The Valuable Lessons I Learned From My First Business Failing
Starting your new business venture with only optimism and hope in your mind can be an exciting experience filled with limitless possibilities and great potential for success. However, the reality is that 20% of new businesses fail within the first year and 60% do not make it past three.
As someone who was part of the failure and is now successfully joining the winning team, I can attest that the road is not easy and I wish I knew these things before I first started. However, the best lessons are the ones that come from our darkest moments and I am grateful for my struggles and grateful that I get to pass on some lessons I have learned along the way.
These Are The Most Important Lessons I Have Learned:
Pick Carefully
Having wonderful and reliable partners makes success a much easier goal to achieve. It not only takes off some of the workload and pressure but it becomes harder to fail when you are working alongside brilliant people or companies.
Choose your partner or partners very carefully—ones that you can rely on and who have been there and done that. Avoid starting a new business unless you and your partners have practical, real-world experience in that field.
Success and Sacrifice go Hand in Hand
As an entrepreneur, you have to be prepared to take risks and make sacrifices, whether that’s not celebrating a friend’s birthday because you have to work or working long days away from family.
Be prepared to sacrifice a lot down the line, but with time and I mean, in a long time, this will be a huge payoff and at some point, you’ll be able to delegate that work and time to others.
It’s Stressful
It’s hard to think initially that your brilliant business plan will be met with trials and tribulations, but things will go wrong and when they do, they will create a lot of stress. This can affect people around you.
So my advice would be to try to not only bring business home but to attempt to handle these problems with grace. I always hear you attract what you give, so practice mindfulness and do your best through these stressful times. It is best to be mentally prepared for it.
If you don’t handle stress well, I am afraid starting a business might not be for you.
Fund With Your Money
When you’re earning enough capital, you should reinvest that in your business. This will give you a lot more control. When you depend on others for your working capital, they are in control.
You should be in charge of your business; if you need money from other sources, make sure you’re reading the small print and can use it however you please.
Never Assume
Assumptions can give you a false sense of reality and give you the idea that everything is fine and dandy. Business is fluid and constantly changing so the assumptions you made in your business plan are almost definitely wrong.
Try and test these assumptions before you accept them as facts.
Good Luck and Avoiding The Bad
In the pursuit of success, unexpected things happen that can affect the business climate. For example, right now we are in a recession, which is bad luck for most businesses.
Knowing how to navigate and be prepared for the worst is necessary. In some cases, being caught up in the bad is unavoidable but luck does play a critical role in success.
Trust Your Intuition
Your subconscious and gut feelings can sense things before they even happen or things that might be invisible to you just yet. Always listen to your intuition, which tells you what is a good idea and what is not.
This will help you not only trust yourself but also make you a lot more confident in your decision-making processes.
Pilot New Ideas
Test your new business ideas before diving headfirst into anything. Even the most successful businesses have launched campaigns and products that were a complete bust, although they could afford to lose them. It just shows that no matter how amazing your brand image is, you should always pilot ideas.
The Rule of Three
Whatever timescale you give your new business venture, it will take three times longer than you think, cost three times as much as you expect and revenue and profits will be one-third as much as you forecast.
It’s important to try to be prepared for every worst-case scenario. They always say that if you can’t afford to buy something twice, you shouldn’t buy it. Well, in this case, I’d recommend you always have a backup for costs and aren’t working towards a strict deadline to relieve some of that pressure and stress.
Consider Credit Insurance
This will be completely dependent on your business but it is extremely useful if you are involved with sales. Waiting and chasing for invoices to be paid on time from your consumers or vendors can be time-consuming and costly.
Being a small business, you need your invoices to not only make a profit but also to meet your costs. This can not only stunt any growth but also drive your business into the ground, as one week you are turning a profit and the next week you’ve got no money to pay the bills.
Be prepared to budget with a credit insurance broker while taking some strain off your resources and ensuring you’re paid on time every time.
Final Thoughts
At the time of a business failing, it can feel like the world has ended. So much time, effort and money goes into setting up a business, as well as passion in my case, only for it to not work out. However, looking back, I’m actually glad that it ended up as it did, because it taught me so many valuable lessons that enabled me to grow as a business person and run many successful businesses since. My best piece of advice to people starting out in business is to never give up, as sometimes things out of your control contribute to a business failing, but it’s all about being resilient, knowing when and where to invest and not giving up when things get tough. Running a business isn’t easy, but the rewards you can reap are exceptional, so if you’re passionate about it, willing to work hard and are committed to providing a quality product or service, then you have every chance of running a successful business. Hopefully you can learn from some of the mistakes I made with my first business to give you a headstart.
