It’s not uncommon for a business to fail. According to data from the Bureau of Labor Statistics, about 20% of small businesses fail within their first year, and that number only grows each year that follows. If your business is one of these, the important thing to remember is that you, as a person, are not a failure.
As a matter of fact, success and failure go hand in hand in the business world. If you think of any successful entrepreneur, they’ll likely attribute their success to the bumps in the road that got them there. While it might be hard to picture it now, this is simply one step in your journey to success.
A quote, often attributed to Thomas Edison, says, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”
Don’t let this failure stop you from achieving great success. Instead, dust yourself off and get back on track with these helpful steps to prepare for your next opportunity. It might just be right around the corner.
The first and most vital step is changing your mindset on failure. While most people understandably avoid failure, a willingness to risk it can be incredibly rewarding. Failure is one of life’s greatest learning tools and can teach you unique lessons on your business approach in the future.
Take some time to reflect on this experience and write down the three biggest lessons that you can learn. Make sure to separate yourself from the failure and look at the business from a broader perspective. For example, examine your business’s structure, finances, or marketing, and ask yourself what you would do differently next time. This can serve as a guide for when your next opportunity presents itself.
Bill Gates, the co-founder of Microsoft, once said, “It’s fine to celebrate success, but it is more important to heed the lessons of failure.”
Taking the time to think about what you can take away from this moment can help you come back better and wiser than before.
After a business fails, it’s essential to keep moving forward to start rebuilding for your next opportunity. But before that, you need to tie up any remaining loose ends from your previous business, including formally closing its doors.
When you registered your business, you created what the government recognizes as a living entity. The government will continue to treat it as taxable until you let them know it’s no longer active. This is where dissolution comes in — the process that legally ends the existence of your business. It’s a sad but necessary step to ensure you don’t get charged taxes on a business you no longer operate.
If you’re ready to take this step, we highly recommend that you complete your dissolution before the new year. Legally, if you wait until January 1 to dissolve your company, you’ll likely have to fill out a tax return for the entire year, meaning another year’s worth of taxes, fees, reports, and filings.
To learn more about dissolution, read our article on Why You Should Formally Dissolve Before Year-End.
Failure can be a shock to the system, so it’s vital to prioritize yourself and your personal, and maybe financial, recovery. While different people have different reactions to a failed business, you owe it to yourself to spend some time focused on healing.
First and foremost, your emotional and mental state should be your top priority. Depression, anxiety, and anger aren’t uncommon in business, and a business failure might amplify these feelings.
Look at this time as a period of rest where you can focus on recharging your mental health. Maybe you want to spend time with friends and family, connect with nature through daily outdoor walks, or practice yoga and meditation. Whatever you choose, prioritizing your mental health can help you rediscover and fuel your passion for your next business endeavor.
A failed business can also drain a bank account, which only adds to a negative mental state. Depending on your situation, this might be a compromising position, forcing you to dip into savings, find another temporary source of income, or apply for an emergency loan.
But don’t worry, this doesn’t signal the end of your journey. Hundreds of entrepreneurs have lost everything and bounced back, including multi-millionaires such as Walt Disney, Dorothy Hamill, and Steve Jobs. Even if you’ve hit rock bottom, it’s possible to make your way back to the top and have a full financial recovery.
Remember those lessons you wrote down? Now’s the time to work on them and make your comeback story a reality. Here are some helpful suggestions on how to start rebuilding. Before you know it, you’ll have a new recipe for success all set and ready for your next big opportunity.
Take classes to sharpen your business skills. There is a vast array of online courses on websites like LinkedIn and EDx, where you can take classes from accredited universities, including Harvard and Columbia.
Look for a mentor that can help guide you through your next project. By connecting with an experienced mentor in your field, you can gain invaluable information and become more motivated to achieve your business goals. If you’re not sure where to start, try networking in your community. Past co-workers, family friends, or even fellow college alumni could all be potential mentors to help you along the way.
Attend networking events to connect with other people in your industry. Every person you know is an asset, and by building up those connections, you might find investors or partners to help your next business succeed.
Include motivational material in your daily routine. Start mentally preparing for your next project with inspiring podcasts, books, or webinars made for entrepreneurs.
Winston Churchill once said, “Success is not final, failure is not fatal: it is the courage to continue that counts.”
Remember, a failed business isn’t a personal failure, and it isn’t an end to your future as an entrepreneur. It’s just one step in the right direction toward future success.
For more information on what to do after closing up shop, read our article on Dissolving Your Business the “Right” Way.
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