A lot of businesses are started everyday with people coming up with new and different ideas to provides products and services. Unfortunately, only a few of this companies actually make it big. Most of the successful entrepreneurs we have once had a failed business. For example, Bill Gates and Paul Allen’s first venture was the Traf-O-Data, which sold just one unit before the business dissolved.

Statistics shows that while most new businesses (80%) survive their first year, only half of them will still exist five years down the road. What is the problem, you may ask.What separates successful entrepreneurs is their view that failures are merely opportunities to learn important lessons about businesses.

You have to realize that failure is an opportunity to take all you’ve learned and apply it to a new venture or role. You have to get back up and move forward. Always keep in mind that there is a lot of risks involved with being an entrepreneur and taking failures with a shift in perspective can result in greater success in the end.

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Accepting failure in business is not easy, infact it comes with challenges like financial hardship, damaged relationships, and a strong challenge to your confidence.

With all these challenges, business failure is not a good time. But here are some steps you can take to help you accept the failure and move on after a business failure.

Find out why you Failed

When your business fail, you hardly have the mental strength to think about what just happen. But it is important for you to analyze your failure, figure out why things went wrong, and determine the biggest contributing factors.

To help you properly analyze the situation, ask yourself this questions, What did you want to accomplish when it started? What did you ultimately achieve? What did you create? Were you out of touch with your customers? Was your product or service truly unique in the marketplace? Did you effectively communicate your value propositions?

When your carrying out this analysis, try to carry along your any partners or employees. The reason is that You may have a crucial blind spot that led to the demise of the business. You’ll need someone else to help you understand how and why those blind spots affected the business. It can help to bring in a neutral moderator to ensure this conversation stays civil.

Be balanced in your analysis. You don’t want to dwell on your past failures, but if you don’t pause to collect insights, you’re bound to make the same mistakes again. Once you have a clearer idea of what went wrong, it’ll be easier to decide whether to tweak your original idea and start over, or whether
you should scrap the whole project and start a new idea from scratch.

Prepare for the Next Stage

Remember that a failed business is not a failed life. In view of this, consider failure as nothing more than an opportunity to reflect and adapt. This is the point where you need to consider whether you want to continue as an entrepreneur of you want to look for a job.

Decide Whether You Need a Full-Time Job

Even after your business has failed, it is possible for you to still have the passion to start another business immediately. But relax and give it sometime because you are prone to errors at the moment.

You need to go through a self-evaluation to determine whether or not that’s a reasonable (and responsible) decision. If you have a family that depends on your income or accrued a large amount of outstanding debt from your last venture, taking a steady full-time job may be the best course of action—at least for the immediate future.

Ignite your Passion again

Experiencing a business failure is an emotional blow to even the steeliest entrepreneurs, but you can’t get stuck down in the dumps. Take this chance to reinvigorate your passion for entrepreneurship.

As you’re giving your business its post-mortem, take note of any tasks that personally brought you joy and those that felt like a drag. Planning for how to maximize the joyful tasks and minimize the dragging ones can help you get genuinely excited to dive into your next business.

Mentors can help jumpstart this process. Listen to them talk about what gets them excited about their business, then share where you’re at with your career. They’ll likely have helpful business tips, along with some ideas for how to blow off steam and stay positive.

Surround yourself with people that will help you grow

Find a mentor, take a class or attend a seminar but allow yourself to continue learning. The more you learn, the more value you bring, which results in you being ready to take on a new opportunity. 

Failure can be daunting at first, but it doesn’t have to be the end of the world. Bouncing back is possible, but it does take conscious effort and the decision to accept and move forward. Learn, adapt and keep working towards your dreams.

Avoid taking business failure personally

The success of a business isn’t easily predicted, and unexpected circumstance can take place at any time. The point is to be fluid and adaptable. The better you can accept and allow for change, the easier you can recover from a business failure or a big change that takes place.

Read Also: 8 Places to find Investors for your Startup

Embrace Your Failure

The only people who fail are the people who take risks, and you should be proud to count yourself part of that group. Don’t allow failure to diminish your self-confidence or wipe out your lofty ambitions. You will have to take more risks if you want to truly succeed.

Author John Maxwell is credited with saying, “Fail early, fail fast, but always fail forward.” His point is that failure is a blessing, so long as you embrace the lessons learned and keep progressing. Don’t be ashamed of past failures or afraid to encounter future ones. Instead, celebrate the ride you took with your past business and look forward to all the adventures in store for the future!

Adjust your mindset

There is no secret to success. But there are many factors that go into what makes you and your business successful. Sure, there is hard work and dedication. But there are also more ways than hustling and grinding 24/7 to make it happen. Developing a positive growth mindset can help you stay on the path to success. 

This may sound a little “woo woo,” or dubiously mystical and unscientific. Yet neuroscientific research has shown that our actions are triggered by intentions, incentives, or intrinsic values. 

A growth mindset is defined by the belief that your intelligence is changeable and improvable. Individuals with a growth mindset see setbacks as a part of the learning process and “bounce back” by becoming more motivated. 

Develop a growth mindset by:

• Learning lessons from your mistakes. There will be a running list of failures in your business. I’ve built three businesses from the bottom up and it was never a smooth ride. Every loss becomes a win. So if you feel like a failure, brush it off. Look at what happened in your business and figure out what you’ll do differently in the future. 
• Staying flexible. Chances are, nothing will go according to plan. Being able to adapt and adjust will help overcome the many business interruptions in your path. 
• Inspiring yourself. Make time for yourself. It’s easy to work yourself to the bone when your business is going through a rough patch. Endless work will wear you down and make you want to quit. 

It’s true that hard work is important, but staying headstrong and happy is even more important to achieving your goals. Use the above tips to achieve a healthy, balanced mind to get through the tough times. 

Set goals

Now that your head is in a good place, it’s time to work toward turning that business around. Setting goals helps guide your focus and sustain momentum. Goals help you reach for a specific result when you feel like everything is falling apart. 

Goal setting is linked with higher motivation, self-esteem, and self-confidence. Research has also established a strong connection between goal-setting and success.

Start small. Don’t go crazy by setting massive goals, because you’ll be disappointed if you don’t achieve them. Set frequent, smaller goals and reward yourself after completing them. Create a series of mini goals that lead to a big goal. 

For example, say your big goal is to get 200 subscribers for your email marketing list. Your mini-goal list could look something like this:

• Sign up for free email marketing software
• Create landing page for email list sign up
• Create an email campaign 
• Promote email list on website and social media

Learn why customers are leaving

It’s common for customers to shop around with other businesses. But if you’re getting negative feedback from customers, you need to find out why. 

Learn why customers are leaving your business. It could be a number of reasons you’re unaware of, such as:

• A poor customer service experience 
• Your product failed to meet expectations
• You didn’t prove your value
• Your sales tactics were too aggressive

Establish a feedback system with existing customers. You can use an app like UserLoop or Fuzzy Surveys to collect feedback and understand what customers really want. This data can help you create better products and marketing strategies that increase sales and loyalty. 

Understand your target audience

A target audience is the group of people you aim marketing and advertising efforts at. Do you know who yours is? Identifying your target market is important because it helps you find new customers easier and bring more qualified buyers to your website, which results in more sales. 

It took cosmetics brand SUGAR three years to truly nail down its target audience. “While we were running our ecommerce business between 2012 and 2015,” founder Vineeta Singh says in a Shopify Masters podcast episode, “we realized that there were a lot of millennial women who couldn’t find that perfect nude lipstick or a perfect red lipstick. There were a lot of colors that were perfect for, say, Caucasian skin, but wouldn’t work on the deeper Indian skin tones.”

From there, the brand identified that its buyers:

• Were Indian woman between 20 and 27 years old
• Live in metropolitan areas
• Consume a lot of digital content
• Are Inspired by global trends
• Want trends Indianized for them

This led SUGAR to create its first bestselling product: liquid lipsticks. These lipsticks are extremely long lasting, which, with India’s humid and hot weather, are perfect for the brand’s target audience. SUGAR went from having one ecommerce store to over 10,000 retail touchpoints, and has become an industry disrupter, raising more than $21 million in Series C funding.

Perform a SWOT analysis 

If you’re a struggling small business owner, now is the time to take a step back and look at things from a broader perspective. That’s where SWOT analysis (strengths, weaknesses, opportunities, and threats) comes into play. 

A SWOT analysis pushes you to look at your business from different perspectives and provides insight into how you’ll perform in the future. If you write a well-developed business plan, a SWOT analysis will be part of it. 

Strengths and weaknesses are internal factors, or something that you can control. Examples include reputation, partnerships, intellectual property, and staff. Opportunities and threats are normally outside your control, such as competitors, economy, market size, trends, and supplier issues.

A SWOT analysis will help get you back on track. It helps you identify problems, work on changes and improvements, and make the right decisions to help create a successful business. 

Take a hard look at your finances

Many issues can sprout up for even the most successful business owners related to finances. Insufficient cash flow, inaccurate reconciliation reports, high external liabilities, debt—these are only some of the preventable problems you can face. 

If money seems to be your issue, you’ll need to look at your expenses and outgoing cash flow. You may want to track finances weekly versus monthly to stay on top of everything. Catching financial issues early can help lessen the impact and keep your company profitable. 

Common financial challenges include:

• Cash flow issues
• No prepared budget
• Unforeseen expenses
• Too much debt
• Poor tax compliance
• Mixing personal and business finances
• Reporting oversights

Get funding if you need it

Working capital is a problem for businesses of all sizes, but it can be harmful for smaller companies with limited resources. Having cash to pay your bills and eat lunch is great, but lack of capital prevents you from hiring, replenishing stock, building marketing campaigns, and developing new products for the market.

To overcome these hurdles, you’ll want to establish a budget for operations, then research and secure financing options before you even need to. 

Shopify Capital is one way to get quick and easy access to a business loan. There’s no lengthy application or credit checks. You can get funded within days of accepting an offer. Plus, you can repay from sales with payments that work for your business.

You can then use the funds to do many things, including:

• Hire new employees
• Bring on an expert consultant 
• Stock up for seasonal sales
• Purchase bulk items on discount
• Order new materials
• Fuel marketing campaigns 

Pivot and change direction

Pivoting sounds simpler than it actually is and could mean many different things to different businesses. For some, it might mean changing your business model. 

For others, it might mean moving to a completely different vertical or changing your target customer. Maybe you thought your product would sell well with acoustic guitar players, but in fact, it might sell better with piano players.

You might need to sell an entirely different product. This sometimes happens because business owners didn’t properly validate their business ideas or products before launching. You need to do a close analysis of what’s working and what’s not, and consider making drastic changes.

Invest in marketing 

At this point you’ve got the foundation to turn around your business. You know your audience, you’ve got cash in the bank, and you’re ready to get the word out. To attract the right customers, you’ll need to implement marketing strategies that attract, engage, and retain them. 

You can get a lot of awareness on a small budget by using social media tactics:

• YouTube marketing
• TikTok marketing
• Instagram marketing
• Facebook ads

Henry Chen, a serial entrepreneur and business coach, strongly recommends leveraging video marketing to promote your business online: “Create consistent, evergreen content. In particular, YouTube videos that are value-driven and searchable.”

He adds, “Focus on solving one to two simple but common and important problems in each video. People are more likely to do business with you after they see social proof and—free—value that you’ve provided. Being that it’s evergreen, your videos will work for you for months and even years to come.” 

Take action

When you know your business is on its last legs, you need to be proactive. Don’t sit back and wait for things to happen before you take action. Take actions that are not only preventative (before things get any worse) but that also fix glaring problems.

There’s no better feeling for an entrepreneur than when he or she is able to turn something around for the better. Every entrepreneur is faced with challenges, and a short-term failing business is just one of many. 

Even if your business fails despite all of your efforts, take it as a learning experience. Many entrepreneurs before you have had failures before their most successful venture. You only need to be right once.

Don’t give up

Some of these difficulties are frequently an inherent aspect of beginning a business. For this reason, it’s critical to inhale deeply, shift your attention, and persevere. Maintain the enthusiasm and zeal that first inspired you to launch your company.

Consider the difficult periods as the “growing pains” you went through in childhood. Your body changed from that of a toddler to that of a young boy or girl, and you didn’t get to where you are today without having some joint pain.

When launching a new company, the same reasoning, or “growing pains,” may be relevant. Consider the agony of perpetually running out of time or having to put out flames; you can surely identify with those.

These are in fact typical problems that a lot of small businesses face, but they are also fixable. If problems begin to consume the company or the business owner, they may result in failure. We therefore cannot overstate how crucial it is to stand back, assess the general health of your company, and pinpoint the source of the issue. It can be something that can be fixed to save a firm from failing.

Set SMART objectives and create a plan

Make a list of your SMART objectives for your business. This will give you clarity and make it easier for you to stay focused and work towards achieving them.

SMART stands for:

Specific: Clear enough to fully understand

Measurable: Can determine when it’s complete

Achievable: Can be accomplished

Relevant: Is connected to your overall game plan

Time-bound: Has a deadline with specific dates

Next, create a plan that will put your SMART objectives into action. As you create a plan, think about the steps you’ll need to take, how long it will take, and who will help you.

Reduce costs and prioritize what you pay

To keep your business open, most likely you’ll need to “trim the fat,” or reduce costs. Start by cutting discretionary, or unnecessary expenses. Then, look at areas where you can cut cost like travel expenses or reduce your utility usage to lower your monthly bills. If you’re renting office space, talk to your landlord to see if they’d be willing to reduce rent or renegotiate your lease. The last place you’ll want to cut costs is people. If you find yourself in a really tough spot, try reducing employee hours and compensation before laying them off.

Talk to creditors, don’t ignore them

If you’re like most small business owners, you probably have debt to pay. Many business owners see debt as a sign of failure, but in reality, small businesses who have debt have higher credit scores. Try not to feel too overwhelmed by outstanding debt or avoid creditors. That only makes matters worse.

Instead, talk to your creditors and explain your situation and your plans to pay your debt. Most creditors are understanding and willing to work with you if they’re confident you’ll eventually pay what you owe.

Finally

The first step is admitting that your own firm is having trouble. Making tough choices is necessary to prevent cash flow problems and business closure.

Getting finance or discovering a whole new clientele are just two examples of why it’s acceptable to pause and refocus your company. Everything falls under the umbrella of entrepreneurship.