Part of what makes Great Britain great is its startups. To date, new startups in the UK emerge at a rate of 660,000 annually, which means roughly 70 new businesses are being put up every hour. While these are impressive and inspiring data, there are statistics about UK startups that almost no one speaks of: 60% of them will fold up within three years and 20% will close in only 12 months.
Your startup going under is a frightening and very real possibility, and if it does happen, what do you do? In this article, we offer a bit of advice as to what you can and should do (not necessarily in the order they appear), should your startup fail.
- Realize You’re Not Alone.
“How could this happen to me and my business?” — this is one question that some entrepreneurs ask when they can’t or refuse to see the writing on the wall, perhaps due to pride or a simple lack of knowledge. When you find yourself asking this question while staring at all the red on the balance sheet, ask yourself another: “How could this not happen, if one or more of these elements were present in me or my business?” Before you overthink this, take a deep breath and consider that you and your startup have become a statistic. Remember, you’re one of about 396,000 startups that might close after three years, or among the 132,000 that could fail after one year.
- Rest and Rejuvenate.
Once (most of) the dust has settled after your startup has been shuttered, you’ll likely be feeling irritable, and this is natural. If you were clocking 18-hour days and working on weekends at your startup, the sudden absence of work routine can be surreal. What should you do with all this free time now? Take a break. Read more books. Spend more time with your family. Hit the pub for the occasional pint with your mates. Go on that holiday you’ve had to put off. Do whatever you like as long as it helps you heal — and doesn't drain whatever savings you have left.
- Reassess and Decide.
After or during your breather, think about your next move. Will you dust off your CV and apply for a new job? Are you going to take a course or pursue a postgraduate degree? Will you join the academe and make a new career from teaching what you know? Perhaps you can try your hand at becoming a freelance consultant. Whatever your plans, make a decision and stick to it.
- Reconnect with Your Network.
Re-establish ties with former colleagues and friends. Sometimes, touching base with old friends or workmates can give you leads for new employment or business opportunities. You may also do this online with social media or your network on sites like LinkedIn. There’s no harm in going to conferences or other industry-related events, as long as they aren’t members-only affairs; these can be a good opportunity to expand your network.
- Revisit Your Mistakes.
After you’ve taken some time off, reconnected with friends, family and industry peers, this is a good time to revisit and dissect the mistakes that were made. Don’t view this as self-punishment or a blame-game, but as an objective assessment by which you can pinpoint what went wrong. Were you equipped with the right skills? Was the market research flawed? Did you get the right funding for your startup, such as an instrument that features SEIS loss relief? Did you partner up with the right people? Having an honest assessment, alone or with an “objective observer,” can help you gain insight on what went wrong, and provide you with the valuable know-how to avoid repeating these mistakes.
- Remain Optimistic.
It’s easy to become bitter and write the whole experience off as a bad chapter in your life or career. In the midst of this failure, remain humble. Admit the mistakes you made, and treasure them as valuable teachers. Resist the urge to blow the failure of your startup out of proportion, as doing so can prevent you from seeing it for the opportunity it might truly be. Remember there’s at least one successful CEO who habitually goes into businesses he knows nothing about but takes huge risks.
Make This Experience Your Springboard
As with many setbacks you encounter in business and life, failing in business is nothing to be ashamed of nor seen as an obstacle to trying again. Think of this as a temporary setback, even if it takes years for you to finally become successful in whatever endeavour you choose after closing your startup. This happens to many people, and many people have been known to bounce back to resounding success.