Bouncing Back From Business Failure

Not all businesses become successful. Some fail after only a few months of operation.

Failure in business is not caused by just one person or an overlooked incident. There are many reasons why a business fails.

The most common causes are:

1.    The product offered may not be unique. There may be a lot of similar products on the market. To stand out, entrepreneurs must focus on their product can be something that the public will want over competitors.

2.    Poor customer service. This is one particular factor that is very important in any kind of business. As an entrepreneur, you must always ensure that your customers are always given proper courtesy when they seek assistance. Employees/salespersons should be properly trained to deal with customers.

3.    Lack of leadership. Supervisors and managers should lead their teams to ensure that the quality of a product or service. The leader of the team has the responsibility to make the right decisions. Entrepreneurs themselves should also have the right skills to be effective leaders to their employees. 

4.    Insufficient capital. You may have a great idea on how to run your business. But if you lack capital, the business may not last. For the initial phase of the business, you need to make sure that you have the means to cover your overhead expenses such as the salary of your employees, store or office lease, taxes, suppliers, etc.

5.    Incompatible business partners. Choosing the right business partner is crucial. It is not enough that the person you have in mind is a friend or recommended by a friend. You need to look for a partner that has the same vision as you and has a wide perspective with handling a business. More than the financial aid that the partner can provide, you and your prospective business partner should have a good relationship.

6.    No clear target market. You should be clear about your target market. The same goes in choosing the right location to offer your products and services. If you are offering high-end products, the business is unlikely to prosper if your shop is located in a place not frequented by high-end shoppers.

7.    Unscrupulous spending. Always remember that your business is not your bank account. Do not overspend by taking out most of the money that your business needs. This is a very common mistake among new entrepreneurs. The moment that their business starts to grow, they hop on to the next plane to Europe. Entrepreneurs who have this mindset will see their business fold after a while.

How to get back on your feet after losing a business?

Entrepreneurs are risk-takers. A real entrepreneur does not give up as soon as he encounters a problem. To get back on track, entrepreneurs should be able to do these:

1.    Think if you are ready to start all over again. Even if you already have the capital needed to start a new business, it is important that you see yourself having the enthusiasm to go on. It is hard if you just push yourself to start any kind of business even if you know that your heart isn’t in it.

2.    Ask yourself why your business failed. Identify the possible causes of failure so that you can avoid it from happening again. Allow yourself to polish your skills and improve yourself to minimize potential faults. It may not always be the entrepreneur’s fault, however, it is the entrepreneur’s responsibility to look through everything and carefully choose the right people to work for him. You may not know everything, therefore, looking for an adviser or business mentor may just be of great help.

3.    Create a better business plan. Never settle for having just a “Plan A”. No matter how perfect the plan may seem, it is always wiser to come up with a back-up plan, just in case.
Keep in mind that things may not always go according to plan. But always keep your eyes wide open so that you can save your business before it completely crumbles.

Losing all that time and money can dampen anyone’s enthusiasm. However, not all is lost when you learn from your failure.