Entrepreneur's struggles: how to recover from a business failure
Business failures and setbacks are inseparable parts of every entrepreneur’s life. They emerge out of nowhere, ruin plans and strategies, the development of which took so much time, effort and financial expenses. They may demolish your self-esteem and destroy the desire to move forward and continue to your business activities or motivate you to reinvent your business and work harder for success than ever before.
A single mistake or failure may throw all of your previous achievements in shade, damage your business reputation and reverse your business back to its starting point. However, no matter how terrible it is, the outcome of your business failure solely depends on you as a leader and your team as a supporting mechanism that brings your company into action.
The most difficult step on a way to overcoming your failures and turning them into positive learning experiences is defining and acknowledging your mistakes. You need to calm down, put your emotions and feelings aside and start figuring out which inner and outer factors contributed to the downfall and developing a recovery plan. If you don’t know where to start, use these tips to help your business regain its feet and start functioning even better than before.
Steps to recover from a business failure and make your company function again
1. Don’t take your business failures too personally
One or even a hundred failures don’t define you as a person or an entrepreneur. Your mistakes and business downfalls only showcase the effectiveness of your decisions. Sometimes, they even have nothing to do with your operation tactics, but rather the situation on the market and the country in general.
That’s why the worst thing a business owner can do after encountering a fail is to drown in self-bashing instead of working on your mistakes and bringing your company back to life. If you take your business failure as a personal one, you risk missing the recovery chance and losing your company. And don’t even think about blaming your employees for everything that’s happened. That’s a waste of time and resources as well.
So, pull yourself together, encourage your employees to correct their mistakes instead of dwelling on them and seek better opportunities.
2. Reach out to your customers
if the failure affected your customers, you need to contact them as soon as possible to make sure that they remain up to date with your attempts to fix the situation and don’t stop supporting your company. That’s the part of quality customer service every reputable company has to provide.
Try your best to make sure that your clients still receive the services they paid for even despite your performance issues. For instance, if you’re an owner of a general construction business and your team fails to meet the deadlines secured in the agreement, you need to hire extra workers or work extra hours to catch up.
3. Break it down
figure out what exactly went wrong. Talk to your partners and employees and go through each step, each decision that may have impacted the company’s development. Connect your operation with the situation on the market: which outer factors could make your company’s weak spots make it to the surface and cause a collapse?
Reach out to fellow businessman, who operate within the same/related industry, explain the situation and ask them about how their business is doing right now. Maybe, they may open your eyes to the issues you didn’t manage to notice. Maybe, they had a similar problem before and they may give you a few pieces of valuable advice. They may point out which resources you need to employ to make your company raise back to its normal operation and which factors you need to eliminate to avoid committing the same mistakes.
4. Pay more attention to financial management
Financial losses are often come hand in hand with business failures. Recovery takes some time and money as well. All of that means that in order to survive a catastrophe and handle it successfully, you need to control its development and prevent significant financial expenses.
Monitor your business’ money flow and try to fuel it up with ‘quick’ revenue — take up a few tasks you wouldn’t consider accepting before. That will not only improve your financial situation, but also distract your entire team from negative emotions and bring it back to the working mode.
5. Shift your focus
Don’t concentrate on your failures for too long. Go back to your regular business activities and start working on a new development strategy, taking into consideration the lessons you’ve learned when going through that downfall. Do your market research to design a more elaborate marketing plan and business model.
Move outside your comfort zone and introduce new operation activities you were afraid to apply before. Experiment with different approaches to find the most fitting ones. If nothing works out in the end, come up with something new instead of spending your priceless time and resources on trying to glue back the things that didn’t work that well.