Brace for Impact: How to Recover from Small Business Failure

The next time you face significant business challenges keep these things in mind.

“We couldn’t have anticipated this … brilliant startup founder leaves (Widgets Inc.) to …”

It sounds interesting. Yet, the story behind “the story” is often not: things get tough, founder jumps ship.

(Groundbreaking) … and not so glamorous.

Inevitably you’ll face tough challenges in business. And while it’s always easier to retreat, abandon ship or simply sink — the path less traveled is full of possibility. Therefore, I would be remiss if I didn’t share the one most important and overlooked fact about entrepreneurship — every successful entrepreneur has experienced “startup system failure.” It’s comparable to experiencing a Sad Mac moment or witnessing complete computer failure — your system freezes, reboots, or stop functioning altogether. For a moment, time and space ceases to exist …!

It is a position in business where either, life happens or business doesn’t quite go as we had planned. Challenges invariably present themselves in many forms – direct or indirect.

Unfortunately, when some entrepreneurs hit troubled waters they choose to abort or sink their ship altogether. Fortunately, you’re reading this cautionary tale and are now equipped to embrace your God-given ability to brace for impact, pivot and move forward more intelligently.

 

What Happened?

When you look back at challenges you’ve faced in business have you considered the proximate cause? Whether you acknowledge it or not, every entrepreneur has severe deficiencies and business blind spots. To mitigate these areas, troubleshoot frequently and:

 

  • Rid your business of deficiencies. Be honest with yourself. Write down your weaknesses and then hold a brainstorming session where “only solutions are allowed.”
  • Obtain third-party, qualified perspective. Business blind spots aren’t so easily located. Tell your ego to take a coffee break, put your big girl (or boy) pants on and seek wise counsel.
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Taking a closer look at your business deficiencies and blind spots will ultimately reveal underlying issues … wrinkles in the plan that no amount of Botox can fix. But once you’ve uncovered the “root issues” affecting your business you can fix them.

For example, a “root issue” that plagues many small businesses is poor execution and systems. A larger problem that results – inability to scale when you hit pay day with a new customer, growing too fast and bringing on the wrong hires, etc. The aftermath always delivers a crushing blow.

 

What Should I Do Next?

Before you abandon your ship and crew at the next sign of a major challenge or drawback, here are 5 things you should consider:

 

1. Stand your ground.

Generally when things go wrong, most people will follow their first instinct and flee. There’s always an exception to the rule – but more often than not, fleeing the scene is the wrong answer in business. For all intensive purposes, like the captain of a ship, you are the last man (or woman) to leave the vessel (business). Ride out the storm.

 

2. Channel your inner mogul.

Remember when you made that heartfelt, passionate speech when you launched your company.

Well, now is the time to channel your inner Godfather and use all reasonable (and legal) efforts to save everything (ship, cargo and crew). A lack of self-confidence will cripple your company. You’re not only responsible for yourself; others are depending on you. Repeat after me: “No reserves, no retreat, no regrets!”

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3. Put your team first.

Imagine that you’re the captain of a ship. As a leader, you are responsible for the return of the crew. The same goes for business. Your co-founders, team and grandma are counting on you to keep their best interests in mind. If you’re not ready for that type of responsibility there’s always an opening for second mate … somewhere.

 

4. Communicate early and often.

Don’t stand there so surprised … you didn’t get hit with a “shock and awe” assault. It’s time to take measures and precautions. Communicate promptly with internal and external stakeholders. The silent treatment negates confidence. Instead, identify the problem, ask for trusted advice and share your solutions.

 

How to Predict an Unpredictable Future

Given the inherent nature of entrepreneurship (it’s risky) don’t be completely shocked when you find yourself in dangerously unpredictable waters. Instead, think about these four things to ensure you’re well-equipped to navigate storms.

  1. What low probability, high-consequence scenarios can be associated with the way I currently run my business?
  2. What have I done to mitigate those risks?
  3. How can I maintain a company culture of awareness in the wake of our past success?
  4. Am I observing early indicators of problems within my business?

And remember … “Smooth seas do not make skillful sailors.”

 

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