African Entrepreneur With Feyi Olunuga: What Comes After Business Failure?

“Failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end. Failure is something we can avoid only by saying nothing, doing nothing, and being nothing.” – Denis Waitley.

To understand how to tackle failure in business, you have to get to know failure. Don’t avoid it, don’t be afraid of it. Face failure head on; know that failure has something to offer and be determined to get it.

Failure in business takes various forms. It can be a product failure – as we have seen with the recent recall of the Samsung Galaxy Note 7. This wiped $20 billion dollars off Samsung’s market value in the US in one day. Failure can have a devastating effect on a company’s finances, as well as her reputation.
Another form of failure is when a business encounters market failure. This happens when the expected or projected sales figure is not met.

Failure can be external, internal and very subjective. Parameters for success on the other hand are mostly predetermined by external influences. For instance: How many hits did your website get this week? What was your turnover last year? How many followers do you have? How many outlets do you have? You are responsible for setting your business objectives and goals therefore, you are responsible for defining what success or failure means to your business. Failure is a reality in business. Though it may not be publicized or celebrated; but out of failure has come some of the best innovations. Apple’s computer Lisa was launched in 1983 and was a huge failure by most accounts but that did not stop or kill Apple. In other words to get the best out of failure, you have to confront it head on and take control of what comes next.

Failure occurs when a product or service does not meet an expectation that is, expectation of the buyer, the manufacturer, or the end user.

Here are some questions to ask:
Was your expectation realistic? Why wasn’t your expectation met? What must be changed to meet this expectation? These steps bring to focus your next course of action. Business decisions are often driven by assumptions that are sometimes not backed by research data. In answering these questions you might discover that your assumptions were wrong; if your assumptions are wrong, your decisions will be flawed. For example, you launch a gift-wrapping store in a shopping mall and assume that 10% of the 2000 people that daily visit the mall will be your customers daily. There is a risk of failure if you don’t confirm this with research before basing your financial projections on this. One way you can do this is to set up a stand in the Mall for one week and see what the consumer response is. This can be a great way to get feedback for your product or service before investing in a store in the mall.

Entrepreneurs are faced daily with the reality of limited resources. In the seed and start-up stages it often seems like there simply isn’t enough money to do half of the things you want to do. The truth is that there will always be limited resources, even when your business grows and it is thriving, there will be multiple competing needs for every resource you have. Looking from the outside, it may seem that older successful companies don’t have this problem, they actually do. The difference is, with experience these companies have learnt from their mistakes and have become better decision makers. Where are we going with this? A common mistake we make is compromising on quality (competence) to save cost. I accept that managing costs is essential, but as an entrepreneur you have to know the areas of your product development and service delivery you absolutely cannot compromise with low quality.

You have to define what quality – in product and in service – you want to develop and take to market. For instance, if I want to launch a website and I need to employ a website developer, I have many options. If I decide to compromise on quality to save cost, it will affect the end product. If you cannot afford the quality you require, you should consider getting a technical partner because 50% of something great is better than 100% of mediocre business existence.

Failure to plan is planning to fail; this is a common saying and it is true. Your plan after failure is very crucial. Investigate what went wrong and establish what you need to deliver an updated product then plan. In other words, review your previous assumptions – both wrong and right – and update them. Then, move on to setting new parameters for evaluating your product or service before you launch. This will also guide ongoing review of product performance post launch. Leave no stone unturned. Consider every aspect of your product delivery: manufacturing, marketing, finance, customer service, distribution and everything else that is applicable to your business. Before you launch your product, send a sample to you biggest critics to test and review. This is bold move – but so are all comebacks. Learn to take criticism well and act on it.

Are you ready to get back up? Yes! There is one more thing to do. In business, a consequence of failure that is often neglected is the impact it has on the team. As an entrepreneur, you business is your ‘baby’; when things go wrong there is a tendency to internalise the disappointment. When you have a team around you, it is so important to keep them motivated. Failure can destabilize demotivate and disorganize a good team. However, your reaction to it and what comes next can bring your team together and set them on a unifying course to fix and come back stronger. How do you do this? Keep the communication lines open; let them feel free to express their opinions on what went wrong. Lead, define the next step for the business and let them be part of building the new plan. The fact is, failure occurs multiple times in business – becoming mastered at handling failure is an indispensable skill for successful entrepreneurs. In all this, remain vision focused but market intelligent. Consistently strive for perfection but be prepared for evolution.