More often than not, the spotlight is firmly on success. And rightly so. Success is hardly likely if the focus is on failure.
Yet alongside data released by the Australian Bureau of Statistics in May of this year – which found the exit rate of small businesses to be approximately 13% in 2011-12, (the entry rate was slightly higher at 13.5%) – failure must be a consideration.
Anna Pino from the Lighthouse Business Innovation Centre, believes more needs to be done to teach resilience and break the stigma associated with failure in entrepreneurship.
“For anyone, not just entrepreneurs, failure is painful,” Pino said. “However, most of the businesses that have gone on to achieve major success will describe a journey filled with false starts, mistakes and lessons learned.”
Pino added that the difference between those that are able to pick themselves back up often comes down to attitude.
While you can’t control everything that happens in business, you can control your attitude and be open to learning from your mistakes.
Pino said that in cases of receiving less than favourable feedback about your startup idea, or your pitch session goes south, or your funding application is denied, there are some key strategies to keep in mind:
1. Understand why business ideas fail:
There’s no doubt that launching a new business requires putting a lot on the line. Your money, your time, your reputation – even your relationships. For all of these reasons, you owe it to yourself to give your business the best chance of success.
Information on business models is plentiful to say the least. Whether it is in books, online, at business conferences or from expert advisors.
Investing the time upfront to refine your idea and improve areas of weakness can save you a lot of pain down the track. There are also online diagnostic tools that provide tailored feedback on the strengths and weaknesses of your idea. Learn from these and make the necessary changes.
2. Redefine failure and success
Think of mistakes as lessons and just like in school, you get to repeat a lesson until it’s learned. Sometimes you need a painful wake-up call to learn the lesson, but you’ll know you’ve learned it when your actions change and you see new and promising results in your business.
3. Don’t be too quick to declare a failure – keep the bigger picture in mind
One of the biggest challenges facing startups with disruptive ideas is that initially nobody gets them. Be careful not to judge a big idea a failure too quickly, look at initial rejections within the context of the bigger picture.
4. Both success and failure are a journey
The process of business success includes planning, informed decision-making, risk management and identifying opportunities. Equally the process of failure involves ignoring the warning signs, failure to act, poor planning and insufficient risk management.
5. Mistakes are not a permanent stain
When you’re pushing the boundaries nobody gets it right the first time. Henry Ford had two business failures before he started the Ford Motor Company and J.K Rowling’s Harry Potter manuscript was rejected by 12 publishing houses before it was eventually accepted.
Being able to fail quickly and recover from setbacks is an important skill for entrepreneurs. Sometimes the best way to look at your business idea is as a collection of experiments – some will pan out and others won’t.
‘Fail early, fail often, but always fail forward’ – these are the words of author John C. Maxwell and should be the mantra for all startup businesses.