How Can I Recover From A Failed Business?
When you open a business, you know there’s a risk you’ll have to close it; no matter how small the risk is, it’s still there.
Between 2020 and 2021, the total business population decreased by 390,000, according to gov.uk. While we don’t like being negative, it’s good to be prepared for if your business fails and plan how you’re going to move forward.
Close the business, in the right way
While it might be tempting to close the door and walk away without looking back, you must ensure you’ve followed the correct procedures when closing the business.
If you’re registered as a limited company, you’ll likely be using voluntary strike-off to close your company.
If you’re not sure how to close your business, we recommend seeking professional advice.
Try and see where you went wrong
Take your time reaching this stage; if you’re feeling angry or upset that you failed, it’s not likely you’ll be going into it with a clear head.
Once you’re ready for this step, assemble some of your trusted stakeholders, such as customers, partners, employees, and investors, to see if you can figure out what went wrong.
Go into it with the mindset of “what risks did we miss?”.
Think about the following areas:
- Did you have a product that customers wanted?
- Was your product high-quality?
- Did you have the right team members who worked well?
Your failure might have been down to an external factor, such as a recession. If this happens, sometimes there’s nothing you can do, and your business fails.
But if you look back, you can still see where things started to go wrong, and what you could have done to minimise the risks you faced.
Don’t repeat your mistakes
Now you know where you went wrong, you can plan to avoid these pitfalls in the future. Whether that’s through tweaking your product or your team, you need to make sure your offer is the best that it can be.
Another bonus is that you can plan an exit strategy for if things go sideways again. Having your exit strategy laid out in your business plan from the beginning lets you know what triggers you can look out for and what you need to do when you hit certain points.
And remember, failure is a learning point. No one is born knowing how to run a business or create products their customers will like. Everyone who is in business now has had to learn how to be there, and sometimes the best way to learn is to try something and fail at it.
If you’re ready to make the plunge into company ownership, register today.
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