Q: After years of dreaming about starting my own business, I finally took the plunge a little over a year ago. To say the least, my dream quickly became a nightmare. The business didn’t do nearly as well as I had hoped. I ran out of money within six months and had to take out a second mortgage on my house just to keep things going. I have now closed the business and am left with a pile of bills that will probably put me in personal bankruptcy. I don’t mean to take it out on you, but instead of telling people how great having your own business is all the time you should also warn them that starting a business is not easy and can be devastating when things go wrong. — Gene K.
A: Gene, I hope that I have never given anyone the impression that having your own business is a walk in the park. To the contrary, I’m like the proverbial Chicken Little when it comes to warning readers of the obstacles and pitfalls that await those considering the entrepreneurial plunge.
To quote myself from a column I wrote earlier this year, “If it was easy, my friend, everybody would do it.”
Just to make sure we’re in agreement, let me reiterate the standard warnings once again. Starting a business is incredibly hard work. It takes long hours and deep pockets. It demands unbridled passion and unquestioned commitment. It requires that you give of yourself until you often feel there is nothing left to give. And sometimes, even after you’ve done all that you can do and given all that you can give, the business fails.
Period.
Blood, sweat, and tears can only carry you so far in the business world. Good intentions and grand ideas won’t pay the office rent. You can not make payroll with Monopoly money.
I certainly don’t mean to make light of your situation. In fact, I know exactly how you feel. I failed so miserably my first time in business that I swore I would never think about working for myself again. All I wanted to do was to find a nice, secure 9-to-5 job that provided me with a nice steady paycheck. I yearned for the opportunity to grow fat and happy on someone else’s payroll for a change.
I never again wanted to have to think about customers or employees or withholding taxes or accounts receivable or anything else even remotely associated with being in business.
I just wanted to crawl in a hole and die because my business had failed, and in my All-American, macho male, “you are what you do” brain that meant that I was a failure, too.
Getting over the failure of a business can be extremely difficult, especially if you are one of those entrepreneurs (like I was) who wrongly relates the success or failure of a business to the success or failure of you as a person.
The best way that I know of to get over the failure of a business (and the deep feelings of personal failure that go along with it) is to do an autopsy of the business to help find out exactly what went wrong. Only by discovering our weakness can we build on our strengths (Yogi Berra eat your heart out).
It took a long time and an enormous amount of reflection to realize that the business had failed for many reasons, not simply because I was a miserable excuse for an entrepreneur. I wasn’t looking to shuck the blame so much as simply trying to understand what really went wrong. A few years later when I mustered the courage to take the plunge again, I did so with the knowledge gained from my first failed business. I knew what I had done wrong and I knew what I’d done right. Lessons learned, put to good use. Knock wood, this time so far, so good.
Performing an autopsy on a failed business is a simple process, but one that can reveal a wealth of information that you can use should you ever decide to step out onto the business high wire again.
To do your business autopsy find a quiet place where you can sit and reflect on the life of your business. With pen and paper in hand (or laptop on lap) write down everything that you can think of that went right with the business and alternatively, everything that went wrong. Your goal is to create a “Success” versus “Failure” spreadsheet that will help you better understand exactly why the business went south.
For the autopsy to be effective, it is imperative that you are completely honest with yourself. Shove your ego in a drawer and be completely realistic or the autopsy will just become an exercise in futility. You will end up looking for scapegoats instead of reasons.
If your lack of experience was a contributing factor to the failure of the business, write it down. If your brilliant negotiating skills allowed you to close a big deal and beat out a competitor, write it down. If you were undercapitalized or incorrectly estimated your share of the market, write it down. If you had a partner who didn’t pull his weight or a product that didn’t sell as well as you thought it would or your building was flattened by an earthquake, write it down. Write it all down.
Once you have all the facts in front of you, it’s easy to see why the business really failed. You might be surprised to find out that the failure of the business wasn’t completely your fault, after all.
Then again, you might discover that the business failure was your fault. If that turns out to be the case, don’t beat yourself up for long. Not everyone is cut out to be an entrepreneur and that’s OK.
The world would be a miserable place if everyone sat around whining about their lack of customers or complaining about their employees.
Next time we’ll take a look at the primary reasons businesses fail and discuss how you might avoid them.
Here’s to your success.
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Tim Knox is a nationally-known small business
expert who writes and speaks frequently on the topic. For more
information or to contact Tim please visit one of his sites
below.
http://www.dropshipwholesale.net
