Off the Rails: When Your Dream Business is Failing
In late 2017, my entrepreneurial roller coaster was not just taking exhilarating dips and turns, it was dangerously close to leaving the track. I was in crisis and my dream business was failing. I was in a state of confusion over what was happening and the thought of failure and bankruptcy had me paralyzed.
I am sharing this intensely personal story with my readers because I know I am not alone in my entrepreneurial journey and I hope the critical lessons I learned can be of some help to other entrepreneurs. The statistics about the failure rate of new businesses are real. According to Bloomberg, 8 out of 10 entrepreneurs who start a business fail within the first 18 months. I was very much at this crossroad.
When I started my new business in 2015, the idea of failure never entered my mind, not even for a second. The only thing on my mind was all the ways I would surely succeed. I hadn’t made any provision for a Plan B, much less create an Exit Plan if all indicators were pointing to disaster. I was naïve and unprepared and 18 months after launching my new business I was in a free fall.
Being forced to analyze and understand what was happening to my business was extremely painful. The more I uncovered how many factors I had overlooked in my original business plan, the worse I felt. My initial success had caused me to feel like I was totally on track and that my future was secure. I ignored the gradual warning signs that were telling me I was losing sight of my start up objectives and worst of all, I was at risk of losing my business.
With so many things to manage, I had started to lose my focus on what differentiated me and my services from my competitors. I was letting self- doubt creep in and I was starting to copy my competitor’s concepts and models over staying true to my brand. I wasn't communicating my value proposition in a clear, concise and compelling way and I was drowning in the sea of social media overwhelm.
I was starting to make poor decisions and had stopped listening to advice from my trusted advisors and mentors. The biggest oversight was that I wasn't having the dialogues with my customers that I needed to in order to make sure I was meeting and exceeding their needs. My profit margins were starting to shrink and I was spending more than I was making. I was in trouble and I had no contingency plan to resort to.
It took me some time to calm my panic and drown out the noise to hear what my gut was really telling me. I knew I needed to start with a fresh slate and plan a turnaround. I also knew that I couldn’t execute my turnaround plan in dream mode, I had to be realistic and make some tough decisions. My recovery plan required resilience, courage, humility and help from others. I was there.
Over a period of several weeks, I stopped trying to mirror and match my competitor’s brands and focused exclusively on my brand. I stopped trying to be all things to all clients and narrowed my service offerings to more specialized products that I had true expertise in. I reached out to my customers to ask them what they thought I was doing well and in what areas I could improve upon. I asked my advisors and mentors to help me vet my turnaround plan and this time I listened intently. Lastly, I created an Exit Plan. It is something I hope to never use, but I feel more responsible and confident knowing that I have one.
Today I am back on the entrepreneurial roller coaster and enjoying new successes. The difference this time is my roller coaster car is securely on the track. I feel grateful that I survived my first experience of becoming a statistic of yet another failed start up. I don’t take anything for granted anymore and I have a system in place that holds me accountable to my bottom line. I don’t know if I am stronger because of my experience but I do feel that I am wiser. If I can give you any advice if you find yourself in a similar situation to mine, make sure you have a Plan B and don't be afraid to ask for help.