Uncertainty is an integral part of entrepreneurship: in life, as in business, things don’t always go as planned. Entrepreneurial failure is a common occurrence in the life of any entrepreneur. They can range from the failure of a new product launch to the dissolution of a company. In any case, there is never an easy failure.
These failures can :
undermine your self-esteem,
dampen your desire to move forward and pursue your projects, or motivate you to reinvent your business or invest in a new project.
The impact they can have on your confidence, emotional health, and financial situation should not be overlooked.
However, even if it is painful, entrepreneurial failure is normal and is not permanent. The phenomenon is even rather common since, according to the INSEE, one out of four companies disappears after 3 years of existence. Many successful entrepreneurs have started by failing, sometimes several times. Failure can even become a “secret weapon” if you consider it a learning experience.
Beestalent assists entrepreneurs and freelancers in all stages of their projects. Here is our method for bouncing back after an entrepreneurial failure.
Accept your entrepreneurial failure
The first step in learning to manageyour entrepreneurial failure is to unlearn the fear associated with it. It is necessary, as soon as you start your business, to accept the fact that failure can be part of the entrepreneurial adventure.
No one is infallible! Mistakes will be made, projects will escape your control and deadlines will not always be met. These difficulties are normal and often unavoidable.
Few projects succeed on the first try and no one expects you to grow… It is, therefore, useless – even counterproductive – to put yourself under such pressure.
Think about the root cause of the failure
Very often, the causes of your entrepreneurial failure are identifiable and relatively common. Among the main obstacles to the sustainability of companies, we find in particular the lack of liquidity, an inappropriate choice of legal form, the absence of a business plan… The factors of failure can also be exogenous; it is the case for example of companies which know difficulties because of the sanitary crisis like the COVID.
You can analyze the history of your business and see if you can recognize :
- the main causes of failure,
- and the decisions that led to those causes.
The more easily you can identify these, the more likely you will be to identify these indicators in the future and avoid the same difficulties in the future.
Take a break and step back
Failure can be emotionally trying. Certainly because entrepreneurship is not an easy task and it takes a lot of will, courage and self-sacrifice to dare the adventure.
As an entrepreneur, you have invested a lot of time, effort and money in your business… Recognizing that this project is running out of steam can be a real heartbreak.
Furthermore, a mistake that many entrepreneurs make when faced with a failure is to try to bounce back as quickly as possible.
While this is commendable, it can be akin to a headlong rush. Therefore, we recommend that you take a moment to mourn a failure.
Whether you need a day or a few weeks, you will always benefit from giving yourself time to digest what has happened. While you can’t always control the situation around you, you can always control your reaction to it.
Check your eligibility for bankruptcy proceedings
Several collective procedures can be used to stabilize and then redress the situation of your company. They are applied according to the difficulties you are facing and can act as a real lever to help you bounce back.
Depending on the seriousness of your company’s situation, there are 3 types of collective procedures:
- The safeguard procedure
- Judicial recovery proceedings
- The judicial liquidation procedure.
Surround yourself with the right people
The best way to bounce back from a failure and move forward is to gather new ideas to build a new project. At this point, you have already identified the causes of your previous business failure and you need to make sure you don’t fall into the same pitfalls.
To put all the chances on your side before taking the next step, we advise you to :
Seize every opportunity to exchange with other entrepreneurs and learn from their experience.
Talk regularly with your accountant. He or she is a valuable ally and a source of operational solutions throughout the life of your business, including in turbulent times.
Prepare for the next opportunity
Once you have conducted a thorough analysis of the causes of your business failure and feel that you have learned valuable lessons for the future, you are ready to begin preparing for your next opportunity.
You should be in a healthy enough position – psychologically as well as economically – to decide whether to return to entrepreneurship or to reorient yourself toward a traditional career.
Whatever your decision to bounce back from failure, start attending more networking events and talking to people outside your industry. In the case of a traditional career, this can open the door to new job opportunities. If you choose an entrepreneurial path, it could lead to meeting investors or partners who are valuable to the success of your new business.
Turn your business failure into a springboard
Having been at the helm of a failed business is not a sign of personal failure; rather, view this experience as an important step in a much longer journey.
By moving forward with more experience, more humility and a new plan, you’ll have a better chance of success in your next venture.
Famous entrepreneurs who failed first
Nelson Mandela once said “I never lose: either I win or I learn”.
Going in the wrong direction is neither a shame nor an inevitability. Personalities with diverse backgrounds have also experienced difficult entrepreneurial trials and have been able to bounce back and succeed after failure.
After dropping out of Harvard and after a first business failure with Paul Allen, Bill Gates launched a new company, Microsoft, which has now become a worldwide computer empire.
Before being at the head of one of the major players in the automobile industry, Henry Ford had experienced 2 bankruptcies.
At the beginning of his career, Walt Disney was fired from his job as a writer for lack of imagination and creativity. This failure pushed him to continue and create his own animation studio… which went bankrupt. This first failure did not discourage him, however, and he decided to launch a new animation studio, this time in Hollywood, with the success that we know.