Bounce Back From Financial Loss (And Protect Your Entrepreneurial Spirit)

by Ty Freyvogel

One of the less desirable aspects of entrepreneurship is the possibility that your business may experience great financial loss. In fact, it may fail altogether. Although this fate probably won't befall you if you have done your research, it is always a good idea to know that it can happen. The old adage "expect the best but prepare for the worst" is a good philosophy for businesspeople. Knowing that failure isn't out of the realm of possibility makes it more likely that a setback won't crush your entrepreneurial spirit.

Should financial loss or collapse befall your company, take heart in the effervescent nature of entrepreneurism.  For men and women who have the entrepreneur bug, new opportunities are always bubbling up. The business game, much like the game of life itself, offers many second chances.

If your business stumbles upon hard times, you may find it tough to pick yourself up and start over. Some people never recover from a business loss, but I've had my ups and downs and I can assure you that it is very possible to bounce back from a failure.

Stay in the Game
Following a business failure, you have two choices: give up entrepreneurism or find a way to reinvent yourself. I've always found a way to stay in the game, whether it was continuing my business in another form or under a different name, or moving on to an entirely new business. One approach I've used is to look at the parts of my business that were successful, ditch the parts that were failing, and re-conceptualize my business. My first venture, telecommunications consulting, is based in an industry that changes continuously. I've had to adapt constantly and the business that I own today is vastly different than the one that I started. But I'm still in the business and it's still profitable.

Keep "Failure" in Perspective
A wise person once said that you have only failed if you fail to learn the lesson your trials posed.  As a matter of fact, I only use the term "failure" because it is the standardized word our society uses to describe unexpected and un-ideal outcomes. Though losing a great amount of money may make you feel like a big time...well, loser, you need to look at the big picture. Your life won't end today just because all was lost on a project you believed in. There will be other opportunities, other investors, and other ideas when the time is right. It is hard to look at a bad situation in a positive light, but it is necessary and healthy.

Remember, the most successful entrepreneurs are optimists! Join them and view your bump in the road as nothing more than a temporary setback in your winding journey through the business world. Look at entrepreneurship as a process rather than an end in itself. Most entrepreneurs see themselves doing this for the rest of their lives. As for "risk," the only way to fail is to quit before you succeed. You may lose money, but you will only be a loser if you quit.

Look Before You Leap
Most entrepreneurs have a powerful drive to succeed and a strong temptation to dive back in after a big loss. But, while I think you have to stay in the game, you also have to be careful to not act so hastily that you make another mistake. Why? Because the typical entrepreneur tends to have his self-worth all wrapped up in the fortunes (or lack thereof) of his company. Therefore he is eager to "prove himself" worthy and intelligent once again.  Being aware of this tendency can save you from another failure. (And I've had more than one in my day!) Take the time to analyze why and how the business failure happened.  I don't need to tell you that the reason most companies fail usually involves money.  If your cash flow was unsteady, for example, you probably ended up a day late and a dollar short on more than one occasion before you finally had to fold.  Look back and see if hindsight will help you spot the warning signs that you couldn't identify at the time.  Learn your lesson well.  In your upcoming projects, you will know to stay on top of the cash-flow analysis and keep things running smoothly.

Stay Optimistic and Be Persistent
Don't ever assume that one, two, or even three setbacks means that you are destined to fail as an entrepreneur.  Sometimes you have to learn the wrong way to do something before you can identify the right way!  Think about Thomas Edison's famous light bulb quote: "I was glad I found 9000 ways not to invent the light bulb!" Resiliency is the greatest quality an entrepreneur can possess.  It will redeem you when others walk away, convinced that they are better suited as an employee in a cubicle.  Unexpected let downs are an unfortunate reality in the business world, but just because you experience a run of bad luck or bad planning, you don't have to accept defeat and retreat!  You can indeed look failure in the eye and go on to be a success. Do some honest soul-searching.  If you still have ideas that you believe in, and feel excited and passionate about your future, you can still make a new dream come true. You don't know your limit unless you fall and splatter. If you see the world this way, there is no loss of self-esteem when you fail (only a temporary setback) and you always learn more by evaluating why you fall.

When you decide to be an entrepreneur, you are accepting the fact that there are going to be many ups and downs. The only way to be successful is to greet the downs as part of the job. If you are persistent and steadfast, you will find success. Just remember: Never give up until you succeed (or at least until you redefine "victory")!

Did you enjoy this article?
Then you'll love Ty's book Smarts, Guts, and Luck: Straight Talk for Entrepreneurs. It's a "must-read" for anyone either thinking of starting a new business or anyone already running a small enterprise.

Smarts, Guts and Luck features 25 chapters brimming with tips, insights and sound advice. Find out why Cindy Potts of The Retailer's Advantage says "Ty Freyvogel has a formula: 1/3 Smarts, 1/3 Guts, and 1/3 Luck add up to exactly what you need to make it as an independent business owner. In a short gem of a book, Freyvogel delivers countless secrets for success, ranging from developing one's intuition to recruiting the ideal employee and balancing life and work. There's a lot of powerful advice in here that speaks directly to the reality of being an independent business owner."

Looking to Start a Business? You Can’t Afford to Make Mistakes!

Now with the Virtual Incubator Network at your disposal you can get all of the help you need to launch your business quickly and with confidence! The Virtual Incubator Coaching Network updates this proven business development concept for the 21st century. You provide the space and we give you all the advice, training, coaching and support services you need to successfully launch your business ... all under the guidance of an authorized Virtual Incubator coach. As a member of this dynamic network I now have the opportunity to combine my 35+ years of entrepreneurial experience with a proven success system!

With the Virtual Incubator you receive …

An easy-to-follow step-by-step business-planning process that helps you reach key decisions and complete organizational tasks in a timely fashion (as little as 12 weeks). Professional help with certain tasks, such as graphic design and copywriting. Friendly, experienced support from a qualified start-up coach and expert staff. Substantial cost-savings from proven tips and negotiated service fees. A proven process used by more than 4,000 entrepreneurs. A structured plan designed to help you create a low-cost, high-profit business, run professionally and expertly.

For more information on the Virtual Incubator program and how you can get your business of to a fast start,
please visit boomerbizstartup.com.