A while back I posted an article titled “When is it Time to Call it Quits,” but, just picking a time to close your business is only a small part of the process of calling it quits.
Oh sure, if you had tried to run a small home or Internet business, and it just didn’t work out while it was still young, you could probably simply ignore it and let it die off without any fanfare.
But, if you had a more established business with customers, creditors, employees, investors, and the like, it is a completely different story. This is especially true if you intend to start another business (and if you are truly an entrepreneur—you will).
So, if failure is imminent, here are a few things to help you get through the failure so you can move on to your next new venture:
- Use Your Outside Counselors.In the article mentioned above we discussed the importance of using outside counselors when trying to decide whether of not to shut down your business… it is just as important to continue using them for advice and feedback when you are going through the process of closing.
- Share everything.Everyone involved with your business needs to know exactly what is going on, including employees, investors, lenders, your advisors, and, especially, your family. It would be devastating for your spouse to have a process server knock on the door and serve papers to them saying you were losing your house. Don’t hold anything back just waiting for the “surprises” to happen.
- Have an orderly shutdown.If you decide to shut down your business, try to make it as orderly as possible… don’t just live day-to-day while circumstances close your business for you. Make a list of all the things you need to do to shut down your business; from coordinating with your landlord and utility companies, to having a parking lot sale. Schedule your closing events and approach them like any other project you do.
- Never, Never say: “I failed.”Failure is an event, not a person. Your business failed—you did not fail. This is never an easy concept to grasp—our business is personal to us, but it is important to separate business from emotions, especially when shutting down your business.
- Start the next one.Any true entrepreneur will be preparing to start their next business while they are closing down the old one. To put this into perspective, think of this: “Most great people have attained their greatest success just one step beyond their greatest failure.”
— Napolean Hill
Failure is not a popular subject in the business world… it is often dismissed as “insignificant” in the overall scope of things. Unfortunately, it is all too real, and most of us will be faced with failure in some form, whether it is in product development, services performed, or an entire business.
It is important to understand, that having a business fail is part of the entrepreneurial life. In fact, it is an important aspect of entrepreneurship.
Here is what Thomas J. Watson Sr. had to say about business failures: “If you want to increase your success rate, double your failure rate.” The point Watson was making here is that you must constantly be putting forth a concerted effort at entrepreneurship.
The important thing to remember is that failure is not fatal. More important, I believe the following sums up what is truly important in our lives when facing a failed business:
“I really don’t think life is about the I-could-have-beens. Life is only about the I-tried-to-do. I don’t mind the failure, but I can’t imagine that I’d forgive myself if I didn’t try.” —Nikki Giovanni (Grammy-nominated American Poet and Author)
Note: For a more in-depth presentation and checklist on the process of closing a business, read my online report on Closing a Business.