Nic Haralambous is a business coach, consultant and host of the It's Not Over podcast, where he chats to business owners about their stories of success, survival and failure.
Failure is such an integral part of building a business, but it's also the scariest part. We strive for success and are taught from a young age that if we fail, we are failures. Yet I've never met a successful entrepreneur who's afraid of failure. Avoiding failure isn't a viable strategy – your business needs to figure out how to embrace failure, mitigate the impact and integrate the lessons learned into your core DNA.
There are lots of reasons that businesses fail. Some are common, like cash-flow mismanagement and not selling often enough to the right customers. It may sound stupidly obvious, but if you're struggling to pay bills every month, then you probably have a sales problem. Many business owners think that launching a new feature is a solution to slow sales. It's not. New features and products – or anything new – are only a Band-Aid on a bullet wound. Bite that bullet and do the hard thing: get out there and sell.
If you have a great product, a great sales team and fantastic marketing, but you still struggle to make the kind of sales you need, you're probably talking to the wrong customer. At my fashion company, Nic Harry, we make fun, colorful and expensive bamboo socks. I spent years trying to sell those socks to trendy hipsters, but my market turned out to be business people working in corporate jobs trying to show a bit of flair. The right customer can change the trajectory of your business in an instant.
Too often I coach new business owners that have spent months, if not years, building the ‘perfect’ product, plowing every last cent into the launch and then being destroyed because they missed the mark. Either they didn't figure out who their exact customer was or they pegged their hopes on that one perfect big swing to make their mark.
One big experiment more often than not leads to one big failure. To avoid catastrophic failure, reframe experiments as small and frequent opportunities to learn about your business and your customer. Take smaller risks more often, record the results and then iterate with your next experiment.
Building a culture of experimentation into your business helps your team understand that they can work on big problems but solve them in small ways that provide frequent feedback loops. Founders of small businesses are mostly talented and high-energy individuals. They also probably have a bit of an ego because they're good at a lot of things. The combination of talent and ego tricks you into thinking you don't need help and that you can do everything better than anyone else. You can't.
Trust me, you're doing too much, too often. Pick your priorities and focus on what you're the best at. Everything else can be the next priority, or handed off to someone else to focus on. An inability to delegate is one of the biggest issues that founders of small businesses face. Don't be a hero. You have a team, so let them in and let them help you grow – that way, you can all avoid failure together.
This article was first published in Courier issue 45, February/March 2022. To purchase the issue or become a subscriber, head to our webshop.