Why failure may be necessary for successAugust 23, 2017 11:09 am Leave your thoughts
Numerous surveys suggest Americans are among the most entrepreneurial people in the world, as the opportunity for success is tremendous thanks to the free market system. But there's one thing that's preventing some aspiring business owners from taking up the torch: failure, or more specifically, the potential for it.
Only 30 percent of business last 10 years
The fear of failure is not without cause. According to the Bureau of Labor Statistics, the risk of a company going under generally increases the longer it's up and running. For example, 80 percent of businesses with hired staff survive for at least 12 months of operation. The rate of success drops to 66 percent in year two and falls to 50 percent by year three. Come the 10th year, only 30 percent of businesses remain open.
But business experts are quick to note that failure can catalyze success through learning from the mistakes made and then applying them moving forward.
Jeff Shuey, whose business expertise is in the enterprise content management industry, noted that business owners shouldn't be afraid of failure, but rather embrace it by taking the time to document them.
"Take the time to evaluate what worked, what didn't and why," said Shuey, according to Personal Branding Blog.
Shuey furthered this point by noting that while it may be difficult to actually go over where or how things went wrong, documenting failures is important because remembering them is crucial their serving as learning experiences and teachable moments. Furthermore, when mistakes are made, it's best to own them, rather than deferring to another person or unfortunate set of circumstances.
This isn't to suggest that the buck always stops with the business owner necessarily, but "if you were in a position to influence an action and through a fault on your end something went wrong," accepting blame can lend new perspective and improve leadership qualities, Shuey wrote.
Zach Cutler, CEO of a New York-based public relations agency, says that's it's not only OK for business owners to fail, but it's a must in order to truly get better and grow.
"It's easy to become downtrodden and lose motivation when things don't go as planned," Cutler wrote in contributing piece for Entrepreneur. "Instead, use the failure as a mechanism to reset your perspective, make a mental change or embark on a new, much-needed direction."
Better to fail now than later?
Though it may seem counterintuitive, sometimes failing in the early going can be better than later. Keith Speights, president of a major medical device supplier and a contributor to The Motley Fool wrote failing in the first few years of launching can be the means to a successful end.
"If you're destined to fail, wouldn't it be better to get it over as soon as possible – like ripping off a Band-Aid quickly to avoid prolonged pain? I think so," Speights said. "There are distinct benefits to failing quickly rather than slowly. Total losses would be reduced considerably. Business owners would be able to shift gears more quickly into a more profitable endeavor."
At the Law Offices of Donald W. Hudspeth, P.C., our firm has hands-on business experience, as many of our attorneys come from small-business backgrounds. Because of this, we can offer pragmatic advice and strategic planning that can help business owners recognize behaviors that can lead to defeat. Send us an email, and we'll let you know how we can help.
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