[This article was written by Dawn Castell.]
Startups have the odds stacked against them. With 50% of businesses failing in their first year, all entrepreneurs have to overcome great challenges to create a business that will turn a profit. One of the best ways for founders to set their businesses up for success is to learn from the mistakes of startups that have come before them. Read on for a few lessons to learn from failed startups.
1. Choose the Right Mentors
Once you choose to start your business, you’ll find that almost everyone has some sort of advice on how to run your business. While it is important to seek out advice where you can, you need to take everything with a grain of salt. Following the wrong sort of advice from someone that doesn’t know what they’re doing is one of the fastest ways to run your business into the ground.
When seeking out advice, try to find people that have the credentials to back up what they say. Lawyers, seasoned business owners, accountants, and the like are all examples of people that can help you make the right decision for your business.
2. Have a Contingency Plan in Place for Failure
Founders should always be prepared for the unexpected. Nothing ever goes precisely as planned, so it’s important to have a plan in place when the worst happens. Failure can happen to anyone—it’s how you handle the failure that ultimately defines the future of your business.
Your contingency plan will help to make sure your business can survive the worst-case scenarios. How will your business handle failure? What systems will be put in place to prevent the same situation from happening again? By answering these questions, you’ll be able to better save your business from impending failure.
3. Don’t Avoid the Hard Conversations
When things don’t always go our way, it can be tempting to ignore the reality of the situation. Instead of avoiding the hard conversations and pretending nothing is wrong, it is important to own up to what’s happening with your business. While things may not change overnight, the first step of fighting failure is to overcome denial.
The sooner you confront your problems, the easier it will be to put your business back on track. By acknowledging and assessing your problems, you can make sure these problems never happen again.
4. Get Rid of Systems That No Longer Serve You
Identifying what isn’t working for your business is only part of the process of overcoming and averting failure. In order to keep pushing your business towards success, you need to actively eliminate any processes or systems that aren’t serving your business. If you want to get your business back on track (or prevent your business from going off track in the first place), you need to monitor your business practices and eliminate the ones that are doing more harm than good.
Businesses don’t start failing suddenly. Usually, a business failure stems from a problem that has festered over time. For example, a business that has a high attrition rate probably ignores the fact that their employees are not happy. By identifying what their former employees feel through an exit interview questions and answers pdf, this business can begin rebuilding their work culture and reduce their turnover rate.
5. Never Be Afraid to Bounce Back
Even though many founders’ greatest fear is failing as a business owner, failure isn’t final. Instead of adopting a defeatist attitude, you must realize that failure is simply another lesson that will help you succeed later on. It may take more than a few failures before you find the success you’ve been dreaming of. The important thing every founder must understand is that they should keep going, even after facing failure.
Life as a business owner comes with its ups and downs. Choose to overcome any failures today by applying these five lessons to your business practices.