The Business Failed, But Did You?

Q: After years of dreaming about starting my own business, I finally took the plunge a little over a year ago. To say the least, my dream quickly became a nightmare. The business didn't do nearly as well as I had hoped. I ran out of money within six months and had to take out a second mortgage on my house just to keep things going. I have now closed the business and am left with a pile of bills that will probably put me in personal bankruptcy. I don't mean to take it out on you, but instead of telling people how great having your own business is all the time you should also warn them that starting a business is not easy and can be devastating when things go wrong. -- Gene K.

A: Gene, I hope that I have never given anyone the impression that having your own business is a walk in the park. To the contrary, I'm like the proverbial Chicken Little when it comes to warning readers of the obstacles and pitfalls that await those considering the entrepreneurial plunge.

To quote myself from a column I wrote earlier this year, "If it was easy, my friend, everybody would do it."

Just to make sure we're in agreement, let me reiterate the standard warnings once again. Starting a business is incredibly hard work. It takes long hours and deep pockets. It demands unbridled passion and unquestioned commitment. It requires that you give of yourself until you often feel there is nothing left to give. And sometimes, even after you've done all that you can do and given all that you can give, the business fails.

Period.

Blood, sweat, and tears can only carry you so far in the business world. Good intentions and grand ideas won't pay the office rent. You can not make payroll with Monopoly money.

I certainly don't mean to make light of your situation. In fact, I know exactly how you feel. I failed so miserably my first time in business that I swore I would never think about working for myself again. All I wanted to do was to find a nice, secure 9-to-5 job that provided me with a nice steady paycheck. I yearned for the opportunity to grow fat and happy on someone else's payroll for a change.

I never again wanted to have to think about customers or employees or withholding taxes or accounts receivable or anything else even remotely associated with being in business.

I just wanted to crawl in a hole and die because my business had failed, and in my All-American, macho male, "you are what you do" brain that meant that I was a failure, too.

Getting over the failure of a business can be extremely difficult, especially if you are one of those entrepreneurs (like I was) who wrongly relates the success or failure of a business to the success or failure of you as a person.

The best way that I know of to get over the failure of a business (and the deep feelings of personal failure that go along with it) is to do an autopsy of the business to help find out exactly what went wrong. Only by discovering our weakness can we build on our strengths (Yogi Berra eat your heart out).

It took a long time and an enormous amount of reflection to realize that the business had failed for many reasons, not simply because I was a miserable excuse for an entrepreneur. I wasn't looking to shuck the blame so much as simply trying to understand what really went wrong. A few years later when I mustered the courage to take the plunge again, I did so with the knowledge gained from my first failed business. I knew what I had done wrong and I knew what I'd done right. Lessons learned, put to good use. Knock wood, this time so far, so good.

Performing an autopsy on a failed business is a simple process, but one that can reveal a wealth of information that you can use should you ever decide to step out onto the business high wire again.

To do your business autopsy find a quiet place where you can sit and reflect on the life of your business. With pen and paper in hand (or laptop on lap) write down everything that you can think of that went right with the business and alternatively, everything that went wrong. Your goal is to create a "Success" versus "Failure" spreadsheet that will help you better understand exactly why the business went south.

For the autopsy to be effective, it is imperative that you are completely honest with yourself. Shove your ego in a drawer and be completely realistic or the autopsy will just become an exercise in futility. You will end up looking for scapegoats instead of reasons.

If your lack of experience was a contributing factor to the failure of the business, write it down. If your brilliant negotiating skills allowed you to close a big deal and beat out a competitor, write it down. If you were undercapitalized or incorrectly estimated your share of the market, write it down. If you had a partner who didn't pull his weight or a product that didn't sell as well as you thought it would or your building was flattened by an earthquake, write it down. Write it all down.

Once you have all the facts in front of you, it's easy to see why the business really failed. You might be surprised to find out that the failure of the business wasn't completely your fault, after all.

Then again, you might discover that the business failure was your fault. If that turns out to be the case, don't beat yourself up for long. Not everyone is cut out to be an entrepreneur and that's OK.

The world would be a miserable place if everyone sat around whining about their lack of customers or complaining about their employees.

Next time we'll take a look at the primary reasons businesses fail and discuss how you might avoid them.

Here's to your success.

Tim Knox

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.

Related Links:
http://www.prosperityandprofits.com
http://www.smallbusinessqa.com
http://www.dropshipwholesale.net

---

Franchise Rule to be Revised; Why?

The FTC, Federal Trade Commission, is considering modifying the franchise... Read More

Creative Marketing Tips: Simple Things You Can Use In Your Business To Attract More Clients

The single most important activity you can do in your... Read More

Start a Technical Writing Service

Technical writing services are employed to explain the details of... Read More

How to Effectively Design Your Business Image

In many industries, image is one of the last things... Read More

How to Find Success in the Import Export Business

Take advantage of world politics today and start your own... Read More

A Day in the Life of a Self Employed Professional

It's Monday morning and Connie the Consultant sits in her... Read More

Finding the Right Virtual Assistant for Your Small Business

Articles abound advising the business community how to properly screen... Read More

Should I Franchise or Not?

A reader of one of my online sessions asked should... Read More

Pressure Washing Business Case Study, Tractor Cleaning

So often small service businesses fail to exploit niches, which... Read More

Take a Break - Have a Pity Party

Pity parties are nothing new. In fact, we do it... Read More

11 Benefits of Starting a House Cleaning Business

One of the biggest fears people have about starting a... Read More

A Key to Success: Be Consistent

Over the years I heard the best way to learn... Read More

Do Your Best; Hire the Rest

One of the hidden perks of raising six children is... Read More

Round Pegs In Round Holes: The Amazing Secret of Succeeding in Any Business Every Time!

Success is the desire of everyman on the face of... Read More

Alliances: What works, what does not

Why Alliances FailWhen do you know an alliance is falling... Read More

Women and Small Business

In the book Women and Small Business author gives all... Read More

Uncover Free Veins Of Gold By Prospecting Online Guru Newsletters (Part 1 of 2)

Incredible as it sounds, you have a goldmine of free... Read More

Find Some Sample Payroll Check Stubs on the Net for Easy Reference

Starting a business? For many people, the bravery to venture... Read More

11 Things Small Business Owners Can Learn From Tiger

1. There Are No "gimmes" ? They count two-foot putts... Read More

Small Business Franchise Opportunities

Many businesses offer small business franchise opportunities. There are many... Read More

Dispute Resolution; Competing With Other Franchisees

If you are in a franchise and have a territory... Read More

Is Your Business Property Safe and Secure?

Security Professionals provide the products and services necessary to create... Read More

Drivng Home the Point - An Outsourcing Story in China

A few years ago, I visited Beijing for the first... Read More

Small Business Success Tip: Learn Something New Everyday

Your grandfather probably told you to "learn something new everyday".... Read More

Cabinet Refacing Business Opportunities

With all the cabinet refacing business opportunities out there, you... Read More

Success & The Nature of Things

The story is told of a tiger chasing some goats... Read More

More Rules for Franchising?

The FTC- Mighty Federal Trade Commission has unilaterally decided to... Read More

Entrepreneurs Go Virtual!

With the massive explosion of start-ups and home businesses developing,... Read More

Is Your Small Business Name Important?

You bet a name is important. Many small business owners... Read More

You Dont Yet Know What You Dont Know

Someone new to business ownership recently told me, "Before I... Read More

Nevada Incorporation: The Advantages of Incorporating in Nevada

Incorporation in Nevada has become an attractive option for savvy... Read More

Small Business Secrets: Self-Confidence Can Be Arranged

At first blush this idea might be difficult to wrap... Read More

Why Internet Shopping is the New Mall of the Future

Last year, trillions of dollars transferred hands on the internet... Read More