Acceptance Is the First and Bravest Step In Dealing With Business Failure
It's not a death sentence to admit defeat. Just concede that one and move on.
Opinions expressed by Entrepreneur contributors are their own.
Often businesses fail. If you're a CEO you must accept the fact that at some point you may need to shut your company down, let your employees go and accept defeat. We have all heard the statistics that show that about half the companies won't make it passed the five-year mark. For start-ups the percentage is much higher.
Related: 7 Reasons Your First Business Will Fail
I started my first company after college and, like most young ambitious men, I was very optimistic and had my head filled with dreams of quick wealth and prosperity. When things started to turn sour, I panicked, refused the admit failure or see the reality. It was tough, then it was over.
I found myself unemployed, with a mild depression and very low self-esteem. For almost two years I was afraid to take any type of leadership position. I felt, I couldn't do it. If I look back to it now, years later, I see all the things I did wrong.
Be prepared to fail.
Statistically speaking, when you start your first business, you've already failed. If you look at a potential failure as a opportunity, it will be easier when it happens. I think my personal biggest mistake when running my first business was the belief that I would be successful. It never occurred to me that my first big adventure could fail. If I sound very pompous and naïve, bear in mind: I was very young.
Related: 8 Reasons Failure Makes You a Better Entrepreneur
As an entrepreneur and a leader, you are responsible for every aspect of a business. That includes both success and failure. While being the one who has to tell business partners and employees that under your leadership you're going out of business is scary, you'll feel a lot better when it's done. If you, like me, try to run away from this responsibility, it will take you a long time to recover.
Personally, I tried to dodge some people when I ran out of money. And dodging people is stressful. I am still not comfortable with looking some people in the eye and I think that had I had a 5-minute conversation with them then, I would have had a lot fewer sleepless nights both then and now.
Related: 5 Steps for Recovering After Pulling an All-Nighter
Being responsible for something is not the same thing as being accountable. As a leader, you must understand that. Jack Zenger writes that "Being accountable means you are answerable and willing to accept the outcomes or results of a project or activity.
But responsibility goes much further. It is the mindset that says, "I am the person who must make this happen," whether it stems from your belief or because your job requires this of you, or there is some social force binding you to this obligation."
I learned accountability when, working as a communication specialist, I started using Weekdone for weekly reporting. With "Plans, Progress, Problem" based methodology that I'm following now.
I set my plans for the coming week and am accountable for getting them done. And as I've learned to accept that not all things go according to a plan, I can always take responsibility for the things I haven't achieved.
It's not about you and it's not personal.
The fact that you don't know how to solve some specific issue or figure out how to turn a profit on some idea, doesn't mean that you as a person are a failure. You may have made some bad calls but you didn't know that when you made them.
Learn your lessons and move on.
If your company can't turn a profit and keeps losing money for a longer period of time, there's no point in holding on to it. If you have already tried plans A – E and you're out of ideas, it's time to close down the business. The longer the dying progress takes, the more painful it is. I am not saying to give up easily, but to evaluate and understand when you've exhausted all the good options.
Failure is a roadblock, not the end.
When it comes to accepting responsibilities, you must "understand one thing – you're not the first person (nor will you be the last) who has fallen short in the personal behavior department from time to time." Stand up. Start again. Minimize the risk of doing bad decisions in the future by setting more achievable goals and remembering: your next team will be stronger. Because you'll be stronger and wiser.
"Try again, fail again. Fail better."