I have no idea what I’m doing. What if I fail?
It’s the most common thing I hear when talking to someone about selling a product, creating a new service or starting a business. As you likely know by now, sooner or later you’re going to experience a failure in your business.
While it might be a system breaking down, other times it’s more of a personal failure. Without bosses, co-workers or office politics to shield you all failures come back to you. It doesn’t matter if the failure was the result of a sub-contractor or if an external system went down losing all your client’s data. You will need to take responsibility and find solutions.
Rather than avoiding failure, plan for it. By recognizing and expecting mistakes, you’ll recover much faster. Here are three common business problems and how to handle them.
Work suddenly dries up
Although he’d been working on his own for several years, Josh Mishell started to think seriously about look for full-time employment as he went through a big dry spell, late in 2016. He’s always joked that he should shutter his design and marketing business, Fermentable Sugar LLC, and just buy a van and some supplies and start his own carpet cleaning business - there’s a definite objective right or wrong to carpet cleaning, as opposed to the subjective grey areas that creatives regularly face with their clients.
But as the weeks went by, he started considering full-time employment more seriously. In a bid to explore this avenue, he asked the owner of a very respected graphic design agency about how to tailor his resume and portfolio to get a job at similar types of companies. Instead of feedback, the owner sent him two quality referrals for clients they didn’t have the bandwidth to take on. It jumpstarted Josh's business and he started feeling more confident.
One of the things that helped Josh recover from his slump was “to meet everyone you can, and to ask for advice. We all do things differently and have different pain points in our businesses. We all have different ways to fix our issues, many different viewpoints, and solutions. Never stop asking questions.” He also recommends that when you have money coming in, save as much as you can for when things slow down.
How to recover from a dry spell
- Don’t let it take you by surprise. Know that it will happen. I know, I said it was going to happen and yet also called it a business failure. Even though it’s bound to happen at some point, when it happens, it feels like a horrible failure. Losing income and fearing you won’t be able to pay your bills can feel not only like a failure, but a form of rejection. Maybe you have a dry spell because prospects rejected you in favor of other solutions. Rejection happens to everyone. I mean everyone. Even U2 faced rejection. When you earn how to get good at rejection, (or at least better at it) the sting hurts much less so you can get back up on your feet faster.
- Plan for the income instability that accompanies working for yourself. When you anticipate it, you’ll be less likely to let it get you down — and, get into action faster.
- Diversify your client base. When he went out on his own out of necessity, Dan was working hard to pay off his debt rather than building up his buffer. Things were going fine until he lost his biggest client, leaving him with just 20% of his revenue and a pile of bills. Luckily he was able to pick up a new client within a month, squelching the financial damage but after that he vowed to diversify his income. If you only have one client, or a big one that constitutes more than 50% of your income, be wary. Unless you have a long runway (more than 6 months), you’ll feel beholden to them and be left in a bad spot if they suddenly take away their business.
By the way, I know this is hard when you have no or little work and you feel like you have to take whatever you can get. If you absolutely must take a big client to get you through, cut back on every non-fixed expense, so you can pack away the money. At the same time, begin looking for other clients.
You have a public business failure
Adam Calihman co-founded a startup that was highly dependent on government spending. Having a single client with highly volatile funding left the startup vulnerable when it dried up. Eventually, everyone but Adam’s co-founder lost their job. After more than a decade building a startup, pouring all of his life savings into it to keep it going, Adam found himself broke and without income. On top of that, his friends and family lost their investments, amplifying the feeling of failure. “I botched their investment, and let down everyone who trusted me.” It was a profoundly depressing time for Adam.
Given his dire financial situation, Adam had to focus on creating the next act in his career. Adam began to move on from the feelings of failure to create a new future for himself. Transitioning to working for himself as a business of one and bringing in income for his family helped. Along the way, he learned an even bigger lesson about overcoming failure:
“You have a picture of who you are and the trajectory you’re on. There is a tendency to focus on the way people look at you when you go through something like this. Rewriting this perception is critical. You have to realize that it doesn’t matter how others see you. It’s about being comfortable with yourself no matter who you are.”
How to move on from public defeat
- Don’t let your business define you. This goes for both the success and the failures. When you hang your self-worth on your business, it’s going to take a nose-dive when you encounter difficulties. I’ve done this myself so it's a hard-won lesson. One way to make sure your business isn’t everything is to have things outside of your work. Spending time with family and doing things like exercise are good. You might also want to include side projects or hobbies where you’re learning something new. For instance, I’ve been learning to make kombucha. Maybe it’s a fun bot that tweets quotes from The Hobbit. Having meaningful hobbies and side projects outside your business allows your identity to be more multi-faceted which means it’s less likely to take failure quite as hard.
- Know that everyone is egotistical. Being aware of the spotlight effect can help calm your anxiety so you can focus on moving forward, not looking back. The spotlight effect highlights our tendency to overestimate how much attention others give us. Everyone is not looking at you thinking, “What a loser! What a failure!” Your situation is just a tiny blip on their day. And, that blip might actually have much more good will in it than you think. Plenty of people will feel bad for you, rather than judge you.
- Get busy so you’re too busy to dwell on negative feelings. Distraction can really come in handy when it comes to getting over a big failure, especially when it’s so public. It’s tempting to take heaps of time off after a loss. While a few weeks might be warranted, there is such a thing as too much time. Sitting around can give you too much time to think about what went wrong. Rather than clearing your entire schedule, put more into it.
Your product doesn’t sell
In 2005 I heard about this idea of having passive income, rather than having to trade some sort of dollar amount based on time. Intrigued and looking forward to an additional income stream, I decided to create my first product. I spent a year writing an ebook. I researched my topic thoroughly, collected stories through interviews with dozens of people and spent hours crafting step-by-step instructions. Although there was a publisher interested, ultimately they passed because I didn’t a big enough audience. Lured by the idea of income while I sleep, I continued with the project, deciding to self-publish it.
The book didn’t sell well. Though I hadn’t counted on it paying my bills, I was disappointed to spend all that time on something for little return. And, I was a little embarrassed when well-meaning friends and industry colleagues asked about how well it was selling. At the time social media and other forms of marketing still in their infancy so building a strong email list and growing a big following was much harder. Still, I made a few common mistakes.
How to have a successful product launch
This kind of failure can often be prevented by preparation and thoughtful strategy so these tips focus on being proactive, rather than reactive.
- Focus on a problem, not your skills
Despite being a little too ahead of the game, the bigger problem was that I didn’t cater my content to a particular group of people with a real problem. I focused on my skills, not solving a problem. Focusing on your skills means you focus on what you know, rather than on what others need to know. We often think they’re the same thing except they’re not — at all. People don’t pay you for your knowledge — they want a solution to a troubling issue.
- Don’t underestimate the effort business efforts take. Passive income is actually a bad name for this kind of revenue. It takes tremendous amount of effort creating the product and, just as much or even more time to position, market and promote it. The effort of promoting your product is often neglected or done hurriedly at the end. Before embarking on a project like this, understand that it's not really passive income and, that your "hourly" rate will likely be much lower than what you charge for your services.
- Don’t bet the farm on it. A really good product can make a business — sometimes. Honestly though, it’s rare to have a big hit right out of the self-publishing gate that provides you with enough income on its own. You see stories of success all over the place. Astronomical success with someone's first product. Rarely do you see the stories of failure. But unless you're Nathan Barry and have a well-organized launch plan you might be one of those stories like I was. Without a well-honed marketing system, even successful launches often don’t give you the return you want, especially in the beginning. Don't bet everything on it, but do educate yourself on how to give yourself the best chance for success.
One more thing.
When I was a kid, failure was really tough for me. Insults hurled at me on the playground or a bad grade on a test haunted me. As I wailed that my life was over my dad would always remind me, "This too shall pass." It's something I took with me when I first started a freelance business. As a solopreneur, remembering that failure and hard times aren't forever helps them pass much easier.