It’s time to contemplate and make a confession. I would like to share my biggest business failure in my entrepreneurship career.
Before you get any negative impressions, let me explain the title above.
I believe people are failure-prone. In fact, making mistakes and failing are the best way mankind survives through the ages.
In business world, entrepreneurs are making failures so often that failures are not that scary anymore to most entrepreneurs. In fact, entrepreneurs’ success is made through failures.
What differ a successful entrepreneur to the rest is how he/she reacts to business failures. Is he/she giving up or ready to try again?
For a successful entrepreneur, successes are stumbling rocks and failures are the great teachers of all. Failures teach entrepreneurs to be better personally and professionally. On contrary, success after success won’t make an entrepreneur better – In fact, successes will likely to make an entrepreneur procrastinate and inclined to learn from his/her success for the future business endeavours.
Any proofs? Let’s take me for example.
What is my biggest business failure?
My biggest business failure is losing two franchise units I purchased about 4 years ago, and up until last year, I blame the economic uncertainty and the franchising concept for the failure.
How much does the failure cost me? The loss of opportunities and $150,000 in total business investment.
The exit: I close one franchise unit and sell the other one way below the initial investment I have made.
What I learned from the failure
The biggest slap on my head is for me to stop blaming the recession and the franchisor. I have reminded myself, as I point my finger to others, the other four are pointing to me.
I learned that I achieve success too early, in a way that I’m not ready to face the success itself. The first franchise unit I bought is very successful – It has broke even in 4 months with ease and my business shows no sign of slowing down – the outlook is fantastic.
Then this is what I did (slap!) – I learn from my success, and decided to buy another franchise unit assuming that if it was so ‘simple’ for my first franchise unit, it would be just the same for my second franchise.
Then the domino effect has started – Buying the second franchise unit was easy – the location is fantastic and I could imagine people flocking to my business, but getting the same numbers as the first franchise unit was not.
And my assumptions were proven wrong. People were NOT flocking to my business. Why? Because my franchise unit looks ‘odd’ in the middle of independent business swarming my business’ area of operation, catching my business in a price war – Something you don’t want to get your business into.
I realised by then that in franchising, you can’t compete for prices – Franchising is great, but it is not cheap, especially on the royalties and fees’ impact on your business bottom line. Franchising is about positioning your business in a certain segment targeting a certain group of people with a certain household income.
To cut long story short, this second franchise unit was loss-making, and in the process, dragged down the first franchise unit with it.
Ka-boom, crash. Ouch.
I learn the hard way for us not to take things for granted. If you are successful, be wary – Never, ever, learn from your success.
Nevertheless, every failure brings good things in life – I picked up the pieces and started my journey into making money online (thus born Noobpreneur.com and dozens of other web properties) that makes me more than 1000 percent return on investment. And yes, I keep learning and working hard, ‘running away’ from my own success.
What is your story?
I also learned that the best way to keep yourself grounded is by sharing your experience by involving in a business network where you can grow yourself personally and professionally.
So, if you feel inspired by my story, please share yours by commenting on this article, answering these two questions: What is your biggest business failure, and how you pick up the pieces and finally achieving business success (or milestones.)
I dare you to fail