Over the last couple of months I’ve been witness to two businesses dying. I’ve met both business owners through my work with entrepreneurs – and at least one of them has become a close friend. I’ve seen the process each of these business owners has gone through and talked with them to see if I could help in some way. Most notably, both of these entrepreneurs are going through something similar to a loved one dying – and the emotional journey is heart-wrenching.
The statistics are not encouraging
We know that many small businesses fail. According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year. The same report states that:
About half of all establishments survive five years or longer. In the past decade, this ranged from a low of 45.4% for establishments started in 2006, and a high of 51.0% for those started in 2011. About one-third of establishments survive 10 years or longer.
But as sobering as these statistics are, the reality of losing a business looks much different to the entrepreneur at the centre of it.
The financial burden
The first, and most obvious, burden a business owner has to face is the financial one. When a business fails, the entrepreneur has usually exhausted almost all other financial resources to survive. Credit cards are maxed out, loans were made and you had to scrounge and scrimp to make ends meet. Just servicing the debt on your credit cards is difficult and becoming near impossible.
The financial burden is difficult enough to shoulder – but it also adds to the emotional burden.
The emotional burden
When things start going down there’s always the hope that you can somehow recover. You put in more hours, work harder, hustle more and pull out every stop to get revenue in the door.
When you reach this point, you’re already carrying an emotional burden, and the stress of having to appear happy and relaxed and successful on the outside clashes with your inner turmoil and insecurities.
Add to that the demands of feeding a family, looking after children and facing your partner, and you’re entering what I call the “swan phase” – things still look ok from the outside but underneath the surface there’s a lot of furious paddling going on.
You’ve reached the point where it’s easy to snap at even the smallest thing. When a partner reaches out to ask for something you want your reaction to be loving, but often your first inner thought is “please not something else someone is asking me to do”. Been there, done that.
Is there a happy ending to this story?
Yes there is. This is not just a story about how tough things are when a business dies. I wanted to write about the tough bits because I know what it feels like – I’ve been there myself. I wanted to acknowledge what you’re going through, because it is important and it can be a really shitty feeling.
And there’s one more thing that I need to talk about.
The sense of personal failure
When your business fails, you feel that you’re a failure. You set out with the best of intentions, hopes and dreams, and all of those things seem like they’re gone. You put in your best and your best wasn’t good enough.
This is the most difficult burden to bear.
No matter how hard we try to look at things objectively, that feeling of personal failure is perhaps the most difficult one to bear. It may even feel that you’re going to carry this for the rest of your life, and it saps your energy and motivation and good will to those around you.
But it’s not true.
The entrepreneur’s quest
You started building your own business because something drove you – and most of the time it’s not just about the money you thought you were going to make. There was a higher reason you started the business in the first place – whether that was creating something you love doing, helping others avoid the pitfalls you’ve gone through or just the freedom to live a better life – there was a higher reason.
And even if things look dim right now, that higher purpose has not gone away. You still have that dream inside of you, even though you feel that you personally failed to achieve what you set out to do.
That higher purpose is what will get you through this.
Right now, you have to go through a difficult process. The entrepreneurs I mentioned at the top of the story have very different circumstances and very different businesses, and each is going through a difficult process of either winding a business down or trying to see if they can salvage it.
But both of them also still have that higher purpose – the emotional need to make the world a better place. And that is where the happy ending to this story starts.
First things first
If you’re in a tough place, you have to focus on the things that are most important right now. In some cases, that could be winding down the business in such a way that you don’t leave chaos behind you. In other cases it may be finding a job so you can feed the family. This is the most important hole to plug, and you’re going to have to focus on that first.
Then you need to decide whether you’re going to throw in the towel on this particular venture, or fix what wasn’t working and try again. In some cases, throwing in the towel is the best option – you need to give yourself the breathing room to recover and come back at it again.
In other cases you may still believe in the business you started and still believe you could make a success of it. If that’s your situation, you have to stand back from what you did before and clearly figure out what you did – or didn’t do – that caused things to go sideways. That can be difficult, and you may have to get trusted advisors to tell you what they think went wrong because you’re too close to the problem.
Your new superpower
You now have a new superpower – the power of experience.
You’ve seen what can (and did) go wrong, and as long as you’re willing to open your eyes, recognise your mistakes and learn from them, your chances of success next time round are way better than when you started out the first time.
We don’t learn much (if anything) when things are going well. We learn the most – and the fastest – when things go wrong. This is the very definition of experience, and why we seek out people with experience to learn from the mistakes they made. As a friend of mine said: “our claim to fame is that we’ve gotten it wrong more times than anyone else”.
A journey of hope
As tough as things are right now, you will get through it in some form or fashion. You may have to get a job to make ends meet, or you may decide to damn the torpedoes and go full steam ahead. Or get through this using a combination of both.
Driving you on this journey will be your higher purpose. You may want to help make the world a greener place, or you may want to help other be more successful in their own lives and businesses. Or you may just want to provide your family with the life you would like them to have.
Whatever that purpose, know that it is a worthy reason to do what you’re doing, and you’re not a failure because you didn’t make it the first time. You’re paying some very expensive school fees, but you now have the experience – a new superpower if you like – to help you make it next time round, whatever form that takes.
You’re not just a statistic
We’re all part of some statistic somewhere, but when you’re in the midst of a dying business those statistics are not a lot of help.
Know this – you’re not just a statistic. You’re doing something very difficult, and you should acknowledge that and hold your head up high. You will get through it and you are already wiser than you were when you started out.
I’ve been nothing but amazed at the lion’s courage entrepreneurs show when they’re in trouble. Even when it feels like crap, know that there are those of us who see what you’re going through, have the highest respect for your courage – and we’re rooting for your success.