So your business has failed, huh? It seems as if all hope has been sucked down the drain.
What do you do? Learn! Learn from your mistakes so you wont make the
same missteps in the future and instead become a better leader and
Here are some very important points you should take note of after a
business failure so you can emerge from the rubble as a stronger and
more savvy business owner.
In what areas did you spend too much time and/or money?
It is important to examine where you allocated most of your
resources. Allotting most of your time and money to an area of your
business that wont yield positive returns is an inefficient practice and
should be curtailed in the future.
Perhaps you spent too much time on designing an IT infrastructure?
Maybe you spend too much money on office furniture and supplies and not
enough on advertising? You might have even spent too much time researching.
While I can’t emphasize enough the importance of research, doing too
much of it may be counterproductive–it may discourage you from taking
any risks and may lead you spending too much time and money into
preparation and not enough on action.
Either way, evaluating areas that prove to be a money/time drain for
you and your business is important and will allow you to invest your
resources in more efficient and effective areas of your business in the
In what areas did you spend too little time and/or money?
Similar to the last point, perhaps you underfunded certain areas of
your business with little of your time and/or money. Look at all the
vital areas of your business. Sales is a top priority regardless, but
some other areas might be more important to certain businesses while
insignificant to others.
For example, if you are a web design company, chances are you will
need to spend more money on web design and graphic software as well as
more powerful computers than a interior design firm will.
Therefore, consider all areas of your business that added value to
your product and determine if these areas were receiving enough support.
For some businesses, this may be fairly obvious, while for others this
might require some thinking. The important thing to remember is that you
are trying to determine the optimal funding that each area of your
business requires so that your operations will be as efficient and
effective as possible in the future.
What strengths of yours were utilized while this business was running? Which were underutilized?
Are you naturally a good manager? Salesman? Leader? Visionary?
Wherever your strengths lie, leverage them! Especially in the early
stages when you need these strengths the most. If your business failed,
you should determine whether or not you used your strengths to your best
Take this one step further and make sure to determine what your
strengths actually are. Maybe you thought you were good at something but
your performance in this area proves otherwise. Knowing what strengths
of yours to leverage and what weaknesses either need improving or
avoiding are very important skills a leader should have.
Knowing this will allow you to produce for your next business more effectively.
What weaknesses of yours, as an entrepreneur need improving?
Do your leadership skills need some work? Maybe you need to become a
better listener? Or perhaps you have hang-ups on certain little things
that aren’t as important as you think they are.
Whatever your weaknesses are, it is important that you locate them
and either improve upon them or ensure someone else handles them. Again,
delegating something according to skill (even to yourself) is an
important ability for any leader or manager to have.
What particularly missed the mark? Was it targeted customers?
Bad branding? Bad product? What could you do to improve this in the
Try to pinpoint the exact reason why your business missed the mark.
Perhaps it is fairly obvious, perhaps not. However, knowing this will
allow you to, in the future address these problems more effectively,
more quickly and allow you to notice them before they actually arrive.
Does anyone else have any important lessons from business failures that they would like to share?