Last Updated on April 1, 2024 by Lorna Barrow
My spirit was in turmoil and my body was feeling the stress.
I had too many sleepless nights…pacing my house in straight lines and in circles…
I was choosing my fingernails over steak and potatoes.
You see…my latest business MISadventure was causing me all this.
It was standing in line to be voted “small business failure of the year”. It was eating up money like I was buying ice and frying it.
I was powerless to stop it.
I was at that point where I was agonizing if to give it a chance by pouring more money into it or wondering if I should shut it down fast and cut my losses.
Not being sure what to do, I discussed it with an old woman who had operated a cottage industry for years.
It was an act of desperation really, because what could she know about business and small business failure that business school hadn’t taught me?
Her voice on that fateful day will forever ring in my ears: Lorna, don’t let that business eat wha’ it didn’t cook!
In a heartbeat I knew what I had to do.
Two days later, that business was in 17 boxes, there were lots of hugs and tears between me and my staff. But the key was handed back to the Landlord.
If you’re a serial entrepreneur like me, at least one business will start to “eat wha’ it didn’t cook” and you will have to close it.
You will dream of success but you will wake up to the nightmare of small business failure.
But what does that all mean?
Well, for me, nothing sums up winning and losing like the words of Winston Churchill:
Success is not final, failure is not fatal: it is the courage to continue that counts.”
This simple quote makes it clear to me that the much desired “success” is only part of the journey and the dreaded “failure” is not the end of the line.
The big question is how do you find the courage to continue after you fail, so that “failure isn’t fatal”?
In other words, how do you turn a certain small business failure into an amazing success?
Here are 6 important steps I learnt and always apply in my business and life, when anything that looks like failure raises it threatening head.
- Put things in perspective
- Remain in control of the process
- Keep your self-esteem intact
- Ask for advice and support
- Identify and learn the business and life lessons from the failure
- Suck it up and move forward
I also advise my clients to willingly follow these same steps and now I’m giving you the same advice.
You see, having them among your skills set is good for your self-development. Knowing them reduces the panic you feel when your business starts to fail. And you can add them to your business solutions.
1. Put things in perspective
Many times failure is success turned inside out – and full of lessons to take you forward.
Here’s an example.
Some time ago, one of my “mentees”, a young woman whom I love and respect, had a business that failed.
Both she and I did what we do very well – went into deep analysis to pull this failure apart.
We were looking for specific indicators of missteps so that she could learn from them and bounce back fast.
After all, “small business failure” was not on our list of things to achieve!
Before long, she called me and the conversation went something like this:
She: LORNA!!! Eureka, Eureka!! I know why the business failed!
Me: Do tell Darling, because I’m still looking…
She: The business was too small. I need to go big!
Me: Say what?!
Because she’s so compelling, because she’s so thorough, pretty soon I clearly understood what she meant.
By putting things in perspective, she realised that the business failed because the project required a bigger investment.
So we went from writing-off a failed $3 million business to writing a winning proposal for a $35 million business replacement!
2. Remain in control of the process
When you have a business which fails, it’s oh so tempting to go under your sheets and curse the success of anyone who started a business at the same time you did. And that business is still going strong.
Big mistake!
If you stay in business long enough you will experience failure in some form or fashion.
But whatever the nature of your business, you must remain in control of the failure process.
You must manage the closing down process of your failed business as actively and positively as you managed its opening.
Give your customers and suppliers adequate notice of the closure and be sure to thank them for their support during the life of the business.
Now, more than ever, it’s important to use good change management techniques to engage your people.
If you can, offer to find employment for them, they will be loyal to you forever.
Get out your pen and paper and list all the mistakes you think you made that led to the failure.
When I did this, being brutally honest, I came up with some powerful gems to lean on going forward.
Getting things into perspective and remaining in control of the process focuses you away from feeling sorry for yourself into being a success at a small business failure.
3. Keep your self-esteem intact
I am still amazed at the sources of self-esteem for many people: Cars, houses, clothing and yes…successful businesses.
When who you are is intricately connected to your business and it’s doing well, your self-esteem is correspondingly high.
Should you dare to experience that dreaded disease “small business failure” your self-esteem takes a nose-dive. Especially if you are left in debt.
But having a business that fails is no indication of your worth as a person. And guess what…you can default on your debt and still be a winner!
Even if you directly caused the failure, try to separate yourself from that reality and look at the problem objectively.
Chances are, your mistakes probably came from not understanding the business of being in business, not because you are a worthless person.
Come on, remember: YOU had the courage to start the business in the first place and you can find it again to start another one.
4. Ask for advice and support
You should have surrounded yourself with a “circle of experience” as you started your business life.
What I mean by a circle of experience is a group of people whom you have carefully selected to guide, advise and mentor you.
If you did, now is one of the best times to ask for their help.
Let me remind you, asking for help doesn’t mean you’re weak or not good enough.
Rather, it’s an indication that you’re tough enough to commit to solving the problem without letting your ego get in your way.
So go ahead, carefully choose your business mentors.
Select 3-5 persons (no more than 5 please!) whose advice and attitude you trust, and openly share your thoughts and feelings about your failed business with them.
If you choose the members of your circle carefully, you would have included:
- a shoulder to cry on
- someone whose had a similar experience
- a logical mind to help you determine your next steps
- someone to make you laugh
- and of course someone with deep pockets
When you surround yourself with mentors in this manner, your small business failure is shared and a burden shared is so much easier to carry. (According to my grandmother)!
5. Identify and learn the business and life lessons from the failure
Listen! When my business failed, the lessons I learnt propelled me to expert status in entrepreneurship and small business management in a matter of weeks!
For example, I learned about what I have termed “emotional selection of location.”
What do I mean by that?
I knew that that business was better suited to another location. But the one I chose was near home, in a mall that did not yet have any reputation so foot traffic was sparse.
I ignore those things because I did not want to drive into town. Even though I knew that there, the business would make a killing right out of the box..
And what’s more, I was forced to learn that landlords, female or not, are more interested in collecting their high rents than making any adjustments for the poor state of the economy.
But my biggest lesson had to do with my retail cash flow.
I learnt that you can conduct as much expensive market research as you like to define your customer.
Nothing impacts your cash flow like potential customers coming through the door and asking over and over for an item that you do not (yet) sell and you are forced to answer “No”.
And always remember, there are also big lessons in those things you did well. When you do, your business acumen will go through the roof.
6. Suck it up and move forward
Ruminating on the past is good for the lessons to be learnt…
But wallowing in self pity and thinking about how unlucky you are just isn’t productive.
You must attack the problem like a cancer that has invaded your body and make a new plan to move forward.
With your new information and insights, your confidence should be higher and you should do better the next time around.
So suck it up! Put on your super-size small business success attitude and get cracking on your next business! I bet you this one will be a winner!
Your next “small business failure” step…
Just remember…businesses of all sizes fail every day.
So when you experience small business failure, hey, all that really means is that you’re in business.
Let me remind you of the 6 things you can do to turn business failure into amazing success.
- Put things in perspective
- Remain in control of the process
- Keep your self-esteem intact
- Ask for advice and support
- Identify and learn the business and life lessons from your failure
- Suck it up and move forward
Now…if a business starts to fail, implement these 6, easy, proven steps fast, instead of reacting negatively.
Don’t get high on believing that you’re somehow exempt from failure. Instead, understand you can fail positively and productively.
That’s exactly what I did. I took my knowledge and added “Business Coach” to what I offer in another business and in so doing, I turned failure into success.
Follow my advice and my example and you can too!
