Right now, all types of business – from restaurants, cafes and media companies to airlines and hotels – are on the brink of failure. Many will unfortunately fail. Some will try innovative solutions to bypass the crisis, and some will even prosper, but many great businesses will simply no longer be there. If you’re wondering how to deal with your business failing, hopefully this will help.
Having a business fail can feel like a death in the family. There is certainly a sort of grieving period, as “the baby” you had put so much time and effort into becomes unviable. I know, because I’ve had businesses fail. I’ve also worked in plenty of restaurants that have gone under and seen the effect it has on owners, staff and customers.
The main issue is the disproportionate amount of effort that goes into creating a business (having a freelance career that drops off is similar, too). Family and friends often get sidelined, you pull the late nights, you max out the credit cards. You teeter on the brink at times, but keep the balls in the air. A business can be an obsession, a life’s work. Something that you dreamt up and still can’t believe it’s real. But then, disaster strikes…
Dealing With the Business Impact of the Coronavirus
For many entrepreneurs, up until three weeks ago their business and career might even have been thriving. Breaking records. All smooth. Projections done and targets on track. And then boom. The perfect storm of no customers, dwindling revenue and high costs after a decade-long economic wave.
I know there are people sitting around the world biting their nails out. I’ve talked to some of them, and it is gut wrenching. Especially the small one or two man bands. It hardly offers much consolation, but there are tens of millions of people in the same boat. Yes, everybody is worried. Everybody is shitting themselves. Everybody is nervously looking at their bank account. Of course everybody is wondering if a customer will be willing to pay.
Having a business fail is psychologically draining. The thing you screamed from the rooftops about to friends and family. Just like that – gone. It can feel like your world has completely collapsed and fallen in. You’ll worry that many people will think you are a failure, and laugh at you for even trying.
So, What Next? The Positive Things You Can Expect
There is good news out there. It might not come in the form of a virus vaccine or a re-emergence of customers tomorrow, but it comes in the form of cathartic things that happen after failure. These won’t happen in every single case, but from my experience of a business failing, you can count on the following….
- Friend and family support: Although you may have neglected your loved ones as you built the business, they are the first ones there for you. The safety net. They seem to have an innate sense of your emotional frailty and will rally around you.
- You’ll get a second chance: The world seems bad right now, but it won’t stop spinning. Just like some of the greatest boxers who have got knocked out only to come back stronger and regain their titles, so will you. It might take a while and it might not feel like it, but you will be back.
- Even the very best fail: The most famous example of this is Steve Jobs getting sacked at Apple, before coming back to create the most valuable company in the world.
- You’ll learn a lot: That’s tough to say now sitting there looking at numbers that don’t add up. But, failure will teach you more than you could ever imagine. You might hoard more cash in the future for a rainy day. You might grow slower. The things you learn from failure take time to crystallise but they will come.
Things to Watch Out For…
At such a traumatic time, there are key things to watch for and make sure not to let fester. From experience these might include:
- Burying your head in the sand: The chances are, the place won’t be packed in April. The big bounce back won’t come quick enough. Cutting costs is the hardest thing to do in a business you built up, but you have to take cold hard action.
- Escapism: Big problems obviously increase stress. Be careful in this time with alcohol, drugs, or whatever your personal vice is.
- Your own ego: So many people drag a business on too long that is failing based on ego. The fear of being seen to fail is what keeps them trying every solution, even though the facts are clear.
- Cash: It doesn’t really come down to much more than that. Not what people owe you (that might never be seen) but real, hard cash you have eyes on. It seems obvious, but running out of cash is the only worry. Hoard it, protect and try and somehow find more of it.
Emotionally, having a business fail is incredibly tough. It’s up there with losing a loved one, a divorce or a house. It’s one of the biggies and the weight of your staff and possibly others you support, like suppliers and families, are on your shoulders.
After my first failed business over a decade ago, I didn’t go out for three months. I stayed on too long, when deep down I knew the thing was doomed. Basically, I didn’t want to let anybody down. I tried pivoting. It didn’t work. I drank and smoked nightly with stress.
After hiding from the world for some time, I summoned up the courage to go to the pub. I presumed people would be sniggering, but all I got was back slaps and pints bought for me. Within five minutes the conversation had moved on to football or something else trivial. You’ll need some of the same medicine and hopefully take it quicker than I did.
Even if a business fails, 99% of us will still be able to put food on the table. For those who can’t, those of us who can help out and local governments need to rally around. I’m confident that is happening right now, and will continue to happen.
Ask For Advice & Keep Things in Perspective
People all over the world are losing loved ones; health is way more important. The two seem intertwined at the moment, but health really is your wealth. It might seem like your world has crumbled right now, but give it a few months or years and you could look at this moment with a very different perspective.
Talk to people. Ask any experienced business person and I assure you they will take time out of their day to help you. They might not be in a great position themselves, but find someone who will have seen similar situations. Advice can be critical at moments like this.
Reach out to people. The vast majority of business people are in the very same boat right now, and it’s sinking. But pull together and you might just be able to keep it afloat.