How to Deal with Business Failure

More than 50 percent of start-up businesses fail within the first five years, according to statistics from Entrepreneur Weekly, with many folding in the first year of operation. Losing a business is devastating, and moving forward after a business failure can seem impossible. However, dealing with failure and moving forward in a positive motion is the key to maintaining both your financial and your mental health.

Step Away
The failure of a business can distort your views of the situation. Emotions can cloud the mind and make recovery more difficult. After you’ve laid to rest any loose ends on your old business, take some time away. Go on vacation, even if it’s just a short day trip to take your mind off of business matters. Losing a business can take a severe emotional toll on some people. If you experience feelings of depression or anxiety, consider talking to a professional to take care of yourself first before moving forward. Take stock of what else you have in your life – family, health, hobbies, a home, etc. to remind yourself of what’s important.

Analyze the Situation
Once your mind is clear, analyze any information that can pinpoint why your business business may have failed. Look through financial statements, bank records, customer communications, employee lists, marketing plans and anything else that may have contributed. Make a detailed list of each potential mistake. On the other side, take this time to document the business decisions that helped or propelled your business forward, despite the eventual failure. This will come in handy when starting a new business or if you choose to work for someone else.

Realize Your Faults
You can’t be afraid to take personal responsibility for any personal decisions or faults that caused your business to fail. While it may not have been completely your fault, in most cases, some part of the failure will be traced back to you. Be honest with yourself. When your realize what parts you’re to blame for, you can go back and figure out ways to fix those faults, rather than repeat them in a new business venture. Ask others who were involved for an honest critique, you might be surprised what they say.

Education
Take your list of personal faults from the business closure and fix them through educating yourself. This can include more formal education options like community college classes, or even a degree program. It can also be as simple as picking up a few do it yourself books and working on your own. Friends and mentors with experience in the areas you lack also provide a substantial resource to learn or improve your business skills.

Try Again
Once you’ve cleared your mind, made a plan, and fixed or added any personal skills to your tool belt, it’s time to try again. Start from scratch, preferably with an idea or industry that you love. Don’t feel you have to continue in the same industry that your first business failed in, unless that is where your skills and interests are most suited. Make a business plan and work with other professionals to build the business correctly from the beginning. Save your sheet of the good and the bad from your first business and periodically revisit it. Reviewing this list will allow you to see if you’re making similar mistakes from the past, or will just remind you how far you’ve come.

Even some of the most successful business men and women have had ventures that have failed. What made the difference involved learning from their mistakes and moving forward. You too can get back in the game by making a plan, learning from your mistakes, and striving for success in your next venture.