Behind most successful ventures are a string of failed business attempts. It’s true. A person’s first grand idea rarely works out.
The key is to fail forward and learn from your mistakes.
That’s what Michael Norton, the author of today’s guest post, has learned. He’s actually got a half-dozen lessons that he’d like to share.
Michael, please tell us about who you are and what you do.
The remainder of this article was written by Micahel Norton of Funds Inc. I received no compensation for this post and have no financial relationship with the author.
I am an entrepreneur and internet marketing strategist with a BA in Marketing from the Full Sail University. Throughout the past years, I started several businesses. These ranged from a local restaurant to an international marketing firm. Not all of them succeeded, but I learned a multitude of valuable lessons in the process which help me work with a variety of clients.
I currently manage content marketing efforts for Funds Inc, a commercial financing broker firm based in Southfield, Michigan. We aim to empower entrepreneurs, startups, and small businesses with valuable information regarding their finances. We believe that easier access to it could help more of them thrive.
6 Lessons I Learned from Failed Business Attempts
When we look at wealthy entrepreneurs, we are impressed by their successes. However, what we don’t see or notice is what came before their victories. And that’s their failures.
We’re conditioned to fear failure and avoid it at all costs. It’s instilled upon us since childhood that we should always succeed and be the best. If we fail, we often perceive it as a sign that we should stop whatever that is that we’re doing.
When, in actuality, failure is just an indication that the approach we took wasn’t optimal. It doesn’t mean that we should stop. Instead, we should simply try again but with a different approach.
Years ago, when I started my first business, I had high hopes. I was dreaming of financial independence and stability.
Yet, it failed shortly after I had set it up. And so did a few others that came after.
But, instead of looking at these failures as indications that I should give up and go back to my day job, I chose to view them as lessons.
And, a few years later, I did indeed succeed in setting up a successful business that brought me closer to the financial independence that I was looking for. There are a few lessons that I learned from my failed business attempts before I was able to get to this point.
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1. Be Ready to Work More than You’ve Ever Had
You may have heard of or come across Tim Ferris’s 4-Hour Workweek. It’s a book that teaches you how to escape your 9-5, be wealthy, and live the lifestyle that you’ve always dreamed of. All that while working only 4 hours a week.
It may sound like an ultimate dream. Yet, for most people, it may be impossible. Especially during the first years of entrepreneurship.
There is a quote that says: “Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.” I found it to be particularly true.
I had to work harder than I’d ever had. Sometimes, it meant working over 80 hours a week or staying up all night to finish a project. I also sacrificed relationships, hobbies, vacations, and many other pleasures.
Yet, it was necessary. There are tons of people out there who just like you are looking for ways to gain profits on their own. But, when you are starting off, you likely won’t have the portfolio or the testimonials needed to prove that you deserve to be paid what you wish. Sometimes, you may even lack knowledge and skills.
It all comes with time, but you need to be ready to put in a lot of effort at the beginning. It won’t last forever, but it will get you ahead of everyone else who isn’t willing to do the same.
Keep in mind that it won’t always be like that. The sooner you get through the initial stage, the sooner you will be able to enjoy financial independence. It may not be a 4-hour workweek, but you will definitely be able to live more comfortably.
2. Establish Work-Life Balance and Take Care of Yourself
Working over 80 hours a week wasn’t easy. I’d wake up, get on my computer and work until I crashed. Sometimes, I’d even forget to eat or drink. However, I realized that it wasn’t going to be sustainable long-term.
It happened the hard way though. I burned out and needed to take a serious break.
When you are trying to establish a business and have a family to take care of, it’s not something that you want to happen. Clients won’t wait for you to recover. They need to get where they want to be, and, if you can’t help them, they’ll find someone else. And that can be disastrous for you.
Watch your diet. Getting a quick bite may save you some time, but if you aren’t fueling your body with proper nutrients, you may end up feeling sick or lack energy. Exercising is also a good idea. It will improve both your physical and mental state. It may even help you deal with stress and anxiety in a much better way.
Allow yourself some rest and downtime and spend some time with friends and family. It likely will be less than it used to be before, but it will help your psychological wellbeing. You don’t want to achieve your dreams and realize that you have no friends and your partner has left you because you didn’t spend enough time with them.
3. Don’t Hesitate to Hire Staff and Outsource Tasks
Hiring staff may seem counterproductive. Especially if you have limited profits and are barely able to sustain yourself. You may feel like you can do everything yourself.
Realistically, though, extra help can help you get ahead sooner and can even increase your profits over time. It can also help you deal with less pleasurable tasks while you focus your strengths on other aspects of the business that you enjoy more.
You can hire a permanent assistant or get help on an ad hoc basis. It will depend on your business model.
4. Learn to Be Comfortable with Financial Risks
Statistically, it takes a business on average 2 years to start seeing profits. And that doesn’t necessarily mean that you will be able to reap enough profits to live off of. In addition to that, one of the main reasons businesses fail is limited cash flow.
This makes saving crucial. However, to succeed and get ahead, you will need to get comfortable with financial risks.
The nature of these risks will depend on you and your business model. It can be putting money into advertising, developing a product, renting premises, taking out a loan, hiring staff, and more.
Yet, taking financial risks does not mean that you should be throwing money left and right. You need to be careful and do it wisely. Otherwise, you risk wasting large amounts of money and may even need to give up on your business efforts because of that.
Whatever financial risk you take, make sure that you inform yourself about it. Talk to an adviser, consultant, or financial specialist to ensure that you know exactly what you are doing.
5. Keep Your Personal and Business Finances Separate
You’ll notice that you will need to invest money back into your business. Yet, at the same time, you need to pay your bills and put food on your table. Both are important.
Nonetheless, when you start a business, it can be easy to miscalculate your spendings. You may also make mistakes that will cause you to lose money.
To make sure that you don’t miss a payment of rent or mortgage and don’t put your and your family’s livelihoods in danger, keep your personal and business finances separate.
You can open different bank accounts for each purpose. Though this will limit the funds that you will be able to put into your business, you won’t jeopardize other aspects of your life in the process.
6. Seek Mentors
Everyone you meet knows something that you don’t. And in the business world that’s particularly true.
There are different ways in which you can have a mentor. You may serve as an apprentice to someone or learn from a successful friend or family member.
But, if that’s not possible, you can also hire one. You may fear to do that because mentors and consultants can charge quite a lot. If you work with limited funds, this could be particularly daunting.
Yet, it can save you lots of time and money in the long run. A mentor can identify exactly what you are doing wrong and point you in the right direction.
I personally have sought the help of mentors numerous times throughout my entrepreneurial ventures. Sometimes, I paid even a thousand dollars to have someone help me to solve a business puzzle that I wasn’t able to solve on my own.
While it was a financial setback, I evolved in the process. It helped me make fast professional progress and serve my future clients a lot better.
As with any aspect of business and entrepreneurship, you also need to be careful about selecting your mentors. Don’t fall for the first appealing ad on social media. While mentorship can be crucial for your progress and success, you don’t want to fall victim to scam.
Once you take the path of entrepreneurship, you’ll notice that things won’t be easy. They won’t always go as planned and may not even work out. You’ll also notice that you will fail and learn repeatedly in the process.
Whenever that happens remind yourself to simply learn from your mistakes and move on. Often, the only thing you’ll need to keep going will be your mindset.
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Have you failed or succeeded in small business? What lessons did you learn from your mistakes? What was the key to your success?
2 thoughts on “6 Lessons I Learned from Failed Business Attempts”
Good tips. I would say 90% of success is due to point #1. Hard work can fix a lot of bad decisions. And with #2, I do NOT believe in work/life balance when starting a business. It’s a nice goal, but not really feasible/possible. But if your family can be on-board for 10 years of imbalance, lives and family trees can be changed forever. I personally believe it’s worth it. And you’ll have MUCH MORE balance later in life than others will, because of the sacrifices you made earlier.
My lawyer is fond of saying that every doctor has two failed business schemes and a nice house. I was ripped off twice: in both cases, I invested heavily with guys I knew, in areas I knew nothing about. Mistake one. And then, I trusted them to do their jobs and report results with integrity. Seven figure mistake two. In my current side hustle, commercial real estate, I’ve declined partners, monitor contractors carefully, and treat my tenants with respect like my patients. Doing ok.