Businesses fail all the time. According to the Small Business Administration (SBA), about 20% fail within the first year, half fail within five years, and 2/3 fail within 10 years.1  The good news is that you can learn from others’ mistakes and your own failures and use that knowledge to help you succeed later.

A business may fail for a number of reasons. According to Forbes, common reasons include not understanding the market, not finding the right funding, having unreasonable expectations, a lack of skills, bad partners, lackluster sales, market invisibility, and failure to recognize an inevitable exit.2 The key is to recognize which factors led to your failure and take precautions to avoid making the same mistakes again.

Even if you've felt the sting of failure in the past, you can't live in fear of future failures. Only people who don't try new things avoid failure, and where would we be if nobody ever tried to innovate? Failure is simply part of the game. It's how you deal with it that will dictate your success afterwards.

"Through the necessity of failure, three lessons changed my life: never give up, build a superior mindset, and design and practice an unshakable belief system," says Mirza Holdings CEO of Com Mirza, who failed in eight companies in a row before becoming the head of a nine-figure, 600 employee company.3 "Failure teaches you the essential missing parts of the jigsaw to learn to reach real success,” she said. “When you own your failures and take responsibility, you gain immense power, wisdom, and maturity. Have an open mind, immense intestinal fortitude, and a deep sense of purpose to conquer the struggles, adversity, and obstacles."

Taking responsibility is a massive part of moving on from failure. You can't play the blame game. It does no good to point the finger at others because it's not going to change anything. In addition, it makes you appear weak and unprofessional. You will earn more respect by taking ownership of your own failures and showing the world what you can do with what you've learned.

Of course, failing doesn't have to mean the failure of your entire business. Ideally, your failures will be tied to ideas or launches that you can recover from quickly and move on.

As David Brown at VentureBeat puts it, “Failing fast isn’t about the big issues, it’s about the little ones. It’s an approach to running a company or developing a product that embraces lots of little experiments with the idea that some will work and grow, and others will fail and die. You could just get something out there and if it doesn’t work, fail fast, pivot, and try something else."4

Regardless of the size of the failure, it is helpful to "fail fast," because that means not only getting it over with quickly, but also moving on to the next idea sooner. It's understandable to be upset when things don't work out the way you hoped, but you can't dwell on past failures. You need to pick up the pieces, and put them back together. Only this time, use your experience and knowledge to put them back together in a more efficient way.

Remember, many of the successful entrepreneurs you admire have failed at something. As Thomas Edison once noted, “I have not failed. I've just found 10,000 ways that won't work.”5
 

  1.  https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questions-Small-Business-2018.pdf
  2. https://www.forbes.com/sites/steveandriole/2016/04/01/10-reasons-why-entrepreneurs-fail/#215c0a8442d9
  3. https://www.entrepreneur.com/article/296940
  4. https://venturebeat.com/2015/03/15/heres-what-fail-fast-really-means/
  5. https://www.brainyquote.com/quotes/thomas_a_edison_132683

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC