When a business owner has taken all the financial investment advice he can and has implemented a strong financial plan into his venture, it can be devastating to experience failure after months, years or even a lifetime of preparation. But if an entrepreneur can holster the negative energy associated with losing a business, experts say the experience can have ultimately rewarding effects.
Successful business owners hurt, then heal
Mike McGlade recently shared his experience of losing a business in the Harvard Business Review. The now-startup expert was nothing close to where he should have been when he started Zoosa, a business focused on social good but not much else, according to his editorial. McGlade said his lack of understanding and experience in the startup scene was detrimental to his position as a young entrepreneur. Once the hopeful business owner realized this – two years down the road, he said – he was finally able to see the necessary steps toward success.
The Guardian reported that discussing failed business experiences, especially in the case of social responsibility-centered enterprises like McGlade’s Zoosa, is imperative within the industry.
One business owner in this field, Dave Dawes, said that others’ hesitation to talk on the record about failed ventures is a major handicap of social business as a whole.
“It’s hard to learn from success, – it’s easier to learn from failure, he said. “Really successful social entrepreneurs fail multiple times. But one of my bugbears is that these discussions only happen in the bars at conferences, not on stage.”
Making the switch to positive thinking
Samuel Bacharach, the director of Cornell University’s Institute of Workplace Studies, points out five personality and operational changes that can occur in the midst of running a new business in Inc Magazine, and one of these – a sentiment reflected by Dawes and McGlade – is the overpowering of ego.
Looking at a future business from a realistic perspective is key, McGlade says. He believes that too many people simply want to run a business rather than discover a passion and build from that. Business owners, he says, fail too often because their focus does not come from the heart. This is the product of ego, the entrepreneur insists, that kills off most new businesses.
Other problems an entrepreneur will run into, often at the start of his or her work, have to do with how the business owner interacts with employees, volunteers and co-founders. One way he or she can avoid issues stemming from teamwork is by being aware of and nurturing the creativity of the people with whom he or she works.
The remaining ways in which business owners fail, Bacharach says, are by developing tunnel vision in their work, neglecting the needs for additional management or executive roles within their organization and by refusing to sway when changes are in the best interest of the company. Essentially, the expert claims, entrepreneurs drive their businesses into the ground when their ability to see past personal intentions is lost.
According to one professional who contributed to a Live Q&A hosted by The Guardian, investors working in the United States are typically attracted to small businesses whose CEOs have tanked a business in the past. The learning experience, the source claims, adds to a funding candidate’s positive traits rather than taking away from his or her value as an entrepreneur, which is even more reason for successful business owners with rocky pasts to take Dawes’ advice and speak out about their struggles. Doing so could push hopeful business owners to overcome their pain of losing a previous enterprise and create innovative, fresh organizations.