The 6-Step Process for Rebounding After a Business Failure
A Note From The Editor
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Failure sucks. There’s no way around it. It is painful, uncomfortable and humiliating. I’ve been there. I failed. I got stuck. But then I learned to get unstuck.
I see many other entrepreneurs in the same position as I was, with my first .com company a total bust. I spent two years and thousands of dollars trying to get it off the ground.
Eventually, I had to swallow my pride and admit that the business was over. It had failed. By that point, I was discouraged, broke, tired and 100 percent confident that I couldn’t make money online.
Yet those two years of being scrappy weren’t a complete waste. I learned a few things. I took those lessons, imported them into my next venture and experienced some success. And then I experienced more failure. And then more success. Some more failure. A little more success.
I’ve started around ten internet businesses, but you’ve only heard of a few of them. Why? Because all the others died. They failed. My point is this: Failure happens. And when it does, you need to have a plan for coming back around. After more failing than I care to admit, I developed a rough framework for handling it. Here it is:
1. Accept any failure as part of the path toward future business success.
Honestly, I had trouble with the very first step in the process.
My first failed startup took two years to die. It should have taken two weeks. The mantra “fail fast” wasn’t part of my vocabulary at the time. As a result, I denied defeat and kept the nightmare alive for way too long.
The first step in any recovery program is to admit and “embrace failure,” as Jeremy Boom powerfully explains in his must-read article. This probably sounds defeatist or discouraging, but there’s a reason why I place it as my number one recovery tactic: If you don’t view your failure as a path to success, you’ll never get over it. Instead, you might make the same mistake that I did -- pour thousands of dollars into a company that’s already dead.
You have to accept what has happened. You won’t enjoy it, but you have to accept it and realize that there is nothing you can do to change the mistakes that were made in the past.
The cloud has a silver lining, though. You have one failure behind you. That means you’re one failure closer to success.
2. Feel the pain of failure, but avoid staying in emotional limbo.
While this may sound counterintuitive, there are few things that are more damaging to a successful rebound than pushing all of your emotions down and pretending that you are okay. You need to give yourself adequate time to grieve your loss.
I realize that we're talking business recovery here. But emotions are a real thing, and they do get mixed up in business. And that’s okay.
Once the failure is final, give yourself the time you need to be upset, sad or angry. That could take three months. It could take 30 minutes. Take whatever time you need.
You should avoid staying at this emotional nadir, however. There is benefit in negative emotion. The benefit is to give yourself the inspiration to pick up, move on and build again.
3. Accept full responsibility for the failure.
Now that you have accepted what happened and given yourself time to grieve, it is time to own the failure of the business.
This is going to sound harsh, but you need to hear it. The person responsible for the failure is you. Not your business partner, not your employees, not your investors. You.
Why is this important? You have to be willing to own this truth before you can ever truly move on and rebound from your failure. Doing so improves your capacity as a leader, enhances your level of responsibility and increases your endurance when times get tough again (which they will).
There is another reason why accepting full responsibility is important. When you do, you give yourself permission to learn from the experience. To staunchly deny your culpability is to refuse to learn from the experience.
When you take 100 percent responsibility for the failure, you can also take action to start your recovery.
4. Create a list of the things that went wrong.
Write a list of all the things that went wrong. Feelings. Conversations. Spending problems. Hiring problems. Team conflict. Marketing mistakes. Everything.
Maybe you got into business with the wrong partner. Perhaps you weren’t careful enough with the legal work. Maybe you did not invest enough time into mastering your marketing skills.
I made all those mistakes. And more. I recognize them as problems now, because I took the time to reflect on the death of the business, create a list of the mistakes and chart a path toward success.
Creating a list of your business “oops” is a serious exercise in humility. There’s nothing personally validating about seeing where you went wrong.
5. Outline an action plan for building a new business.
The fifth and final step to rebounding from your failure and getting back on path to success is to distill everything you have learned from this failure into a simple and actionable plan.
It’s easy, on the one hand, because you know what went wrong and what to do instead. There’s a reason we went through four steps to get to this point. It’s hard, however, because creating a detailed plan is some serious brain work and takes considerable time.
You have a powerful force working to your advantage: You know what lands a business in hot water. And you know how to avoid it. Take your knowledge and use it in your next business.
So, what’s next? Plain and simple, start your next business.
There’s nothing like the taste of failure to light you up and make you hustle. You want to get as far beyond failure as possible. The only way to do that is through the passionate, relentless, energetic and all-consuming hustle.
Once you are back out on the court making shots and scoring goals, you will smile at your previous failures, and be grateful for the lessons that they taught you.
A little older. A little wiser. And a little closer to success.
Steve Jobs, Bill Gates, J.K. Rowling: All of these people failed. But all of them were able to come back stronger than before.
And you will, too. Keep your head up and keep moving forward. Failure’s lessons are harsh, but invaluable. You’re going to rebound. You’ve got this.