Small Business Failure - Get Used To It

To be a successful entrepreneur you are going to have to learn to deal with failure. In fact, in Jamaica of the approximately 16,000 micro and small businesses that are established every year, more than 80% of them fail and close business operations during their first year. There is no way around the hurdles and possible failures of start-ups and its eventual success. Take Thomas Edison for example, he tried over ten thousand different experiments before he finally demonstrated the first incandescent light bulb on October 21, 1879. Bill Gates' first company, Traf-O-Data, was a failure. Michael Jordan was once quoted as saying: "I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game winning shot; and missed. I've failed over and over again in my life. And that is why I succeed."

In my short stint as an entrepreneur I've failed more times than I can count. I started a consulting firm, had three loyal clients which eventually thought that paying for my service was irrelevant. I started a mobile app development business, made three (3) great apps but failed to read the fine prints from the developers and ended up losing the residual income. And despite having my share of success the failures far outweigh the accomplishment, and I’m sure I have a lot more failure ahead of me. I’m OK with that because I know that as soon as I stop failing, I have stopped trying to innovate. It's the nature of the business of being an entrepreneur, and of success in general.

If it were easy, everyone would do it. It is naive to think that every good idea that you have will result in a successful business venture. I have yet to hear an entrepreneur say "every single idea I come up with seems to work." More likely, you hear something like "I failed at my first five businesses before this one took off."

Think about that for a second. Five (5) businesses! Sometimes the number is 3, sometimes 20, but the important point is that most entrepreneurs don't make it with their first company. To make it you must be willing to take some risks and continue to push even after failing a couple times. And if number six fails, you have to do the same and move on to number seven.

In my opinion, the most important thing is how you deal with failure. Once you accept that it's inevitable, you are able to learn from your mistakes and move on. It's easy to let the failure consume you - not so much because you are pessimistic, but because it is hard to see something that you poured your heart and soul into be ignored or rejected. As soon as possible you need to come to the realization that your business is what they are ignoring or rejecting, NOT you. The sooner you do that, the sooner you can objectively analyze why you failed and learn the things necessary for improvement in the future.

Failure isn't easy and is extremely frustrating, but it's a necessary part of success. Don't believe me? Ask Thomas Edison, Bill Gates or Michael Jordan! Ok, asking Thomas Edison might be a little tough, but you get the idea.

A Small Business Summary

Small business is a term that is used day-to-day. That is because in the past decade the rise of small business has been larger than in any other decade prior. This is largely due to the increasing number of services that are available to small business owners, to enable them to keep their business running.

There really isn't any guideline for when the term small business and many even interchange it with terms like SMEs or, Entrepreneurs. However it is simply defined as a business which has a small number of employees. The actual number is debatable and the definition of when a business changes from a small business to a larger corporation varies both by country and industry. This number is generally less than 100 employees. In Jamaica, according to the MSME & Entrepreneurship Policy 2013, the term is based on annual sales and turn over. Based on the policy, “Micro Businesses have no more than 5 employees and no more than $10 million in sales; a Small Business has 6-20 employees and has annual sales of $10-50million while Medium Sized Firms have between 21-50 employees and achieves $50-$150 million in annual sales.”

Yet due to their nature and size, these firms are in most times sole proprietorships, partnerships, or privately owned. Common in many Caribbean countries, small businesses, are most often sole proprietors and includes graphic artists, beauty professionals (hairdressers and Barbers), restaurants, consultants (accountants, marketing professionals, etc), small shops, tradesmen, solicitors, farmers, small-scale manufacturing etc.

They often start in private homes, for two main reasons. The first is because it is economical since overhead expenses are kept at a minimum. The second reason these business owners believe that they will elude the ‘tax-man’ if their operations are covert and kept at home.

Running a small business is an exciting venture, with a myriad of ups and downs. However, if done properly, the advantages are great and the notion of financial freedom is well worth the risk. If you are interested in starting your own small business, I would recommend having a talk with a local lawyer or accountant, who will be able to answer questions that are specific to your local area. Good luck with your new venture!

Catch the Spirit of the Entrepreneur

Grabbing opportunities with open arms is often easier said than done. In Jamaica, like the rest of the world, people find themselves dreaming about being rich but never actually doing anything about it. A combination of procrastination and the 'what if' syndrome can cripple your creative spirit, and might mean your idea will never become a reality.

Socrates said "Action equals knowledge'. He was one of the greatest philosophers of our time. What he meant was that it is through action that we achieve results.

For example, I've interacted with several aspiring entrepreneurs who have solid ideas, great business plans but lack one of the key factors of a business mind, i.e. the ability to take a risk. You can dream forever but accomplish nothing unless you actually make the effort to take that proverbial leap of faith. Much like the martial arts approach - the idea is to take action immediately and avoid over analyzing the situation.

Now that we are in a New Year, one of the most talked about resolution is "I'm going to do it, I'm going to make it happen". Be it lose weight, profit from a hobby or take a trip. How many of us have even set that timeline? In any case, if you want to start your own business but are afraid of what kinds of things can go wrong or whether your initial investment will pay off? It is natural to feel that way. There are millions of things that could go wrong but likewise there are many things that can go right! Fear can be paralyzing. When thinking about starting a business particularly if you keep waiting for the right time. There will never be a perfect time. It's now or never when it comes to starting your own business.

Overcoming your fear is a step by step process.

• Do you have a clear idea of what kind of business you want to start? A clear plan will help keep your worries at bay. 
• Do you have access to the resources you will need? This includes the necessary start up cash as well as anything else you will need.
• Do you have access to clients or do you know enough about marketing basics to ensure you will have enough interest in what you are offering?

Just like anything - taking action is the most important part. Make an itemized list of what you feel needs to be done in order for you to start that business you always dreamed of.

Prioritizing your list will help too. Don't wait for all your ducks to be in a proverbial row before you begin but make sure you have all the basics covered.  Don't wait for that 'perfect someday'. Make an imperfect start and take the first step towards your small business.

Don't over think everything. Sometimes the best approach is to just jump into the deep end.