Turn Failures Into Profits – for entrepreneurs, going under was just the beginning
This is an excerpt of an article about Marty Metro (after he left Corporate America) who sold used moving boxes and the lesson he learned after his business failed. He started with opening four stores in a hurry and was hoping to franchise the business throughout the country.
Metro enjoyed healthy sales but could not turn a profit and three years later, he amassed $300,000.00 of personal debt. Most people would be discouraged and give up the dream of being an entrepreneur but not Metro. He considered his failed business as lessons learned, and re-launched the business using the skills and contacts he acquired. He soon raised enough venture capital for his UsedCardboardBoxes.com – a web based version of his original business.
Track Record and good will
Although you are left with debt and not cash in your pocket, the network of people – investors, vendors and suppliers that you accumulated are a testament of your hard work and track record.
However, the next time you start a business, you need graphics, you need an accountant and you need a lawyer. Those are good relationships to maintain and sometimes really hard to develop.
Some may think having a failed business would damage your reputation, but it is how well you relate with adversity and treat investors, employees and customers that matters most. Metro attests to that, he has employees that came back to work for him from his first company even though he could not pay them at the time.
Lessons learned from running a business
The managerial experience of running a business is priceless, something that you cannot buy, including from a MBA classroom.
The ability to learn from your experience and reflect that allows you to plan and improve the second time around. But improving on past business decisions is not the only benefit one can utilize, pinpointing which tasks you can excel in and learn to better delegate is also a very valuable asset from your failed business.
Another entrepreneur July Parrish intones, you need to recognize one cannot do it all on your own, it is important to share responsibilities with partners and staff who can do certain jobs better than you. Understand the pitfalls of dealing with accounting issues, make good decisions about how people get paid and when to do go out and chase funding.
Over 50% of first time entrepreneur fail
So, needless to say, it is very important to try, try again. Set some objectives beyond just ‘This business is going to make me lots of money’, like build up a network of people, resources and series of experiences.
The next suggestion is easier said than done, but you must consider this: separate personal life and professional life; do not commit yourself to financial loss that takes years to recover. If you can, do it with other people’s money.
The company does not define you, who you are defines you. Metro said, ‘Failing is not the end, failing is just a speed bump’. The process of doing it should be just as rewarding as success.