What to Do When It All Goes Wrong: How Small Businesses Owners can Make the Most of a Bad Situation
Be it launching a new product, opening a new location, or just plain starting a new business, there’s always the chance that your venture will fail. You know this, you take steps to prevent it from happening, but even the best laid plans are no guarantee of success. Maybe you miss the sales goal you set for yourself, maybe you end up overwhelmed with negative publicity, or maybe the entire market takes a dive.
I’m sorry to say it, but, well…it happens.
Only about three out of ten businesses survive their first ten years, and they were among the five out of ten that were lucky enough to make it five years, who in turn were among the eight out of ten that managed to last even a single year. From major forces like changing trends, evolving technology, and economic cycles, to minor components like store location, employee turnover, and customer service, there are an overwhelming number of variables that can affect the odds of your business’s success.
Sometimes the suffering is sudden, perhaps you had a particularly bad quarter due to a mismanaged marketing plan that resulted in a flood of consumer backlash. Sometimes the end seems like it’s slowly but surely getting closer, like when expenses keep piling up while your stream of revenue fails to grow in kind. The shock of instantaneous failure is especially painful, though the dread of trying and failing to make ends meet as a looming deadline approaches can be absolutely nerve-wracking. Whether your company is struggling to stay afloat, gasping its last breath, or totally sunk, it can feel as though the entire world is ending. You invested so much time and money into this endeavor, you spent all that time planning and preparing for things to go well, you may have even had ideas for expansions in the near future, but now it’s all gone.
Or is it?
No matter the fate of your company itself, you are still capable of learning and growing from this experience. Any good entrepreneur knows better than to let a little misfortune hold them back, they should be ready and willing to assess the situation and make the most of whatever resources are available, even if the only resource is a painful lesson on what to avoid next time.
If your company can still be saved, but must endure some downsizing in order to go on, then the first thing you’ll need to do is keep your clients and coworkers informed. By utilizing newsletters sent to your mailing list and company emails distributed to your staff, see to it that all parties receive the information most pertinent to them first and additional updates after, but do not hide details or keep secrets. Give specifics where necessary, but keep their attention on the big picture all the same. No employee likes layoffs or wage freezes, but they’d rather know what’s coming than be caught off guard. Likewise, customers never enjoy being told products or services they enjoyed will no longer be offered, but making them aware ahead of time instead of leaving them to figure it out on their own will help preserve your reputation.
In addition to keeping people up to date, be sure you open respective channels for employees and customers to voice their complaints and receive additional information. Don’t be ashamed to admit when you don’t have an answer, and above all else, do not make promises you can’t keep. Acknowledge their frustrations and concerns during this period, hold yourself accountable for what you’re doing, and assume responsibility for what will result. Leaving people in the dark will only garner low morale and increased resentment, which could lead to negative reviews on Yelp and Glassdoor, making recovery from difficult circumstances even harder than it already is.
On the other hand, if the company is unable to recover from the dire straits and ends up shutting down, then the most important thing to address will be yourself. After the paperwork is filed and the doors are closed, take some time to reflect on what happened and how it’s effecting you. Accept that failure was always an option, forgive yourself for what happened, but hold yourself accountable to prevent it from happening again. If you have the financial security to allow it, take a vacation to destress and unwind, that way you’ll be able to start anew with your body and mind restored.
Once your head is on straight, take a look back at all your business endured, then analyze just what caused your business to fail. Review the procedures and strategies you employed while it was still running, identify what was working, what wasn’t working, and why. Was your budget lacking in certain areas, would you be able to secure more funding next time? Were there plans you were hoping to start but could not initiate due to the failure, has your recent experience given you a new perspective on those plans that you didn’t have before? Take your failed business plan and revise it with the updated information you’ve received, then begin making preparations to start over. It may take months, it may even take years, but you can still try again when the time is right.
Mind you, you may have to secure yourself a more traditional form of employment in order to build up funds or pay off debts. Working for someone else may seem like a step back after trying to be your own boss, but the experience may aid you in revising your business plan, and who knows, you might even build contacts with potential new business partners while you’re at it.
Depending on the nature of how your business failed, you may also want to focus on tending to your professional reputation before you move too far forward with any new plans. If you were close to your competitors or a recognized name in your local community, then the closing of your company could inspire support and even new job opportunities. That being said, if you didn’t cultivate strong ties within your industry or ended up making enemies amongst your peers, then you may find yourself being blacklisted instead. It can be very difficult to regain people’s trust, and in some cases you might never be able to restore what you’ve lost, but if you take the time to show that you’ve learned from your mistakes and are willing to improve, then employees and clients alike just might be willing to return.
You may not know this, but Walt Disney, Henry Ford, and Milton Hershey all experienced failure with their initial business ventures. However, learning from their mistakes and applying their newfound knowledge allowed them to become titans of their respective industries. We’ve all seen a Disney movie at least once in our lives, just as we’ve all watched a ford vehicle drive by and enjoyed a Hershey candy at one point or another, all thanks to the perseverance of their creators. Their companies didn’t become household names overnight, but they wouldn’t have become known at all if they’d given up when things didn’t work out their way, and neither will you.
I know it hurts, I understand you’re worried, but you need to realize that your journey is not yet over. Pick yourself up, dust yourself off, and get yourself some rest. You can always try again when you’re ready.