Business can be a tricky game. You feel bliss when you succeed. It feels like you’ve hit hard times when you fail.
It is estimated that one-fifth of small businesses fail in their first year, and nearly half fail in their fifth. These figures differ depending on where you live, but one thing is sure: running a business is not for the faint of heart.
Understanding how to overcome corporate failure rationally is one of the most challenging lessons to learn for many entrepreneurs – neophytes and mavens alike.
No entrepreneur intends to invest in a startup only to see it fail within a year. However, this does not have to be a glass-half-empty scenario. Knowing that success can be obtained through failure can have the opposite effect.
We’ve compiled a list of strategies for overcoming business failure and using it as a springboard to more incredible things.
1. Create a Plan of Action
Because it prepares us for the worst-case scenario, a business contingency plan is an essential component of any entity’s strategic planning. It is analogous to a rainy-day savings account:
Sure, you don’t want to plan for a sickness or a job loss, but life happens, and it’s better to be prepared than to be caught off guard.
This is how contingency planning functions.
Should an unforeseen circumstance or unexpected situation unfold before your very eyes, your organization has a detailed plan of action in place.
Here are some pointers to consider when creating a contingency plan:
- As time passes, fine-tune your contingencies to ensure you can adapt to changing conditions.
- Partner with a reputable IT firm to ensure that your data is secure and retrievable
- .Put in place checks and balances to identify flaws. If you have a large company, assign someone to develop a contingency plan.
- List your credit options, such as a business loan, as a last-resort survival measure.
2. Perform a SWOT Analysis
Every organization, large or small, should perform a SWOT analysis.
The primary goal of this time-honoured technique is to comprehend the intricacies of your business and what factors are considered before taking action. Wait a second. What does SWOT analysis mean?
Strengths: Positive internal characteristics, physical assets, and a competitive advantage over competitors
Weaknesses: Negative internal factors such as staff shortages or underperforming processes.
Opportunities: External factors that may contribute to your company’s success.
Threats: External forces over which you have no control, such as a global pandemic, shut down entire economies.
Because you are attempting to avoid business failure, you must focus on the SWOT analysis’s weaknesses and opportunities.
These two factors are very likely to have contributed to the demise of your business.
3. Take a Forward-Thinking Approach
Begin with a vision before developing your business plan.
Make a list of your goals. Create your business plan with it as a guide. Even if your company has already begun, you can plan.
- What are your objectives for your company?
- What do you want the company to be in the next few months and years?
- Your vision may include the following elements to assist you in making a decision:
- Your company’s mission statement
- The products or services that you will provide
- Your company’s speciality
- Prospecting Techniques
- Strategies for marketing
- You will solve problems.
- Methods for differentiating yourself from your competitors
This is not an exhaustive list. Your vision can be as broad or as narrow as you want it to be.
The important thing is to make it feasible and attainable.
4. Think SMART
How SMART is your business?
This analysis can quickly revitalize your operations by quantifying your company’s goals, allowing your organization to have an articulated plan with all parties.
You may be wondering what SMART stands for by now:
Specific: Your goal is quite simple, my dear Williams.
For all stakeholders, it is straightforward, precise, and unambiguous.
Measurable: Your goal is simple to measure and assess your progress against, allowing you to determine if you are on the right path.
Attainable: Your goal is achievable and realistic.
You set yourself up for failure if it is a pipe dream.
Relevant: Your target is essential and applies to the entire company, not just a few individuals (or none at all).
Time-bound: When do you want to complete your task?
Because the timeline can influence your solutions and options, the answer to that question is critical.
Your practices can be scheduled for six weeks or six months.
5. Control Cash Flow During a Recession
It would help if you counted your pennies during any hiccup. Your company may succumb to the fundamental laws of finance if it does not have consistent cash flow. It won’t be easy to keep your doors open if you do not have money coming in. Until that fateful day, there are several options for obtaining a regular infusion of cash:
- To ensure prompt payment, send out invoices on time.
- Contact clients who have been bucking you for weeks and are in arrears.
- Accept advance deposits.
- Use an account receivable financing service, if available, to add the remaining funds to your bank account.
- To avoid additional expenses, try not to fall behind on your bills.
- Believe in Yourself and Plan for the (Inevitable) Difficulties
- When you are confronted with unexpected personal challenges that cause stress, your mind becomes muddled.
- Your self-esteem may suffer, influencing how you perceive yourself.
- “Doubting yourself will harm your business. Make use of personal issues as a result. Consider them to be life lessons.”
That’s the advice of David Christensen, a legal advisor who has counselled people who are struggling with debt.
6. Develop your resilience to protect yourself.
Recognize that problems are a part of life. Analyze the situation objectively. Instead of ignoring the problem, consult with a trusted friend or family member.
Don’t be too hard on yourself, and keep believing that you can overcome the challenges you’re facing. Circle yourself with the right people who can support you. Don’t give up hope.
7. Invest in social media
Marketing experts frequently state that if you aren’t on social media, you aren’t trying.
It’s a cliche, but it still applies to many businesses that believe social media is overcrowded and wastes time and resources.
This is a mistaken belief because the truth is that you have access to millions of potential customers.
Social media platforms such as Twitter, Facebook, Pinterest, and Instagram are valuable resources that can be used to generate new leads, advance your brand strategy, and scale your digital operations.
8. Employ a Business Advisor
Too many owners are stubborn and refuse to adapt or even accept responsibility, which is one of the causes of a failing business.
We understand. You have poured your heart, sweat, and tears into your business, and you don’t want to be told that much of what you did was incorrect.
Hiring a business advisor can be one of the best investments you will ever make, whether you are just starting or have been an entrepreneur for a few years. Because a business advisor is a successful entrepreneur with a keen understanding of the corporate world and the global market, you can pick their brain about what went wrong, what you can do to move forward, and how you can succeed.
9. Avoid Making Emotional Decisions
One of the causes of business failure is making decisions based on emotions. It may be easier said than done, especially when you are enraged or sad. Taking a few moments to collect yourself and become rational again is critical to overcoming the obstacles and hurdles.
Take a walk, grab a cup of coffee, or take a deep breath – this is the entrepreneurial mindset you must maintain throughout your business cycle’s bear and bull markets.
10. Take Reasonable Risks and Push Yourself Outside of Your Comfort Zone
Taking a prudent business risk is not the same as gambling without regard for the consequences. Consider your options carefully, weigh them, and put them to the test. Assume you want to try a new marketing strategy that costs 20% more than your current campaign.
First, test it out with a small investment in a sample run. If it is a success, invest more money in this new strategy. When your emotions are running high, don’t take any risks. Keep an open mind and discuss your plans with coworkers, friends, or family.
In the end, you’ll have to take calculated risks and venture outside of your comfort zone with your business.
But first, use your wisdom, knowledge, and experience to your advantage.
A failing business does not mean the end of the road.
You will face challenges along the way, but you will also find ways to overcome them. Someone somewhere has gone through what you are going through. Learn from their experiences and apply what you’ve learned to your own story for growth and business success.