Here’s the thing: Not every business succeeds. You can see that any holding company might have multiple business failures. Sometimes, you can do everything right, from planning to execution, but your business might still crash and burn. Indeed, almost a third of all small businesses fail within the first two years of operation, and two-thirds are gone before 10 years are up. Odds are, your first business or two won’t survive long – and you should emotionally, financially and logistically prepared.
In fact, you can begin preparing for business failure long before you launch your business. Here are a few ways you should begin cultivating a healthy mindset – and a secure safety net – should your big dreams of business ownership fall flat.
Gain Credentials To Save Your Career
You’ve probably considered enrolling in an MBA program or pursuing a similar business school degree to better prepare yourself for your entrepreneurial dreams. Indeed, advanced education of this type will equip you with the management knowledge and skill necessary to launch and run a successful venture. Plus, investors and banks will be more likely to give you funds when you can demonstrate enviable business credentials like an MBA.
However, MBAs are also useful after the fall. It’s unlikely that you’ll have the energy, motivation and inspiration to launch another business immediately after your first attempt fails. Yet, in the interim, you will need some sort of income. An AACSB online MBA program – which is judged to be up to high standards of on-campus MBA programs – is an eye-catching feature on any resume, so it is sure to land you a management job to fill your time (and your bank account) while you scheme your next entrepreneurial move.
Recognize That Failure Isn’t Personal
Your business didn’t fail because you are a failure. Though some entrepreneurs make major mistakes that cost them their business, you shouldn’t take your business flop personally. Avoid intrusive thoughts about inadequacy, regrets about ever venturing into entrepreneurship or criticisms of your dreams and goals. Doing so will only push you into a life of mediocrity (at best) or severe mental illness (at worst).
You aren’t doomed to bad luck because of this one misstep. In fact, you should see this business failure as an opportunity to learn and grow. Cheer yourself up by realizing that you are one of the few brave enough to launch into entrepreneurship, and start listing the things you did right. You should surround yourself with your greatest supporters – friends and family, career mentors, etc. – and prepare yourself for your next career move.
Try To Fail As Fast As Possible
You should try to get a big failure out of the way fast. If you suspect your business is in an untenable position – one you are incapable of salvaging – you might want to walk away from your business sooner rather than later. The longer you draw out the failing of your business, the less time you will have to develop a new business and accrue personal wealth. Thus, you should remain receptive to the performance of your business and realistic about its prospects, so you can fail fast and get back on your feet faster.
Learn From What You Did Wrong
A popular definition of insanity is doing the same thing over and over and expecting the outcome to change. If you don’t perform a post-mortem on your business, you can’t ever be sure exactly what you did wrong, which means you won’t change your strategy or behavior the next time around and your future businesses will likely crash and burn, too.
Allow Yourself To Mourn
While you should be proactive in dissecting your business’s charred remains and finding a new job, you shouldn’t stop yourself from feeling sad. Your business was like your baby; you cherished the idea of it, you worked hard to see it grow, and to watch it fail to thrive and ultimately die must have been traumatic. You should allow yourself to work through the stages of grief, from denial through anger and sadness to acceptance. By giving yourself space to feel, you can come to a healthy place where you will begin to imagine yourself again bootstrapping another business plan.
Failure is inevitable. Fortunately, failure is also somewhat beneficial. As hard as it is to let your first business go, it is important to learn from your mistakes and move on to bigger, better and more successful things. With the right education and experience, and entrepreneur can do almost anything, so you shouldn’t be afraid of failing a few times; it just means success is around the corner.