Some of the most successful businesses in the world only came to
be after a few serious failures. From prototypes that don't
work to a service that doesn't sell in your local area, a first
business can quickly turn into a first failure. But can you as an
entrepreneur come back into the fray and start
again-successfully?
Absolutely, says Raymond T. Yeh, co-author with Stephanie H. Yeh
of The Art of Business: In the Footsteps of
Giants. In the book, the authors cite the histories of such
companies as AOL and Intel, noting how many times failure entered
the picture and how the entrepreneurs battled back. "Business
failure is part of the process," says Raymond. The brightest
minds allow themselves to make mistakes, learn from them, dust
themselves off, and start again.
After surviving a business failure, the first thing to do is
step back and take stock. "Make a list of what you did right
and what you did wrong," says Raymond. "If you see the
whole picture, and you're small in it, that gives you a good
perspective." No matter how busy you may be, definitely set
aside some time for reflection. Ask yourself objective questions,
and be honest with your answers.
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Reflection helped Lunden De'Leon regroup after her PR
business failed in November 1999. She'd started in January of
that year, signing a few entertainment-industry clients. But when
her actor clients started to make it big, they signed with bigger
PR firms, and De'Leon was forced to close her doors after the
mass exodus. "I felt like a complete failure," says
De'Leon, 30.
She took time to go back to school and became interested in the
music business. "I thought about starting my own record label,
and then fear kicked in," recalls De'Leon. "I
thought, 'There's no way I can go through the pain and
embarrassment again if this company fails.' I struggled with
the idea, but with my family's encouragement, I decided to give
it a try." Learning from her first venture, De'Leon's
new strategy for Dirrty Records is to sign exclusive contracts with her
clients and to elicit the help of her family in making important
decisions for her Beverly Hills, California, business. This
strategy has helped her grow her 2002 startup to $3.5 million in
annual sales today.
Getting past that "once bitten, twice shy" mentality
is a big challenge for second-time entrepreneurs. Mark C. Judd, 41,
founder of BIDCO Marine Group, an underwater construction,
maintenance and inspection service in Buffalo, New York, certainly
had to overcome his earlier negative business experiences.
During the startup of his two previous diving companies, Judd
encountered problems with his partners, which led to his departure
from both companies. After those ventures failed, in 1991 and 1992,
respectively, he started again in 1993-this time with a sense of
caution regarding business relationships. Now, Judd has built his
business to about $15.6 million in 2003 sales.
Success after business failure proves that entrepreneurs are
more than just resourceful-they're made of some hardy
stock.
Look Inside
If your business has failed and you want to start anew,
Stephanie H. Yeh, co-author with Raymond T. Yeh of The Art of
Business: In the Footsteps of Giants, suggests asking these
questions about your first business venture:
- Did I put the customer at the center of my universe? Says Yeh,
"Entrepreneurs can get fascinated with whatever hot idea [they
have], and they don't see the customer."
- Was I passionate about this business? Why did I want to do
this? Was it just for money?
- Did I target a niche? In a competitive space, did I make my
company offering different? Was I better, cheaper, faster than the
competition?
Honestly examining these issues can help you prepare for a new
business.