Sunday, September 26, 2010

Why Small Businesses Fail

At first glance, this post does not seem very positive. After all, who likes to think about or discuss failure? I do! I do! Pick me!!!

I think the word "failure" has a bad sound. No matter how good it may be for us (and it is!) we can't get past the idea that failing at something means we are not good enough. We have not accomplished our goal, and therefore, there is something wrong with us. Sometimes, the fear of failure can keep us from even trying at all.

When it comes to small business failure, the stats are kind of hard to interpret. Suffice to say, about a third of small business fail within the first few years. This encompasses the end of the business because of lack of profit, investment loss, and a host of other circumstances. Whether the reason for the business ending is lack of planning, poor management or undesirable location, inevitably, the owner will end up asking themselves if it was a bad idea to have started the business in the first place.

The reality is that the failure could just as likely be attributed to bad timing, changes in the economy or world events, things that are much more difficult to control. And, each and every experience we have in business, and in life, leads us to the next one, with more knowledge and understanding. Even the failures. Maybe especially the failures.

What do we teach our children about failure? Try. Try. Try again. It is okay if you didn't get it the first or second time. Let's give it another shot. If you want to learn something new, you have to take a chance. Once you get it, you will be so happy you kept trying. As entrepreneurs, we need to take our own motherly advice. Actually, all adults need to take that advice. Always wanted to learn to snow board? Sign up for some lessons. Always wanted to run your own business? Take the leap. If it doesn't work out, leap again.

A few years ago, I started a small business. I was going to edit home videos of people's families for them to watch on DVD. I did some research, made a plan, created a website, did my best to market to the right demographic. Everyone liked the idea, loved the videos and I had a few clients, but I underestimated how difficult it would be to convince people to pay for this service. It is very time consuming, and most people feel they could do it themselves, even though they never do. (I am still trying to let it go.) Recently, I have concluded that the home video business idea was a failure. Time to move on.

I cannot tell you how much I have learned in the last four years, while failing at small business. I have made lots of entrepreneurial contacts/friends, absorbed everything I could about online marketing, and become a better business person. All of which will help me in my future endeavors, whatever they may be. I would not go back and change my choice, because where would I be without the wonderful failures that got me here.

So go ahead. Do your research, make a plan, choose a great location. And take a chance. If you succeed, fantastic. If you don't, even better!

Was there a time when you failed at something and it was ultimately a good thing?

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