Everyone has a different definition of failure. However, one thing we all have in common, is that none of us wants to fail, or likes to fail, although we have all failed at some point in the past and probably will again in the future. Failure is an inevitable part of life and something that cannot always be avoided, even when we work hard and have the best intentions. More importantly, maybe it’s not always something to avoid but actually something to learn from?
Fail fast, fail well and move on…
For example, let’s start with Elon Musk and his SpaceX programme. When NASA launches a rocket they plan meticulously, take their time and look at every possible detail before launching. SpaceX, on the other hand, launched as many rockets as they could, fully expecting them to fail, because through the failure process they would always learn something. That allowed them to fail fast, fail well and move on.
Also, rarely has anyone experienced success without failing first. In fact, more often than not, success comes to the people who fail the most. Throughout history, the overwhelming majority of successful business owners and entrepreneurs have experienced failure in business at least once, if not multiple times. Famously, James Dyson created 5,127 of his bagless vacuum cleaner before he got it right. Therefore, if we want to succeed, we have to get over our fear of failure and accept it as a fundamental part of our journey.
“Failure is so important. We speak about success all the time. It is the ability to resist failure or use failure that often leads to greater success”— J.K. Rowling
How does this apply to my business?
It’s a similar story with any business. A healthy economy always has a certain failure rate because, ultimately, business is risky. If there was no risk, there would be no profit motivation. For a business or a company director, failure is not the end of the road, or a step backwards, but rather a steppingstone.
Often growth is the hardest thing to manage when you’re running a business, because it’s almost like dealing with a new business at each stage. We see a lot of businesses that have had an event or a combination of events that they couldn’t foresee or they didn’t foresee. Being a company director is also incredibly hard. It’s a hugely responsibility and there’s no training. Directors often come from a job, buy their own job and then learn on the job!
So, when a business is failing, a lot of directors struggle with feelings of shame or embarrassment, because many define themselves and their business as one thing. There’s a lot of stress and worry associated with the concept of failure. They may also hide any issues from those around them, because they feel they can’t tell their staff or their partner. Some will speak to their accountant, but many directors only see them once a year, late.
Unfortunately, it’s this embarrassment and fear that puts people off getting help sooner. An issue with a sense of failure, is similar to the fear of going to the doctor, in case they tell you the lump’s cancer. However, it’s how you fail and what you do with that knowledge that’s important.
One of our clients was a very successful property developer. He did really well and built the business up but ultimately exposed himself by taking on a lot of debt with the banks. This was fine until the unforeseen happened, and the property market crashed. He was part way through a number of builds when the banks reassessed their funding. They asked him to contribute a substantial amount of money that he didn’t have and then pulled the plug, calling their loans in. The business failed.
But this isn’t the end of the story… He started again and rebuilt the business, while learning from his mistakes. This time he went to private funders, ex-entrepreneurs who were independently wealthy and offered them a better return. He also worked on smaller projects that were more profitable and made sure he paid more attention to his finances. By focusing on specific sites, key relationships and only using private funding, he made more profit three years later than he did on the bigger developments. Also, he was able to bring most of the key people he worked with back into the fold. Lastly, he managed his creditors really well, communicating with them so they knew there was a long journey and were happy to wait.
Restructuring, is also an option. Another of our clients was successful and growing very quickly, but a change in economic circumstances, poor cash flow and errors in their pricing structure, meant they were suddenly faced with a substantial HMRC debt that they had put off and were then unable to pay. They came to us and we set up a long term, structured plan to repay their debts while the company continued trading. They also ran the business in a restructured format, made some redundancies and improved their pricing. It was challenging but they paid their debts and are still trading successfully now.
See the positives in failure
As a society, we’ve become fearful of failing, having been taught that it’s a terrible thing that should be avoided. We’ve taken this so far that we tend to concentrate on people’s successes more than their failures. However, by doing this, we’re passing over the most important part of their journey; how they got to where they are and the failures they encountered before they got there. Failure isn’t a defeat as long as you don’t let it defeat you.
Failure allows us to…
- Learn important lessons
- Make better decisions in the future
- Create new opportunities
- See a new perspective
We’re here to help
At Bailey Ahmad, we’re advocates of the entrepreneurial community and respect the courage that it takes to set up a business. However, we know that things can go wrong, and sometimes you need the help of a specialist to recover. Having to seek advice from an Insolvency Practitioner can be very daunting and is something most people would rather avoid. This is why at Bailey Ahmad we do everything we can to make you feel comfortable and at ease throughout the entire process. We’re highly adept at handling stressful, emotional and sensitive situations; advocating empathy, respect and care. By doing this, we create a space for business owners and entrepreneurs to feel completely safe in seeking help and support.
So, if you’re seeing some warning signs [see our recent article about this here] and need help finding a solution for a financial problem, be that recovery, restructuring, insolvency or restarting, please get in touch with us today to book your consultation. The sooner you seek help, the more options are likely available to you, so don’t delay in reaching out. All consultations are free and confidential with no obligation to proceed. We will listen to you, take the time to understand your situation, and offer you simple, professional advice so you can plan your next steps with confidence. Remember we’re here to help.
The key thing is taking responsibility for trying to find a solution. You don’t have to have the solution, that’s why you get advice. You just need to take responsibility for seeking it out and then be open to help. After years’ of experience, we’re know it won’t be as bad as you think…