Why Failure Can Spell Future Success for Your Small Business

Entrepreneurs don’t go into business to fail. Business owners, founders, and managers are focused on, and driven by, success. Failure is frowned upon in the world of enterprise, and especially in the Caribbean. In several countries across the region, there is limited protection from bankruptcy that may result from a failed business, as well as severe consequences and penalties, such as exclusion from certain careers and esteemed positions, accessing credit, securing contracts, and receiving various incentives and opportunities, which essentially diminishes any chances for future recovery. This severe punishment for the risk-taking entrepreneur is why failure is considered so shameful, in the Caribbean.

We must have greater respect for failure. It is not final, and can actually serve as a driver for innovation and growth. According to the World Bank, businesses in Latin America and the Caribbean that do not innovate and remain  small risk becoming obsolete or uncompetitive. The world’s most innovative and dynamic companies embrace failure as part of the creative process. Simply put, innovation requires experimentation and constant trial and error. Concepts sometimes fail, and it’s okay. In fact, each iteration of a promising product, service, or business model serves as the building blocks for future success. The key is to accept failure as part of the innovation process. For example, small businesses might want to consider the lean approach when developing new products and services.  In recognizing  that customer validation and acceptance typically  takes several cycles, it is prudent to keep costs down during the proof of concept phase. Budgeting for failures and allowing employees reasonable latitude to create and learn from multiple  attempts  should be included in business plans and where possible, company policy.

Failure also brings increased knowledge, skills, and business acumen to the organization, its leaders, and employees. When a business fails the entrepreneur understandably faces significant emotional distress; there are often financial and personal consequences as well. Once you can recognize the failure as a pillar of learning, and can as the same time, commit to applying the necessary corrective measures, the experience can provide the expertise required for building more resilient businesses. Personally and professionally, failure can build a strong knowledge base and strengthen character. One way companies can purposefully capitalize on failures is to record these experience and the lessons learned. The next step is to conduct a critical assessment of what went wrong; document the steps that can be taken to prevent avoidable and unconstructive mistakes, and use risk management to proactively manage uncertainties that can threaten future success.

The critical lesson in all of this is that failure can spell future success when we change our mindset around it, and take the time to be strategic and deliberate about applying the lessons it teaches.

Ajeet Khurana
Ajeet Khurana
Ajeet Khurana wears many hats: author, angel investor, mentor, TEDx speaker, steering committee of the NASSCOM Start-Up Warehouse, Director of Founder Institute, Venture Partner with the seed initiative of a top Venture Capital firm, and former CEO of IIT Bombay’s business incubator, among others. Before all this, he was entrepreneurial twice in the field of education and web publishing. As a lecturer at the University of Texas at Austin, he taught e-commerce back in 1993, when the term "e-commerce" had not yet been coined. An undergrad in computer engineering from the University of Mumbai, and an MBA from the University of Texas, Ajeet is presently an active name in the startup ecosystem. From starting two ventures as a solopreneur, to helping a large number of startups with their go-to-market, he has never shied from getting his hands dirty. At the same time he has helped dozens of startups raise investment. He truly believes that small business owners are driving change in the world, and need to be facilitated as much as possible. Innumerable small businesses have gained from his attitude, vast professional networks, financial acumen and digital mindset.

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