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Quick guide: Overcoming setbacks in small business

It’s not about how many times you get knocked down, it’s about how many times you get back up. Read this guide on overcoming challenges and setbacks entrepreneurs face.

Anyone who’s considered entrepreneurship has seen the stats: A third of small businesses fail within two years, and only half make it to year five. Just 6 percent of American businesses are driving 50 percent of the country’s profits. And Americans are grappling with more than $1 trillion in student debt, which often holds them back from starting businesses. The deck seems stacked against entrepreneurs.

These obstacles, however, aren’t insurmountable. While starting a business and driving its progress is challenging, it’s also an amazing adventure worth experiencing. I promise you this: Chances are high that you won’t achieve tremendous success right out of the gate. Chances are also high that if you don’t give up and you consistently find ways to overcome the barriers, you’ll encounter success at some point.

I recently talked to my friend John Rampton about his experience in having to shut down a company years ago that was doing upwards of $100 million in revenue. Dealing with that failure was a blow to his confidence, and it was a grueling short-term distraction. He was able to bounce back, however, and started, a payments company for small businesses, and a convenient calendar application.

As the old adage goes, it’s not about how many times you get knocked down; it’s about how many times you get back up. Here are three steps for overcoming failure so you can get back up and achieve your entrepreneurial dreams:

 

1. Develop a solutions-oriented mindset to put yourself in a better position

It’s easy to point fingers and get frustrated after a failure. It’s a natural feeling, but unfortunately, it will get you absolutely nowhere. Determine which next step will put you in a better position or move you forward.

Many successful entrepreneurs have failed numerous times. Look at Elon Musk’s SpaceX – the company repeatedly failed at landing a rocket and then recently had success (twice!). During a recent keynote, somebody asked me what my favorite movie over the past year or two was. I responded with The Martian; Matt Damon’s character had every problem on Earth (or Mars), and he maintained a positive attitude, thinking, “What’s going to keep me going?”

I love this quote from the movie: “I guarantee you that at some point, everything is gonna go south on you. And you’re gonna say, ‘This is it. This is how I end.’ Now, you can either accept that…or you can get to work.” I think the same mindset applies to how entrepreneurs view and react to failure.

 

2. Learn from mistakes so they don’t happen again

Years ago, when I first got into real estate, I made a nearly $50,000 mistake by just making a stupid decision and choosing the wrong vendor. However, as that business grew a lot bigger, there were larger-dollar amounts that were affected by the vendors I chose.

That gut-wrenching loss of $50,000 was actually a very valuable error: I never made the same mistake again, and I put together a very clear process for selecting vendors in a more rational and calculated way. Be deliberate about taking a step back after a failure to embrace the lessons embedded in the mistake. That $50,000 mistake has probably saved me 10 times that, so it was – in its own, weird way – a good investment. 

 

3. Surround yourself with people who will fight for you

Rebounding from failure or a bigger challenge can be hard by yourself. You’re second-guessing your own instincts and questioning your own ability to find the way forward. After all, you are the one who got yourself into this mess.

However, if you’re surrounded by a solid team, recovering from failure becomes a lot more manageable. Some of the challenges we faced in Influence & Co.’s early years were rough, but my co-founder always had a positive attitude and was ready to roll up her sleeves and tackle problems with me. Working with people who are invested in your success and who can do their part to share some of your burden are more valuable than any other aspect of your business.

Whether you’re building your team from scratch or curating your current leadership team, you have to put a high value on these people. When you need them the most, their value will be priceless.

And enduring failure together breeds a stronger company. When your teammates build more diverse skill sets and help execute your strategy for recovery, everyone benefits: you, your co-workers and your company.

The numbers entrepreneurs face may seem intimidating, but it’s more important to look at what’s hiding behind the numbers. It’s been widely reported, for example, that Bloomberg found that 80 percent of small businesses fail within a year and a half. But Bloomberg never published anything of the sort. It’s just one of those terrifying numbers that conveniently sounds official.

Overcoming entrepreneurial obstacles is similar: What small business owners face on the surface is rarely the full, or only, story. Rather than wallow in the setbacks you encounter, develop resilience by seeking solutions, learning the lessons and surrounding yourself with the right people. Doing these things will ensure you keep getting up. Pretty soon, nothing will be able to keep you down.