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

---

Mattress Cleaning Business: How To Manual

A Mattress Cleaning Business might be just for you if... Read More

Small Business Marketing, According to Seinfeld

What could Seinfeld possibly have to do with marketing a... Read More

Small Business and Branding ? Why and How?

When we speak of branding most of the time people... Read More

Why Small and Medium-Sized Businesses Should

As the owner or an employee of a small-to medium-sized... Read More

Small Business Pricing Strategies

TACTIC #1 -- Never simply slash your prices, unless you're... Read More

Small Business - Would You Still Need An Accountant If You Didnt Need A Tax Return?

After over thirty years advising small business it still comes... Read More

Not Listening Can Hurt Your Small Business

Most small business owners seek advisors who can help them... Read More

The Responsibility Conundrum - Where art Thou?

Mr/Ms, 'not me' is often on holidays in your business.... Read More

Do Home Businesses Complicate Small Business Debt Collection Laws?

The home-based business market, sometimes called the SOHO (small-office/home-office) market,... Read More

Beating the Small Business Cash Flow Blues

Small business owners can relieve a lot of their own... Read More

Small Business No How - Dont Give Away the Farm

You're pretty proud of yourself! After all, only four months... Read More

How to become a Career Coach for Profit

A career coach could be simply defined your job seeking... Read More

How to Bond a Business Relationship

When should you create a foundation in order to solidify... Read More

Racing the Competition

What is the Big Race all about when it comes... Read More

Have You Thanked Your Competitors Today?

Competition in the business world is often viewed as a... Read More

Small Business And The Ability To Find Market Place Opportunities

Marketing is one of the four corner-posts of a solid... Read More

Image is Everything - Secrets to Cleaning Car Fleets

A recent survey indicated that clean Taxi Cabs Fleets have... Read More

Pressure Washing Heavy Equipment

One of the best ways to make money in the... Read More

Employee Monitoring - Business Risks For Employers And How To Avoid Them

E-mail and Internet use are integral parts of the typical... Read More

There Is Security in Change... But Use Caution

It has been said that the only constant is change.... Read More

Procrastinate Your Way To A Successful Small Business

What will your business look like a year from today?If... Read More

Successful Small Businesses Use PR

It's obvious when a small business has accepted the fact... Read More

Home Based Franchise Case Study

Here is an interesting case study of a company, which... Read More

The Hidden Treasure in Your Business

I started working with another new client last week. He... Read More

Conquering Confidence Killers for Small Business Success

"The way to develop self-confidence is to do the thing... Read More

Building Marketing Momentum For Your Small Business

The success of your business depends on your ability to... Read More

The Advisory Board: A Business Owners Most Valuable Resource

As a company grows, the owner's role begins to change.... Read More

Mini-Blind Cleaning Business, Case Study

Sometimes the simple businesses are the ones, which make good... Read More

Pressure Washing Business and Post Fire Cleanups

Many have not experienced a fire up close. One year... Read More

Increase Sales in Your Home Business With These 10 Simple Ideas

Every home business has the same problem of how to... Read More

Your Small Business Suggestion Box

A suggestion box is a really good idea for your... Read More

Small Businesses With Work Trucks; A Warning

If you are a non-operator owner of many work trucks,... Read More

Its Spring - Time For A Compensation Program Tune Up

Now that winter has passed, the annual ritual of spring... Read More