Growing your business
How to Bounce Back From a Business Setback
When building a business, some will argue that you need to fail before you succeed - and in many cases, this is true However, whilst countless, valuable lessons can be learned along your journey, a business setback could can occasionally be catastrophic, resulting in a loss of revenue, a tarnished reputation, or the the need to restructure.
So, just in case, we’ve put together a few tips on how your business can bounce back and recover:
Change Your Attitude
Most businesses will be prepared for setbacks, especially when starting out. How you approach these setbacks, however, will determine how you recover from them. And learning this as early on as possible is key.
Julian Birkinshaw from London Business School says, “I have seen several companies adopt a zero-tolerance approach to failure – the person who failed gets fired, the failure gets swept under the carpet and everyone gets the message that this must not happen again. But this creates a fear culture. People follow the rules, whether they make sense or not, and no one dares try anything new. Not a recipe for success in today’s fast-moving business world.”
Although it can feel safer to shy away from what went wrong, being upfront and honest about what’s happened is often the best policy. And asking a few questions can also help you move forward and progress from your setback. These can include, ‘What have we learned about our customers?’ ‘What can this tell us about their needs and also their needs in the future?’ ‘How has the business dealt with this so far?’
So although these setbacks can be painful, always take as much as you can from them to improve for next time.
Being intuitive, you may sense when there is trouble ahead. If this is the case, reducing costs and saving money straight away could help cushion the fall of your setback.
If this isn’t possible, your cash flow could take the hit which is why, even in hard times, it's so important to keep an eye on what’s coming in and going out.
"SMEs have a tendency to be financially independent," says Dr Steve Priddy, head of research at the London School of Business and Finance. "They should make provisions for a 'rainy-day fund'."
Emergency funds have helped prevent many businesses going into debt. But what if you don't have one? In this case, businesses should prioritise their outgoings, for example making sure all the bills are paid first. Then it could be a case of getting a second income, re-prioritising expenses and cutting costs. Another option is to apply for a Business Cash Advance which could help you manage your cash flow flexibly - at an agreed upon percentage, matched to your cash flow - until you get back on your feet.
Seek Out Advice
During hard times, it could be well worth getting an outside perspective on your situation and allow you to look at things differently. A good way to do this is by finding a small group of people that you trust and wholeheartedly taking on their opinions and advice, even if you don’t like everything that you hear.
Emily Forbes, founder of Seenit, says, “I seriously vouch for building support groups, finding your ‘community’ or ‘tribe’, people you respect, trust and admire [who you are] able to be frank and open with and who also will be relatable in their feedback.”
Often you’ll be so deep into your business that you’re unable to see the bigger picture. Discussing problems with others can help you to gain more clarity when it comes to solutions, so never be afraid to ask for help.Try to select people from different industries and expertise to really give you a fresh insight into where you went wrong and how you can improve.
While setbacks can cause a lot of issues and undo months of hard work, it's important to remember that it doesn't mean the end of your business. In fact, with the right attitude and measures in place, these lessons can help you to bounce back stronger than ever!