Is Failure Really a Good Thing?

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When this represents the status of your business, you may want to revisit how well prepared you were to start your business in the first place.

I watched an interview with Richard Branson a short time ago, where he encouraged aspiring entrepreneurs to “screw it—just do it.”

Well, every year over 6 Million would-be entrepreneurs seem to follow Branson’s advice to “screw it—just do it,” … and….

Most of them quickly fail!

Any who follow my annual Business Survival report (the 2016 edition will be available around June/July) will know that only a small percentage of the 6 Million new full-time startups ever survive long enough to file a tax return.

I’m wondering just how many of the founders of these “disappearing” startups had the “screw it—just do it” mentality when they started their business.

Business gurus and pundits generally expound on a number of reasons why these businesses “disappear,” such as:

  1. They were never “real” businesses in the first place—just some individual starting a “hobby” business. (Although this is usually the most popular reason promoted, it flies in the face of the data’s definition of a full-time business.)
  1. Maybe, since they weren’t “real” businesses, they simply didn’t bother filing a tax return.
  1. If a business was successful, it might have been acquired by a larger company and their taxes included in a consolidated return rather than an individual return.
  1. Most startups are undercapitalized and can’t hang on long enough to gain traction.
  1. Some of these businesses were simply not a good idea, and there was no market for their product or service.
  1. Where the businesses depended on walk-in traffic, they may have picked poor locations.
  1. The founder(s) of these disappearing businesses may not have known enough about business, and were unprepared to ride the Entrepreneurial Lion (recommended reading for aspiring entrepreneurs).

These are the main reasons currently being passed around the business community as to why businesses disappear—fail—today.

It is my opinion that all of the reasons given above, with the possible exception of no. 3, are the result of people starting a business before they are properly prepared—they had the “screw it—just do it” mentality.

Don’t get me wrong; I have always been a strong proponent of picking yourself up, dusting yourself off, and starting all over again if your business failed. After all, the only real failure in life is to never try.

Business failures are obviously great learning experiences. How many times have we heard, or read, Thomas Watson Sr‘s admonition that if we wanted to have more successes we should have more failures?

Yes, failures are good (but expensive) teachers. But, here is something to think about:

Business failures are good teachers, but wouldn’t it be better if aspiring entrepreneurs properly prepared before starting a business so they could have it be successful from the start?

You can’t “know it all” before you start your business (actually you never will—there is always something new to learn). And there does come a time when you do have to actually “start it.”

Obviously, you don’t want to spend “forever” planning and preparing to start your business. Set a target start date and then cram as much new knowledge and preparation into the intervening time as you can.

The better prepared you are, the better your chances of succeeding.

So, what do you think—are Branson’s “screw it—just do it,” and Watson’s admonition to “…have more failures” the things we should be impressing upon new wannabe entrepreneurs?

Or, should we be encouraging new aspiring business owners to learn business basics before they try starting a business?

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3 thoughts on “Is Failure Really a Good Thing?

  1. The “screw it, just do it” remark misrepresents the attitude towards risk. If we want to succeed, then we will have to take risk. We will have to step out there and see what happens. However, just as it would be foolish to get in a car and drive with no training whatsoever because you watched someone else do it, it is foolish to jump into business and “just do it” with out adequate preparation and skill. Risk brings reward, but taking risk without knowledge and understanding usually leads to disaster.

    1. Thanks for your comment Josh. You’re absolutely correct; every business founder is a risk-taker—that’s what leads to rewards. But it is foolhardy to take those risks without knowledge and preparation. I periodically receive emails from entrepreneurs who are struggling, and in almost every case it is because they are not knowledgeable about the basic fundamentals of running a business. So, my question is: why do so many people try to start a business without properly preparing—would they try skydiving without a parachute?

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