(This blog has been adapted from an article from SBA.)
Whenever we set out to do anything, there’s always the chance of failure. Whether it’s a new business venture or a product launch, success is the goal, but there’s also the possibility of a setback.
The U.S. Small Business Administration gives examples of hypothetical situations such as:
One of your biggest clients decides to leave you and start working with one of your competitors.
The product enhancement you thought everyone would love falls flat.
The new hire who seemed like a perfect fit for your company doesn’t work out.
Your sales for the quarter have fallen far short of your goals.
A regulatory change has dramatically increased your costs to produce your product.
They go on to say, “No company is immune to misfortunes that put obstacles on the path to progress. How entrepreneurs conduct themselves in those humbling instances makes a tremendous difference in how quickly and effectively their businesses bounce back.”
So, how can you recover from business setbacks? SBA gives five ways to “get over and beyond the disappointment.”
1. Acknowledge and accept it.
Going into denial or letting your pride get in the way of owning up to a business mistake or failure will only make matters worse. Take a deep breath, and accept that sometimes things go wrong. Realize that when humans are involved in anything, there’s the potential for human error. It’s OK to feel frustrated, but avoid pointing blame at yourself or others. Take responsibility, and then hold your head high as you take the steps needed to turn things around.
2. Put it into perspective.
Many people get into the habit of blowing problems out of proportion. Before going into “the sky is falling” mode, take a step back to assess how significant the predicament is in the grand scheme of things. Is it a financial loss that is going to affect your ability to pay your vendors? Is it a product flaw that has created a brand image problem? Is it a contractual issue that could cause legal troubles? Instances like those demand urgent action, but not every setback you face will put you in dire straits. Evaluate the impact before jumping into crisis mode.
3. Don’t dwell; direct your attention toward determining what went wrong and fixing it.
Feeling sorry for yourself won’t help the situation. Put your emotions aside, and objectively evaluate the cause of the setback. Was it due to unclear language in your agreement with your customer? Was it because your customer service staff didn’t have proper training? Was it because you failed to do enough market research? Immediately start laying out what you will change to ensure it doesn’t happen again. This may require enlisting the help of professionals who specialize in certain business disciplines, such as human resources, law, finances, taxes, public relations, etc. Make sure you develop a clear plan for what needs to be done differently, and share it with your team so everyone is on the same page.
4. Embrace it as a learning moment that will make your business stronger.
As Malcolm Forbes once said, "Failure is success if we learn from it." As devastating as business speedbumps might be, they can benefit you in the long run. The key is to look beyond your dismay, and use the newfound wisdom gleaned from the experience to improve your company. For example, losing a key client that results in you implementing a customer loyalty program will help you retain clients—and the revenue they bring to your bottom line. And making a bad hiring choice that prompts you to expand the breadth of questions you ask when considering job applicants can help ensure you choose top-notch talent going forward.
5. Reach out to trusted advisors for insight and support.
You don't have to go it alone when the going gets tough. Connect with a trusted advisor, like a SCORE mentor, a business coach, another entrepreneur who experienced a similar setback, or someone else you respect and can depend on for insight and guidance. Talking through your issues with someone who understands what it takes to overcome business challenges can help you figure out how to get past the difficulties you're facing. It can also provide you with the inspiration and motivation to power through the situation with confidence.