If you had ten thousand dollars and I were to offer you the opportunity to invest in a situation that required: 10 hours of your work day (and some weekends), large amounts of additional stress, the potential to lose your family, friends, and your peace of mind – all with a 90% chance that you would fail, would you invest in it?
Then why in the world do entrepreneurs invest so much in a small business?
Thriving in Failure
The greatest lesson that real life can teach us is that, when it comes to a business enterprise, many of our attempts will fail, while a very few will succeed.
Now, this article is not only about the prevention of business failure, but also about how to overcome business failure – because it is bound to happen at times.
There is an essential principle that exists that can enhance the lives of business owners even if they fail. And that is:
“Great businesses plan for the worst, yet hope for the best.”
By hoping for the best, yet preparing for the worst one can prepare for and even survive the devastation of business failure and become all the better and smarter for it.
You see, if an entrepreneur can survive failure, they will only be smarter, more experienced and more determined the next time around. Since it is in the nature of business leaders to continually create new ideas, it will only benefit them to fail, and to learn valuable lessons from their mistakes.
History is full of business entrepreneurs that had countless failures before the idea or idea that propelled them to greatness was finally discovered. Yet, this is only possible if an entrepreneur can survive the devastation of failure.
What are the ways to survive and thrive even in failure? Though there are many I will focus on the most important ones which include, managing expectations, limiting liability, avoiding personal guarantees, and having adequate cash reserves.
What expectations should a business leader have in their mind? The reality is that there is a very great chance that their enterprise will fail. By accepting this fact, one is less likely to cross emotional boundaries by investing an unwholesome amount of time and energy into an enterprise.
One would be less likely to skip a child’s birthday party, or be late to a dinner appointment with a spouse. One would be less likely to invest the family’s life savings on an idea that may or may not be successful.
Yet, one would be more likely to be prepared for the forces beyond ones control, such as an economic downturn, or a new and stronger competitor – and be able to make the best decisions that will prepare the organization to overcome whatever challenges that come against it.