink in for a moment. Because if you have ever started a business, chances are it hasn’t made it to the 10 year mark. If it has, congrats. Go out and celebrate because you have beat the odds. Out of 100 businesses that started the same time you started, there are only 3 other businesses besides yours that are still operating.
Why do businesses fail? Well, that could take all day. There are a number of reasons. A few could include, poor planning, not understanding your market, not understanding the industry, shitty founders, or the inability to ride out the tough times. I’m writing this article to talk about that instance when you get into business with someone and it fails. You know, shitty founders.
When you’re creating a business it’s important to really think closely about who you want to grow a business with. The reason this is so important is because you will be come keenly aware of that person to the point where you will be married at the hip. And if you have even the smallest amount of disdain for this person, time will simply magnify this feeling not improve it. Think of going into business with someone as getting married to that person with one very distinct difference. Your entire marriage is centered around money. You know those arguments you have with your Wife/Husband about money? Now think of having a long-term relationship with someone in which the entire relationship is based around it. Now, go punch yourself in the face. Why? Because I’m saving you the pain now.
Going into business with someone take a tremendous leap of faith. One you shouldn’t take lightly. However, I’m here to tell you there’s hope. It’s not always bad. The only way to prevent problems down the road is to set clear expectations.
I was told once that I am a very pragmatic business person. That when people are in a meeting with me, I’m very data driven. I will ask a lot of questions to validate an idea on top of talking more about the creative side. The reason is because I need to make sure an idea passes my own tests.
- Will someone pay for it?
- If so, who?
- If so, how much?
- Does it pass the “5 year test?” In other words, will it still be viable in 5 years?
If I don’t think that idea will be around in 5 years, or the person is not capable to sustain it for 5 years, I don’t give a shit. It’s not that I’m trying to be rude or dismissive. It’s just difficult for me to see anyone building on something if they don’t think it’ll be around in 5 years. I want to get to the 10 year mark. I want to be a “4 Percenter.”
Now back to having shitty founders. You’re probably thinking to yourself that you are good judge of character. You have awesome friends you would happily get into business with. I’ll say this about getting into business with friends and family. Don’t fucking do it! Friends and family make the worst business partners. Unless your goal is to not have those people in your life when your business fails, avoid it at all costs. Holidays and those gatherings with your friends become pretty awkward if you’ve gone through a dumpster fire fuck up.
So how can you avoid the problems if you insist on going into business with your friends and family. Honestly? It’s no different than if you were to go into business with someone you barely know.
- Document everything
- Get everything signed
- Set CLEAR expectations
- Don’t let shit fester. If something’s not working, cut bait. Don’t keep spinning your wheels if something’s not working. Especially people!
- Have an “exit” strategy. What happens if the company folds?
The last one is back to my original point. When your business fails, don’t blame anyone else. It failed because you fucked up and made shitty decisions. Get passed it and don’t blame anyone for your shitty decisions. No one forced you to get into business. I mean, you’ve read the stats. 96% of companies fail to make it to the 10 year mark. If you go into business after reading that stat, than any failure is on you. If you think I’m lying go back and think about a company you were involved in that failed and ask yourself about those points I made above. If you didn’t do any of that and failed, you’ll have to pardon me while I sit over here and laugh at how fucking stupid that was. If you’re still blaming people for that, then you’re a fucking idiot who had no business creating something in the first place. You belong in a cubicle working for “the man” you drone!
However, creating a business is one of the most rewarding things you can do. It means you had the courage to take a chance. Think of it another way. 40% of people want to start their own business, but not many of them do. If you’re one of the brave souls that took a chance, then give yourself a high five. Just remember that you can do it if you make smart decisions, have patience, and recognize when you’ve fucked up. Just don’t blame others. Long live the Entrepreneur!
