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According to folklore, the Phoenix can live for as long as 500 years and when it feels that its death is imminent, it builds a nest/pyre from aromatic woods and then sets itself on fire along with the pyre.
The amazing thing here is that a new Phoenix is regenerated from the ashes of the Phoenix before it.
In the same vein, several businesses have crashed and burnt, some before they made a name for themselves and some after. Statistics have shown that 20% of small businesses fail in their first year, 30% in their second, 50% by their fifth and 70% by their 10th year.
However, statistics never show how many of these failed businesses started back up and gained firm footing. It is quite possible to start your business again after failing and keep it not just in survival mode after a couple of years but in success mode beyond 10years.
Several factors contribute to the failure of a business and some of these are:
Lack of business plan
Starting a business without an effective plan is setting yourself up to fail. An effective business plan should contain a clear description of the business and the targets it aims to reach; it should contain a detailed and unbiased analysis of strengths and weaknesses, competition analysis, financial needs and projected cash flow. Your business should be regularly reviewed to reflect new market trends.
Getting start-up funds and investors can be difficult for business owners and pose a problem going forward as money is needed to run a business especially before it yields a profit turnover. The financial challenge may come when there is an issue with marketing and unable to get new clients or there is a problem with your pricing and profit margin is slim.
This is a common reason for failure. Managing a business and employees is not easy and can cause a business to go belly up if not managed properly. Learn managerial skills or outsource if possible.
Marketing is one thing a business cannot afford to get wrong. Businesses need to get their names and brand out there and you cannot do that without marketing. Also, in this day and age where a lot of opinions matter and people see things differently, your marketing campaign and strategies must not be seen as hateful or demeaning to any faction especially minority groups.
Other factors that cause business failure are:
● Not seeking professional advice before starting a business.
● Poor customer service
● Expecting too much within too little time
● Quitting too soon
● Unavoidable/natural challenges like the Covid-19 pandemic
● Mismanaging resources
● Accruing too much debt
When/if your business fails, the next steps to take should not be to wallow in self-pity and doubt or to decide that you are never going to own a business again. You need to understand that failure is sometimes inevitable and always comes with a learning curve. Like Denis Waitley says
“Failure should be our teacher, not our undertaker. Failure is a delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing”.
The following action steps are what you should do to revive your business after a failure:
1. Analyze the failure
The first step is to go back and sift through the debris of your business. Look for clues and pointers of what went wrong and what the root causes of the failure might be. Look back on the decisions you made and consequences, see if there is a link between them and the failure of the business. Go through your financial statements, records and any other paperwork and see what you did wrong or things that were handled badly. The more answers you find, the better you will be at correcting the mistakes moving forward. You can also get feedback from old staff and previous customers.
2. Settle your finances
Go through your financial statements and records; see how much you might own in debt and how much your assets from the business are. Getting a clear picture guides you in making the right decisions and taking the next steps which help you avoid the act of borrowing money to start up the business again while you are in debt from previous trials. You need to know if you need to get a side job to strengthen your financial situation or if you have enough savings to stay afloat while figuring out how to start again.
3. Reach out to people who can help
You mustn’t be in such a hurry to start again. Talk to people within the same field with more experience that you can learn from; attend workshops and training focused on teaching business management skills. Get for yourself a mentor you can call to ask any questions and who will give you support when and where needed. Make new connections and contacts with people who are interested in helping you, investing in your business and can become potential customers.
Sit down and brainstorm on how to improve on your business idea and plans. Have a detailed business plan with realistic and achievable goals; do thorough research and find out how much you need and how to gain profit, do market research and surveys to get a feel of what to expect. Improve and perfect old ideas and think up new productive ideas. Learn from past mistakes and avoid making the same mistakes. Change your packaging and marketing strategies if you have to put out the best work you have ever done before.
Starting your business from scratch after an initial failure will not be easy, there will be times when self-doubt and fear will creep and you ask yourself if you are doing the right thing.
Whenever these thoughts come up, remind yourself of the Phoenix and how it has to go up in flames only to be born again and like Robert F. Kennedy said:
“Only those who dare to fail greatly can ever achieve greatly”.