Most entrepreneurs, business owners and innovators have faced failure in the course of their lives and careers. At some point, they have found it necessary to muster the courage to accept the inevitable and begin anew.
This is no doubt exceedingly difficult, for these are the most determined among us. However, we must acknowledge that some obstacles cannot be overcome or it is impractical from a financial, political or personal standpoint to overcome them. If you suddenly find yourself in the ring with Mike Tyson, you have to decide whether to fight or flee.
If you are struggling with this possibility in your own endeavors, you must have asked yourself more than once, how will I know when it is time to quit … when should I make the decision?
While there is no single answer, but there are some generic points that can help guide you. The very fact that you are asking these questions is evidence that you are facing some grave problems. If you are experiencing an instinctive fear, it is important to examine its root causes in a factual light and make rational, rather than emotional decisions.
Most of all, remember that some of the greatest successes were born of failure. As Henry Ford once said, “Failure is the opportunity to begin again more intelligently.”
When to Decide
Invariably the first indication of trouble is that you are having difficulty paying your bills. Sounds obvious, I know, but these is where many make the mistake of assuming that business will improve, things will get better and you ignore the reality of the situation and rationalize why you should stay the course.
After successive months of struggle you begin to borrow, which only places you at greater financial risk.
Then you may begin to ignore the bills, letting some of the ones you deem least important to remain unpaid. You may begin to reduce your workforce because payroll is becoming impossible to meet.
Finally you accept the fact that there is no way out short of a lottery win and the decision to close is made for you … not by you.
This is not what you want to happen!
How to Decide
Making the decision requires that you remove any emotional roadblocks standing in the way of clear, analytical thinking. Chief among the various emotions in play is pride. It may help you to read Richard Branson’s story about his decision to sell Virgin Records.
Make a realistic assessment of how things stand. Re-examine everything you have done in the past. Try to identify what factors brought you to this decision point and what you may be able to change to create a favorable outcome.
If an honest and thorough review leaves you satisfied that you have no viable alternative but to wind down your enterprise, then you must make the decision and make it quickly. After all, leadership is defined by being accountable and decisive.
Given that 90% of all startups fail, there is certainly no shame associated with a decision to fold your tent. I like Sir Winston Churchill’s line: “Success is the ability to go from one failure to another with no loss of enthusiasm.”
Persistence, often cited as a necessary trait in the successful entrepreneur, can also become your worst enemy. Ask yourself these 3 questions:
1.) Are you achieving the goal(s) you established?
2.) Have you asked your mentor, colleagues or others to assess your current circumstances?
3.) Is there anything you have not done to potentially clear a path to success?
If you aren’t achieving your goals, have not received a positive outlook from someone whose opinion you trust and have done everything possible to open a pathway to success, then the time is right to throw in the proverbial towel.
Your First Loss Is Your Best Loss
This is a truism widely quipped in the business world. It means that when you realize you have made a mistake, getting out quick and taking your lumps is almost certainly the best course of action.
Decisive action will serve to preserve capital—capital can make a huge difference in any plans you have to start over. There is no cogent argument for delaying the inevitable. Failure is difficult to accept but failure is also life’s greatest tutor.
One thing is true; every ending is a new beginning. You will have learned great lessons from this experience. Pick yourself up! Put your experience to use. Starting over with the knowledge and insights you have gained will give you greater confidence in the success of your next venture.
Above all, never consider the experience to be a failure. It is a merely a setback. Failure only occurs when you stop trying to succeed and succeed you will!
Question: What was your first loss? How did you deal with it? Please share your experience in the comment section below.