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 entrepreneur.
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 future.
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 advantage.
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 future?
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?