The 4 Most Common Business Setbacks and How to Recover Many entrepreneurs will face at least one of these over the course of their career.
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Setbacks are bound to happen at one time or another, rendering our businesses vulnerable. While they can be challenging and disorienting, they also present a powerful opportunity to bounce back, with newfound perspective and wisdom.
Some of these setbacks are so common in an entrepreneur's journey that they may as well be archetypes, but knowing how to handle them can prevent any sense of devastation. Resiliency is a key component of entrepreneurship, and how we show up to these setbacks shows a lot about our moxie as founders. Here are four of the most common setbacks and how to bounce back from them.
Common Setback #1: Loss of Reputation
A loss of reputation can happen for a number of reasons: bad reviews, accusations from a competitor or a public expose about you and your company, such as we recently saw with Away's co-founder Steph Korey after an article in The Verge came out detailing problems within the company culture. Depending on the severity, a loss of reputation may feel like the end of the world, but there are ways to repair your reputation with time. Hire an SEO agency to help with the first page of the Google Search results tied to your name or your company's name, and then be patient. When in the midst of a reputation storm, one day can seem like virtually forever, but any good publicist would tell you that time can heal plenty.
Instead, move your focus to how you can improve. Own up to a mistake that you've made, then seek to fix it. Think about how you can reposition your stance on certain issues or introduce new improvements to your service or product. That will certainly show the world that you can handle resiliency.
Common Setback #2: A Challenge in Our Personal Lives
Few things impact our businesses more than a traumatic loss or event in our personal lives. Grief can take a powerful hold on us, making it hard to focus or be in the right mind space to get anything done. Some companies offer bereavement leave periods, and in that vein, it's important to try to take time off from running your company in the initial weeks after a devastating loss. See if you can hand off the reins to someone else on your team.
Thomas Coffman, founder and CEO of Miracle Real Estate Partners, lost both his sister and his best friend. He says what's worked for him in persevering against adversity after a time of loss and devastation is to find faith and purpose in something bigger and find a connection to that through the work you do. "You have to believe that if you keep on building that company or that dream, it's going to matter," he shares. "Faith is everything in perseverance: it starts with that internal belief."
Common Setback #3: Loss of a Major Client
Many businesses have a few major customers or clients who are on the highest package and contribute to the lion share of monthly revenue. So, when one of these big clients decides to go elsewhere or doesn't need your services anymore, it can feel devastating on the financial front. Thank the client for their time with your company with grace, and then rev up marketing and sales efforts again.
It's important to seek information on why you lost the client. Ask to have an honest conversation about what you could've done differently to make them more satisfied with your work, so you can apply the changes for your next client. If it wasn't about your offerings but rather changes within their own company or needs, ask for testimonials that you can display on your website or use in sales moving forward.
Common Setback #4: Challenges With Team Dynamics
Depending on the setup of your team, you may have co-founders or a group of hires. Many times, issues with team dynamics or conflicts begin to arise. Startups are high-stress environments, and combining many personalities can often lead to flare-ups in a team dynamic — so much so that the esteemed entrepreneurship book The Founder's Dilemmas shares research that 65 percent of startups fail because of interpersonal tensions within the founding team.
While the reasons for the tensions can vary, a common spark for these flare-ups is typical because something is going on beneath the surface. Psychotherapist Esther Perel shared with First Round that when she's helping co-founders work through a pressing issue, a common question she asks is, "What's the hidden issue?" She notes that she "often sees three categories of hidden issues: power and control, care and closeness and respect and recognition." Once one of these is unearthed, discussed and resolved, the tensions may reside and leave your team stronger than it was initially.
These four setbacks are each tremendously difficult to go through, but the chance to prove your resiliency and find a solution or renewed faith through the challenges will serve you in the long run.