Many entrepreneurs stress the importance of bouncing back. As Bill Gates says: “It’s fine to celebrate success, but it is more important to heed the lessons of failure.” The best entrepreneurs use the experience of a faltering business venture to bounce back more forcefully than ever before with new projects.
There are several ways to bounce back strong after a business plan goes adrift.
1. Don’t conflate a startup’s potential
In reality, many startups don’t turn out quite as planned. A Harvard Business School study finds that 75 percent of venture-backed startups fail. However, many fledgling entrepreneurs only see examples of startup success in the media, with former startups like Snapchat, Airbnb and Dropbox among the numerous success stories. Especially with many of these former startups so prevalent in day-to-day life, the idea of startup success can conflate into an unrealistic vision.
The false impression of most startups finding success, when the opposite is true, can lead to some unwise entrepreneurial planning. Without recognizing the possibility of a given startup failing, some entrepreneurs can blindly devise a business plan without heeding any potential hiccups or bumps in the road.
If your business plan doesn’t go as intended, it’s worth evaluating precisely why that happened, regardless of whether you had anything to do with it personally. It’s also worth acknowledging that the venture simply ended up like many do, so don’t treat it as an indictment of your potential or talent. From Warren Buffett to Bill Gates, even the most successful entrepreneurs have their share of investment and entrepreneurial failures.
2. Realize that profit is rarely immediate
With some exceptions, new business undertakings are unlikely to be profitable in their first year or two. A piece of knowledge that a faltering business can provide is the lack of immediacy in success. When starting your next venture, it will be easier to remember the multitasking, demanding work hours and mental requirements of your previous venture, helping you to form a decision over whether or not it’s going well. This time, with the earlier challenges fresh in your mind, prudence will play a larger role in evaluating the success of a business idea.
Especially if your previous venture showed potential, but you lacked for capital to continue the experiment longer, it can be worthwhile to take some time off to gather funding before launching the next plan. Ideally, businesses should be able to support themselves financially for a given period, while buzz builds and the business model gets truly underway.
3. Merge new lessons with a new industry
A business venture that goes off-course can teach multiple lessons about that industry itself, particularly in how its customers react to a new product or service. Perhaps your business plan and idea felt solid, though the approach was not received well in the niche. If the product or service is in any way compatible with another industry, it can be very worthwhile to consider exploring that industry instead, especially if it’s an industry where you have pre-existing contacts.
4. Keep track of happy customers
Even if your previous business plan didn’t work out as planned, you could still have previous customers that were happy with the product/service, or even your charm as a salesperson. When getting your next venture underway, be sure to reach out to these customers, mentioning your connection to the business with which they’re familiar and happy. Ideally, you will be able to get some lucrative leads with pre-existing connections.
5. Take inventory
There are different levels of severity for a faltering business. Some failed business may drain investors dry, while others may have pulled the plug before serious damage occurred. Regardless, it’s prudent to take inventory of the funds and resources you do have. Taking inventory helps provide a realistic picture of when you can hop back on the horse and pursue a new idea, in addition to how much you can realistically invest in terms of money and time.
6. Define more realistic goals
Experience with a misguided business venture can help lead to more realistic goals in the future, with new knowledge surrounding what does and doesn’t work, in addition to realistic monetary expectations for the short and long-term within a specific industry. Plus, experience from past failures helps to correct and adjust in the future, enhancing your knowledge at the moment as you take action.
A wavering or unsuccessful business endeavor is nothing new to the majority of active entrepreneurs. What’s important is how you bounce back, ideally with more gusto and passion than before. Failure can result in expanded knowledge regarding more realistic goals, networking opportunities and personal strengths, helping to increase the likelihood of your next endeavor being a smash hit.
Culled from Entrepreneur