That's a pretty inspirational quote from a well-known CEO, but if your business is dealing with a recent financial setback, it can be hard to take it to heart. Even a small setback can feel like a major failure, whether it's failing to get your pitch to investors just right or getting your business too far into debt. Here are some actions that entrepreneurs can take to overcome financial missteps.
Experiencing a setback can throw your goals off track. To minimize any damages to your business, you need to sit down and come up with a recovery plan, fast. If possible, you should work with a mentor or outside advisor who can provide honest, objective, and critical feedback. This will be difficult to hear but necessary, if you want to avoid repeating the same mistake. Take this opportunity to look at ways to organize your time differently, such as using online tools and recurring reminders. Make use of whatever resources you need to develop and execute your plan.
If you've recently suffered a business setback, you may want to take steps to protect your personal finances. One of the most effective and fastest ways to do so is to establish an LLC. This entity ensures your personal assets are safeguarded and your tax burden lowered. Before registering, be sure to confirm LLC requirements and steps in your state.
Many financial mistakes may leave small businesses struggling with debt. Often these businesses use a rolling line of credit, which can spiral out of control and destroy the business' net worth. Although debt is part of being a successful entrepreneur, how much and what sort of debt you take on can be critical for the longevity of your small business. Much like with personal finances, you will need to calculate your debt-to-income ratio and then cut costs to facilitate the reduction of these debts.
A good step to take when it comes to helping your business bounce back from debt and mistakes is to negotiate with your lenders and vendors. This can be pretty tough since doing so will require you to admit mistakes and ask for help. Remember, every business owner makes mistakes and failure is just part of success. Learning from mistakes is what's important.
Whether you're negotiating with vendors, pitching to potential lenders, or communicating with pertinent clients, transparency can also be important. Being transparent about your setback may elicit some anxiety, but doing so is the best way to protect your reputation and brand. Sometimes it may even be appropriate and worthwhile to be open about future challenges.
This tip is more about your personal recovery rather than helping your business bounce back. After a setback, you'll want to get to work on the steps above ASAP but you should also take a little time to process your emotions. Perhaps this means taking a weekend trip to unwind and reset or practicing some timewise self-care to relieve stress and refresh your brain.
Look, financial setbacks can be hard lessons. They can be embarrassing, stressful, and so difficult to overcome, but they don't have to mean giving up on your goals or your business. It cannot be stressed enough that in order to grow and thrive as an entrepreneur, you simply must experience failure and mistakes. If you're still feeling down and out, just take a look at these examples of folks who failed miserably but then went on to enjoy wild success in business.
The first rule of bouncing back from a financial setback: Don't be ashamed or embarrassed! After that, the next steps will be all about reorganizing your finances and revamping your overall plans to get your business back on track. In the middle of all that hard work, you also need to remember to protect your personal finances and take time for self-care.
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