12 Strong Reasons Why Small Businesses Fail

Why do small businesses fail? And what can you do to avoid failing in business? I advice you read on to find out. It is no longer news that 99% of all new business ventures fail in the first ten years. Now since the dream of every entrepreneur is to build a successful business, I have tactfully highlighted 12 major reasons why small businesses fail and how you can bulletproof your business against them. If you are ready to learn, then read on.

“There are no disasters in business that you can’t avoid if you see them coming and make the adjustments.” – Boune T. Pickens. Jr.

12 Strong Reasons Why Small Businesses Fail

1. Lack of Managerial Skill

When a small business owner lacks the managerial skill required to drive the business to greater heights, that business is bound to fail. Building a business without the necessary managerial skill in place is a futile adventure. An entrepreneur that wants to succeed must be able to effectively handle the employees, cash flow, production line and so on; or better still; the business owner must be able to hire a good manager to run the business.

2. Wrong Business Decisions

This is common to every human being irrespective of your field. Sometime ago a friend of mine, after carrying out critical analysis on a particular situation came up with a decision he considered favorable. But on implementing that decision, it back fired and at the end of the day, my friend had several lawsuits dangling on his neck.

So whenever you have decided on an action to be implemented on your business, consider asking friends, business partners and professionals for advice. It is going to save you the stress of cleaning up the mess resulting from wrong business decision taken.

“Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst case scenarios. Add up the plus or minus factors, discuss it with your team and do what your guts tell you to do.” – The Mafia Manager

3. Harsh Government Fiscal, Economic and Monetary Policy

This is an open killer of both big and small businesses. As an entrepreneur, you must be on guard to bulletproof your business against the ever changing government fiscal and monetary policies. Since you cannot influence or alter the government’s decisions, you must be ever prepared to swiftly adjust your business to prevent it from being hit by the adverse effect of unfavorable government policies. Instances of such government policies you must be on guard against are business taxes, double taxation, duties and levies, inflation, exchange rates and so on.

“How fast a company can respond in an emergency is a measure of its corporate reflexes.” – Bill Gates

4. Inability to Move Swiftly With Trend and Changing Technology

It is obvious that some people hate change, some resist change while others embrace change. Change is constant, so it is either you align your business with the trend and ride to the top or you remain stagnant and eventually fold up. You also need to constantly upgrade your technological strengths as swiftly as possible.

“Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. That speed of change is trend.” – Ajaero Tony Martins

As an entrepreneur, you must be on your toes sniffing the air for available trends and new technologies you can take advantage of. Examples of great industrial trends and technologies are computers, e-shops on the internet, automated accounting, e-payment and so on. Remember, trend is your friend, not your enemy.

5 Weak Management

This is the fundamental reason why small businesses fail to survive. A standing rule in the business world is this:

“The success or failure rate of any business is directly proportional to the strength and level of professionalism of the management.”

From the first day of business, a very strong management is needed to ensure the survival of your business. You might say employing professionals such as attorneys and accountant is very expensive but they will do your business good in the long run.

Better still, you can consider bringing in these professionals as partners. By applying this method, you will not pay them salaries while employing their services but they will share in the profit of the business. It is a win-win situation. No matter what tactic you wish to apply, ensure you have a strong management strategy.

“My most important word in business is ‘Strategy’ and the reason is this: The speed at which your business grows is directly proportional to the overall strategy deployed on that business and the team behind the creation of that strategy.” – Ajaero Tony Martins

6. Fierce Competition

Most small business owners are afraid of competition because many profitable ventures have been forced to shut down due to fierce competition. I want to let you know that even if you are the inventor of an idea, that will not stop competitors from coming in.

“In business, the competition will bite you if you keep running. If you stand still, they will swallow you.” – Victor Kiam

So your best bet is to keep an eye on your competitors, utilize every available innovative idea and make your customers happy. You can also implement some of the best protective firewalls to keeping your competitors at bay. These firewalls are: Trademarks, Patents and Copyrights.

12 Strong Reasons Why Small Businesses Fail

7. Wrong Business Location

The location of a business is such an important factor that can never be over emphasized. If your business is located in an interior area than your competitor’s, you are bound to fail. Factors to consider when choosing a business location are road network, nearness to high traffic zone, accessibility and patronage level of customers, population, demographics and so on. For example, imagine a business that sells motivational books located in brothel. What do you expect? Nothing but outright failure.

8. Lack of Knowledge and Experience in the Chosen Field

I don’t need to write much on this, it is self explanatory. You can’t succeed in a field where you have no knowledge and experience about. No more, no less.

“Risk comes from not knowing what you are doing.” – Warren Buffett

9. Bad Debt

This is another reason why small businesses fail. When a business is owed much as a result of free credit line to customers. That business is bound to fail. One key role of an entrepreneur is to keep an eagle eye on the cash flow. Since a business must never be short of cash and customers too must be kept loyal, the business owner must establish a certain credit limit and a fixed time from date of purchase to pay up.

“There is one paradoxical characteristic every entrepreneur must possess to succeed. An entrepreneur must be able to persuade his debtors to pay their debts promptly and at the same, must tactically delay payments to his creditors.” – Ajaero Tony Martins

10. Insufficient Capital

Raising capital is the primary duty of an entrepreneur because cash flow is the life blood of business. Insufficient capital can kill even the most profitable business. In a case where there is insufficient capital and the business is finding it difficult to access funds from bank and investors; the entrepreneur must resolve to bootstrap financing, which is working with the limited cash, eliminating unnecessary expenses, establishing a credit line from suppliers and producing only on demand to avoid tying up resources.

“Business. It’s quite simple; it’s other people’s money.” – Alexander Dumas the Younger

11. Internal Fraudulent Activities

Bad employees can be a chief cause of failure of any business. When you have illegal business transactions and cash siphoning being carried out by employees at the expense of the business, that business is bound to face liquidation. So an entrepreneur must keep a keen eye on the activities of employees with respect to the business.

“There will be times when you will have to be abrasive, even brutal to members of your staff. Don’t worry that your people will say bad things about you because of this. They already have. But in general, try to be pleasant and accommodating. Try to please the greatest number who work for you that you can; antagonize the fewest. Blow smoke.” – The Mafia Manager

12. Lack of Entrepreneurial Skill

I will prefer to call this the ultimate reason why small businesses fail. When an entrepreneur lacks the necessary skills such as leadership skill, cash flow management, sales, persistence and self belief and so on; such an entrepreneur is bound to fail. An entrepreneur is the head and pilot of the business. Consider an airplane being flown by an inexperienced young pilot? The outcome can be better imagined.

In conclusion, these are the 12 chief reasons why small businesses fail. Having noted each one of them, you can strive to avoid them; while growing your business.

The Entrepreneurial Process to Starting a Business from Scratch

Today, I will be sharing with you the step by step process every entrepreneur must undergo when starting a business from scratch. This process is called the “Entrepreneurial process.” This is the same process that brings into being; both great and small businesses.

“In the game of entrepreneurship, the process is more important than the goal. When you start building a business, you begin a journey, a process. This process has a beginning and an ending and between the beginning and end lays a lot of challenges. You will win only if you remain faithful to the process.” – Rich Dad

Entrepreneurship is a process; a journey, not a destination. You can never build a successful business without undergoing the entrepreneurial process and there’s no exemption to this rule. Bill Gates, Warren Buffett, Larry Ellison, Steve Jobs, Mike Adenuga, Oprah Winfrey and Aliko Dangote; the richest black man in the world all went through this process.

“The most important thing is to enjoy yourself and continue to work. Life is a journey, not a destination. That’s also true in business; your objectives keep moving.” – Thomas J. Burrell

Before I proceed to highlight the phases of the entrepreneurial process, I think it’s worthwhile I let you know that not all who start this process will end it. There’s no big deal about it; it’s the norm. Such is life. Many will quit along the way so it’s up to you to decide if you will be one of the losers or winners.

The Entrepreneurial Process to Building a Business from scratch

1. Experience the entrepreneurial seizure

The entrepreneurial process usually begins with the entrepreneurial seizure. I think I first heard the term “entrepreneurial seizure” from the book “E-Myth Revisited.” Every entrepreneur experiences this seizure and you can know you’ve been affected by it when you begin to ask yourself any of these questions:

Why can’t I be my own boss?

I am tired of this 9-5 job?

I work so hard but my boss doesn’t recognize me.

Why am I working for my boss when I can go out on my own?

I am gifted, why can’t I make money with my gift?

“It’s within everybody’s grasp to be a CEO.” – Martha Stewart

Once you begin to nurture these perceptions, the entrepreneurial process has begun. It’s in this phase that you will begin to question conventional wisdom. During this stage, the primary keywords on your lips would be: Why, how, what, when, who and where.

2. Plan the business

Any entrepreneur who makes it through the first stage usually begins to draw up a plan of a proposed business venture. In your spare time, you will fantasize, scheme and plot. You will imagine yourself being at the helm of affairs. You will begin to analyze the possibilities of going ahead with your business idea; once you have drawn a business plan, know that you’ve just completed the phase two of the entrepreneurial process.

“A plan is a bridge to your dreams. Your job is to make the plan or bridge real, so that your dreams will become real. If all you do is stand on the side of the bank and dream of the other side, your dreams will forever be just dreams. First make your plans real and then your dreams will come true.” – Rich Dad

3. Make mistakes and learn

In the process of planning your business, you are bound to make some mistakes. Your mind will begin to show you reasons why building a business is not for you. You will begin to see reasons why you need your job more than ever. You will also experience some disappointments that will make you almost quit.

“The size of your success is measured by the strength of your desire, the size of your dream and how you handle disappointment along the way.” – Rich Dad

The sad truth is that many entrepreneurs don’t go beyond this phase of the process; their dreams die in the planning phase. I have seen entrepreneurs with solid business plan; back out of the process simply because no one wants to invest in their idea. I have seen entrepreneurs rewrite their business plan, year in year out; because they are held back by the fear of failure.

“The biggest challenge you have is to challenge your own self doubt and your laziness. It is your self doubt and your laziness that defines and limit who you are.” – Rich Dad

That’s why this third phase is all about making mistakes and learning. Even if no one wants to invest in your idea, keep learning and improving on your plan. You might make a couple of mistakes but don’t quit. If you can boldly forge ahead despite disappointments, you will move on to the next phase of the process.

“Underneath every mistake in business is a valuable lesson. Unfortunately, many entrepreneurs miss these lessons because they lament and blame others over the mistakes.” – Ajaero Tony Martins

“Like success, failure is many things to many people. With positive mental attitude, failure is a learning experience, a rung on the ladder, and a plateau at which to get your thoughts in order to prepare to try again.” – W. Clement Stone

4. Start a Business

“Start small and dream big.” – Rich Dad

Many come up with bright ideas and write powerful business plans but only few ever dare to start a business. If you have gotten to this phase of the entrepreneurial process, I say congratulations.

“Starting a business is like building a ship and embarking on a voyage, armed with a plan, a map and a team. You will have to sail against storms, unpredictable weather and uncertainty. If your ship sinks, it’s either you quit or you swim back to shore, build a new ship and sail again.” – Ajaero Tony Martins

5. Sustain the business

Starting a business just the beginning of the game; sustaining that business is where the real challenge lies. This is where you fight to keep the business you have started afloat. You will have to handle competition, find customers, deal with critical business challenges, pay bills upon bills, deal with employees and so on. This is where the stress of running a business gets worst.

“Business, more than any other occupation, is a continual calculation, an instinctive exercise in foresight.” – Henry R. Luce

6. Make mistakes and learn

This is the phase where many new businesses go down. This phase is the reason why 99% of all small business startup fail in their first five years. At this point, silly business mistakes will be made that will result to loss of cash, customers or crucial employees. This is the point where you begin to regret why you ever started a business. If you are not strong hearted, you will let go the dream of building a business.

“Sometimes when you innovate, you make mistakes. It’s best to admit them quickly and get on with improving your other innovations.” – Steve Jobs

“A mistake is a signal that it is time to learn something new, something you don’t know before.” – Rich Dad

What smart entrepreneurs do at this phase is to seek new answers. They assess themselves to see the necessary entrepreneurial skills that is lacking. They attend seminars, read books on business and entrepreneurship, find a business mentor or form strategic alliances.

“One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.” – Rich Dad

“There are no mistakes in life, just learning opportunities.” – Rich Dad

7. Stick to the process

“You can always quit, so why quit now.” – Rich Dad

After seeking new answers, this is the phase where you implement the answers found on your business. It’s the phase where you take the bull by the horn and refuse to call it quit. Only few entrepreneurs ever get to this phase because it takes a lot of time, resources and commitment to stay on this phase. Getting to this phase might take about three to ten years from the point of starting the business.

“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” – Aliko Dangote

8. Build a successful business

If you stick to the process without quitting, you will finally have the business of your dreams right in your hands. This is the phase where your business needs you no more because your presence or absence will have little impact on its growth. This is the phase where you celebrate your achievement. At this point, you can choose to either exit the business or stick with it. But regardless of the choice made, the money will keep flowing.

9. Count your wins or losses

Every successful entrepreneur usually comes to this phase. This is the phase where you reflect over the process of building a business; the business challenges you overcame, the games you won or lost and the business failures you have experienced. This is where you share your story of success or failure with others; it’s the phase where you decide if the entrepreneurial process was really worth undergoing.

10. Retire or repeat the process

This is the final phase of the entrepreneurial process. Less than 20% of all entrepreneurs that started the process get to this phase. At this phase, you are self made and you can choose to either retire or repeat the process. I said retire or repeat the process because I have seen entrepreneurs who start the process all over again even after building a successful business. Others will retire but come back to repeat the process because of the challenges and excitement it offers. So whatsoever choice you make is left for you to decide.

“I’m not afraid of turning 80 and I have lots of things to do. I don’t have time for dying.” – Ingvar Kamprad

These are the ten phases that make up the entrepreneurial process. Remember, not all who started this process makes it to the end. Will you make it to the end of the process? Only you can decide your fate.

10 Causes Of Small Business Failure You Must Watch Out For

If you visit a construction site or a chemical plant, you might see some warning signs. These signs are called “red flags” and they alert you of impending danger. Just as there are red flags in life, so are they also in business. In business, red flags are there to save us but most of the time we ignore it.

“Failure is an opportunity to begin again more intelligently.” – Henry Ford

In the process of starting a business, there are signs of business failure you must watch out for. I am going to reveal this signs to you. Whenever you see these danger signs in your business, you must act fast.

10 Cause of Small Business Failures You Must Watch Out For

1. High Debt Ratio

The first cause of business failures you must watch out for is high debt ratio. If your business is being owed much, maybe by giving too much credit to customers, then your business is at risk. Also, if your business is heavily indebted, then it’s at risk of folding up. An antidote to this is for you as an entrepreneur to always carry out an acid test ratio and keep a keen eye on the debt to equity ratio.

“There is one paradoxical characteristic every entrepreneur must possess to succeed. An entrepreneur must be able to persuade his debtors to pay their debts promptly and at the same, must tactically delay payments to his creditors.” – Ajaero Tony Martins

2. High level of mismanagement

The second cause of business failures is high level of mismanagement. If your key staff lacks professionalism, then your business is in trouble. Since your staff are in charge of running the day to day affairs of your business, their professionalism should not be compromised for anything.

“There will be times when you will have to be abrasive, even brutal to members of your staff. Don’t worry that your people will say bad things about you because of this. They already have. But in general, try to be pleasant and accommodating. Try to please the greatest number who work for you that you can; antagonize the fewest. Blow smoke.” – The Mafia Manager

3. Unexpected resignation of staff

The third to watch out for is the unexpected resignation of staff from sensitive position. This can really pose a threat to your business so you must be prepared for it. In business, poaching is really a factor to deal with. Big companies are always poaching good employees away from other companies by enticing them with improved salaries and incentives.

“The competition to hire the best will increase in the years ahead. Companies that give extra flexibility to their employees will have the edge in this area.” – Bill Gates

4. Inadequate Inventory

Another factor that leads to small business failures is inadequate stock or inventory. I don’t need to emphasize much on this because the point is clear. If you have inadequate stock either for production or for your customers, your business is bound for failure. Also; if you stock too much inventory, you are still bound to fail because you are tying down working capital.

“Inventories can be managed but people must be led.” – Henry Ross Perot

5. Selling products below cost price

The fifth cause of business failures is the sales of goods and services below cost price. Sometimes in business, cash crunch, fierce competition or economic factor make businesses sell their goods below cost price and this can ruin your business.

6. Dwindling working capital

Dwindling working capital also cause of business failures and you must watch out for. Depreciating working capital may be as a result of unnecessary expenditure, too much inventory and weak cash flow management on the part of the entrepreneur.

7. Consistent negative cash flow

The seventh factor that could lead to business failure is consistent negative cash flow. Cash flow is to business what blood is to humans. No business can survive without strong cash flow management. A solution to negative cash flow is to hire a professional accountant to keep a keen eye on the cash flow.

“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad

8. Declining Profit

Declining Profit, if not handled properly can cause business failure. If there is a down turn in profit margins due to competition or deflation, your business could be negatively affected. A solution to declining profit is to increase your sales volume so you can make more profit on turnover or better still; diversify.

9. Loss of market share

Loss of market share is the ninth cause of most business failures. If you observe you are losing your market share due to either competition, new technology, innovation or trend, then this is a sign that your business is on the verge of been liquidated.

“Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. That speed of change is trend.” – Ajaero Tony Martins

The only prevention to loss of market share is to keep your ears to the ground for any new industrial trend, technology or innovation. You must also keep an eye on your competitor and be quick to act and adapt to any positive or negative industrial change or once again; you can diversify.

10. Inability to secure operational capital

Lastly, your inability to secure funds from financial institutions could lead to business failure. I really don’t know what to say on this one because raising capital is one of the most difficult tasks in business. But it is often said that “where there is a will, there is a way.” If financial institutions refuse to assist you financially, you have to turn to other sources of funds.

In conclusion, the overall cause of business failure is lack of control on the part of the entrepreneur. Never leave total control of your business to your employees even if they are professionals. Remember, professionals are only there to advise you on what to do. The final decision lies in your hand as the entrepreneur and business owner.

“Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst case scenarios. Add up the plus or minus factors, discuss it with your team and do what your guts tell you to do.” – The Mafia Manager

Six Lessons from My Failure in the Network Marketing Industry

For every success story, there are fifty corresponding failure stories and just like every other person; I have had my own share of failure. One of the reasons why I take the pain to share my failures with you is to make you realize that failing is not abnormal; in fact, it is part of the process of becoming a success. Secondly, I want you to know that I don’t succeed in every business venture I engage in; so don’t think I am a super human when I tell you about my successes. Thirdly, I have come to understand from personal experience that success is a poor teacher and it tends to make you believe you are infallible. But failure, though painful is the best teacher. You learn more from your mistakes/failures than your successes. Success inspires but failure teaches; and this is the sole reason why I listen keenly to failure stories than success stories.

I once joined a network marketing company as an independent distributor and along the line, I failed. Well, I have explained the reason why I Failed to Build a Network Marketing Business so I won’t be going into the details here. After my failure as a network marketer, I picked myself up and moved on but not without the lessons learnt. And with lessons learned from this single failure, I have built several successful businesses; so it’s this same lessons I want to share with you now. If you are planning on starting a multi level marketing business; then I will advice you read this before launching out.

Six Lessons from My Failure in the Network Marketing Industry

1. There’s a process to building a successful business and that process can never be bypassed

Before I signed up as a network marketer, I was told network marketing was an easy, stress free and quick paying business. I was told that my primary task is just to recruit new distributors and I will be on to a steady passive income. Now considering the low start-up capital involved, I felt I had nothing to lose; so I signed up with enthusiasm and high hopes of becoming a millionaire marketer overnight. After all, I have heard the success stories of other distributors; so mine shouldn’t be an exception.

Unfortunately, I was dead wrong. Network marketing, like every other business is not easy. After I flopped and quit the business, I realized that there was nothing different when comparing network marketing to other businesses. I came to understand that the principles of business is the same; regardless of the type of business, economy or location. Building a successful business requires a process; it’s a process that occurs in phases and each phase can never be skipped.

So never fall for the hype of a push button system or a stress free business model because it doesn’t exist. There’s nothing like overnight success; you have to toil to make your own bed of roses.

2. Acquiring the basic knowledge of a business is the first prerequisite for starting a business successfully

I believe this lesson is clear. You will be foolish to jump into the waters of business with both feet; without first testing the waters and understanding the basics. Business is universal in principle but each industry has its own tactics and intricacies. If you fail to learn the basics, then you are failure bound and nothing can help you. Learning the basics of a business can be done by understudying business models in the industry of your choice; attending seminars, by apprenticeship, reading books, journals, and most importantly, by starting small.

3. Business revolves around people

The network marketing business, just like every other business revolves around people. To succeed in the network marketing business, you must invest in people; because people are your assets in the business. So if you are an introvert; then you might reconsider your decision to start a network marketing business.

4. Selling is your most important task in business

If you have listened or read the prospectus of a network marketing salesman, you will notice the following bulleted points: No selling, No stockpiling, No stress, Easy to run, No recruiting down lines, etc. Most people hate selling; and these people are easily attracted to ads and prospectus that screams “NO SELLING.” Unfortunately, selling is the most important task of an entrepreneur; and without it, no business will survive. In fact, selling is life.

So if you hate selling, then forget about starting a network marketing business. In fact, forget about even becoming an entrepreneur because you are only heading for the rocks.

5. Leadership skill is the second most important business skill

I wasn’t born a great leader. In fact, I hated anything that will put me in the fore front. While in school, I was an A student but I hated being identified or singled out. I hated leading; even when I know deep down in me that I am competent enough to handle such task. But my adventure as a network marketer changed my perception entirely. While in the network marketing industry, I saw first handedly the importance of leadership and unfortunately, it’s something you can’t run away from in the industry.

As an entrepreneur, you have to be at the fore front of your business. People don’t follow someone who doesn’t inspire confidence. Secondly, people don’t like being guided from behind; they want to be lead from the front. So despite my failure in network marketing, I never forgot the importance of leadership in business.

6. Failure is the greatest teacher; only if you are willing to learn

Failure is not bad. In fact, everybody fails at one time or the other but unfortunately; only few learn from their failures. Failure is the greatest teacher, but that’s only if you are willing to learn. Now how can you learn from your failures? You can learn from your failures by keeping an open mind and critically analyzing the process that lead to the failure. When you analyze your steps, you are bound to discover where you went wrong and this will help you avoid the same mistakes in the future.

In conclusion, I want to stress the point that my time in the network marketing industry was worthwhile. It gave me the opportunity to meet great men and women who started from scratch. Secondly, my journey in the network marketing industry helped me discover my weaknesses and prepared me for the challenges of the business world. So my failure wasn’t really failure; it was a learning process for me because with the experience gathered from my failure in the network marketing industry, I have become a better entrepreneur with a successful business to prove it. So don’t let failure stop you; instead, learn to make it a stepping stone and I will see you at the top.

How to Handle Business Failure and still Succeed

Have you experienced a business failure in the past? Are you currently experiencing business challenges? Are you on the verge of business failure? Are you afraid of starting a business because of the fear of failure? Do you fear failure? Do you see failure a sign of defeat? If your answer to any of these questions is yes; then please read on because I am about revealing the secret to handling business failures and making a success out of it.

"The business empires built by successful entrepreneurs were erected on the foundation of past failures." – Ajaero Tony Martins

I once wrote an article “50 Failure Quotes from 50 Successful People” and I backed it up by sharing with you stories of successful entrepreneurs that failed before hitting success. I have also shared my personal experience about how I failed and went to become successful. You can read about it below.

How to Start a Business from Scratch: My Entrepreneurial Journey so far

Please before I go on, I want to state categorically that I will not in anyway be highlighting the causes of business failures or how to avoid them. I have dealt with such topics extensively in the past. You can check them out below.

10 Causes of Business Failure You Must Watch Out For

12 Strong Reasons Why Small Businesses Fail

Recession Strategies: How your Small Business can Survive a Recession

15 Common Business Mistakes You Must Avoid When Building a Business from Scratch

10 Reasons Why You Will Never Build a Successful Business

In this article, I will strictly be sharing with you practical tips for bouncing back to success from failure. I will be telling how to handle business failures and make a success out of it. I have failed countless times and the steps explained below are exactly how I handle my failures. Though this article is strictly written for entrepreneurs and business owners; anybody can make use of its lessons. If you are prepared to learn, please read on.

Now how do you handle business failure? How do you recover from a business failure? Well, you are going to find out below.

How to Handle Business Failure and still Succeed

1. Be prepared to fail

In the article “How to Start a Business from Scratch: My Entrepreneurial Journey so far,” I shared four hard core business lessons I have learn; mind you that these business lessons were self learned (lessons from personal experience). My lesson one in that article was:

“The fastest way to build a successful business from scratch is to fail fast.” – Ajaero Tony Martins

And this lesson is the truth in its entire. The first and the best way to handle business failure is to prepare for it in advance. I know this sounds crazy but it’s probably the best strategy for handling business failure. Nobody wants to fail and that’s why majority end up becoming failures.

Everyday I come across budding entrepreneurs who are excited about their new fool proof business ideas. But what these entrepreneurs fail to understand is that business is a game of probability; where you have a 50 – 50 chance of either failing or succeeding.

And with business failure come emotional pain on the part of the entrepreneur. I have seen and heard of entrepreneurs committing suicide just because their business crumbled. When my mom lost her lucrative business to fire, I knew the amount of courage it took her to bear the loss and start all over again. At the site of the incident, a business man who couldn’t stand the sight of watching his sweat go up in flames attempted to jump into the fire. If not for the intervention of on-lookers, that man would have been history.

That’s exactly why you need to be prepared in advance for the D-day. Nobody prays for failure but if it comes; you just have to face it. That’s what makes you an experienced entrepreneur. Now how do you prepare in advance for business failure?

You prepare in advance to handle business failure by changing your perception towards failure. Just as my mentor “Robert Kiyosaki” says “No one is doomed to bad luck.” Sometimes, unplanned shit happens but I will rather prepare myself for it ahead of time than to carry the illusion that things will never go wrong.

“Things never go smoothly.” – Jeff Bezos

You can also prepare for business failure by giving your business your best shot, while expecting the worst. Expecting the worst may lead you to setting up a landing haven; which in this case will be a contingency plan. A pilot learning how to fly an airplane will never be allowed to practice without a parachute; so must you also never start a business without an escape plan.

A contingency plan is the reason why successful entrepreneurs start new businesses despite their failures; it’s the reason why I am still in the game of entrepreneurship. I have had successes and failures in business but that doesn’t still erase the odds. I might be back to square one tomorrow; but I am not afraid to lose it all because I have prepared my mindset to handle even the worst situation.

2. Don’t take failure personal

The message above is straight and precise. If you’ve been hit by a storm in business; don’t take it personal, it’s just life. Don’t go banging your head against the wall because you won’t solve anything that way. Don’t go criticizing yourself; don’t regret ever starting a business.

The fact that you failed in business doesn’t mean you are doomed to bad luck. It’s not your destiny to be a failure; failure and success is all about choice. Instead of talking down on yourself, cheer yourself up; you’ve just proved that you have the nerve to handle risk.

Starting a Business: It Takes More than Just an Idea

It takes guts to start a business and fail; and you’ve just built one and lost it. Most people will remain average because they lack such guts; they may die poor because they lack the courage to risk failure. Most people will never know what it feels like to lose a million dollar business and that’s why they will never build a billion dollar business.

3. Take responsibility

“Making mistakes is the privilege of the active. It is always the mediocre people who are negative, who spend their time proving that they are not wrong.” – Ingvar Kamprad

Taking responsibility for your actions is an essential ingredient to handling business failure and making a success out of it. Don’t go looking for whom to blame. If you were bad at cash flow management; admit it. If your business crumbled based on the decision you took or the business move you made; don’t deny it. Admit it and move on. Making mistakes is what makes us human.

"Only those who are asleep make no mistakes." – Ingvar Kamprad

4. Let your emotions flow

When you’ve lost a business; just let your emotions flow. Cry if you must and don’t feel bad about crying but I will prefer you do it in your closet. Don’t even think about hurting yourself because your predicament is just a phase that will come to pass. Allow your emotions flow because that moment of pain and tears will turn out to be one of your memorable and most inspiring moments in life.

5. Analyze the situation

Analyze the situation and circumstances surrounding your business failure. Where did you go wrong? What did you do wrong? What caused the failure? What would you have done to prevent the failure that you failed to do? These are the questions you should be answering at this point in time. If you don’t find definite answers to the questions; then you are bound to repeat the feat again.

You can also pick the pieces or leftovers of your failed business. They may prove useful in your next business venture.

6. Take note of the lessons

This is probably the most important element to converting your business failure into success. You will be a fool to lose a business and not learn from the experience. In fact, this experience may turn out to be a priceless asset in the long run. Yes, you’ve fail and there’s nothing you can do about it. One of the most important questions I always ask someone who has just lost a business, contract or an idea is this:

What did you learn from your failure?

If you can’t answer this question confidently; then more business failures await you. The lesson from your business failure is very important because it will form the foundation on which you will build a successful business. If you want to know how to turn your business failure into a learning opportunity; then read the article below.

How to Learn From Your Mistakes in Business

"Behind every adversity is an opportunity. If you lament over the adversity, you will miss the opportunity." – Ajaero Tony Martins

7. Resolve to succeed

"Get mocked at for as much as you can, fail as much as you can but don't quit. Let every mockery, every failure, be a source of inspiration for you to reach for greatness and that greatness will silence your critics." – Ajaero Tony Martins

You can either use your business failure as leverage to greater heights or as a spade to digging your grave. The choice is yours. Instead of being cowed by your failures; use your business failure as a stern resolve to succeed. Each time I fail; I resolute to strive harder and smarter to cover for my losses and failures. Failures don’t weigh me down; instead, failure inspires me to success. You should strive to use your failures positively.

“When I see a barrier, I cry and I curse, and then I get a ladder and climb over it.” – John Johnson

8. Start again

"Starting a business is like building a ship and embarking on a voyage, armed with a plan, a map and a team. You have to sail with uncertainty against storms and unpredictable weather. If your ship sinks, it's either you quit or you swim back to shore, build a new ship and sail again." – Ajaero Tony Martins

You have failed, cried your eyes out and learned some lessons. But the question now is: will you have the guts to start a business again? The word of God made me understand that the glory is not in the falling; but by rising each time we fall.

Just as I said earlier; “I am not afraid of failing, I am only afraid to quit the entrepreneurial process having come this far.” In the business world, you are not yet defeated until you quit the game. As long as you are still in the game; even if you are hanging by a finger, you can always start again.

"You can always quit, so why quit now." – Rich Dad

As a final note, this is my eight step guide to handling business failures. These are the exact steps I take whenever I fail to breakthrough in business. Before I draw the curtain close, I want you to know that failing in business is a painful experience; but it’s worth it if you go about it positively and make a success out of it.

How to Learn From Your Mistakes in Business

Mistakes in business is one of the most feared factors that discourage individuals from starting a business. I prefer to call it the “what if” factor. Many refuse to build a business because of this ‘what if’ factor. What if i lose my capital? What if i fail?

“Underneath every mistake in business is a valuable lesson. Unfortunately, many entrepreneurs miss these lessons because they lament and blame others over the mistakes.” – Ajaero Tony Martins

I will be using this medium to change your perception with respect to making mistakes in business. By the time you are through with reading this article, your eyes will be opened to see the good sides of mistakes.

Please i am not encouraging you to make stupid mistakes that could have been avoided initially. I am only encouraging you to reach beyond your limit without being held back by the fear of making mistakes.

“One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.” Rich Dad

If you are afraid of making mistakes in business, below are five points that’s going to change your perception towards mistakes:

1. In the course of building a business, always bear in mind that challenges and eventually some mistakes will pop up. Many people shy away from the game of entrepreneurship because they are afraid of failing. Failure and mistakes are part of life, the earlier you come to accept it, the better.

2. Human beings are designed to learn more by making mistakes. We learn more from our failures than our successes. For instance, as babies, we learn to walk by falling and trying again. We learn to ride a bike by falling, sustaining some injuries and trying again. Without making mistakes and falling, we will never learn how to walk. So also it is in business, without little mistakes, there will is no growth.

3. When it comes to building a business, you can never claim absolute knowledge of the business terrain of your industry. Sometimes, you just have to take risk and do something new, even if it means making a couple of mistakes. This reminds me of a quote from my mentor, Robert Kiyosaki:

“When you come to the boundary of what you know, it’s time to make some mistakes and learn something new.” – Rich Dad

This quote keeps me going when i come to the edge of what i know. Using myself as an instance, i have made mistakes in business that cost me a lot. I have made mistakes that made me cry. I have also made mistakes that had me regret ever starting a business; but did all these mistakes make me quit entrepreneurship?

The answer is no. I have come to realize that mistakes are part of a learning process; it’s what makes the game of entrepreneurship challenging and exciting. Mistakes are part of the process of building a business. They are great learning tools.

4. Mistakes make you stronger and smarter. Please note that mistakes will never make you stronger and smarter if you refuse to learn from it. Using myself as a case study, i have observed that whenever i make a mistake in business, i become sober and ask myself; what have i done wrong or what did i not do right? If i can’t figure it out, i ask my team where i have erred.

Once the point of mistake is figure out, i begin implementing corrective measures. The sweetest part is this; i always learn something valuable from every mistake i make; which i wouldn’t have learned if i hadn’t made such mistakes. Making mistakes, correcting them and quickly learning from them make me a smarter entrepreneur. According to Neils Bohr, mistakes qualify me to be a business mentor. I leave you with his quote:

“An expert is someone who has made and learned from every possible mistake in a narrow field.” – Neils Bohr

5. Successful entrepreneurs made a couple of big mistakes before hitting greatness. This means that if you are aiming for greatness, then you should be prepared to make big mistakes; mistakes that might earn you criticism. But always bear in mind that mistakes and failures are stepping stones of great men.

For instance, Robert Kiyosaki made a mistake by not legally protecting (patent and trademark) his nylon and Velcro wallet idea and this cost him his business. Did he quit? No. He learned from his mistakes and built a stronger business; the Rich Dad Company.

Thomas Edison made over a thousand mistakes before finally inventing the light bulb. Henry Ford made a mistake twice with respect to choosing a business partner and this lead to two business failures. Did he quit? No. He went on to become one of the richest men in the world.

Bill Gates team made a couple of mistakes with respect to product development but those mistakes didn’t stop them from dominating the software market. These instances should impact in you the fact that mistakes are regular occurrences in business. It’s up to you to make something positive out of them. It’s all about making lemonade when you are surrounded with lemons.

In conclusion, below are five action steps to take whenever you make mistakes in business:

1. Accept responsibility and don’t blame anyone. When you blame, you give power to someone else but when you accept responsibility, you will be forced to look into yourself and seek answers.

2. Analyze the situation and figure out where you or your team went wrong.

3. Look for corrective measures and implement them.

4. Take note of the lesson learned from the mistake. Like i said earlier, mistakes are learning tools. They are opportunities to acquire new knowledge so be sure to pick one or two lessons from every mistake made.

5. Promise yourself that you will never repeat the mistake again. If in the long run you repeat the mistake, it simply means you didn’t learn from the previous experience. Just like a popular saying that goes:

“Those who don’t study and learn from history are bound to repeat it.”

These are my five action steps to learning from your mistakes in business. I hope i have been able to pass a message across. No matter what you do, always bear in mind that mistakes are the stepping stones of great men.