Entrepreneurs: Plan to Fail. Fail Early. Fail responsibly. (Part 3)

Author: Miccheng

5 Oct

Business Lesson: Fail Responsibly

Business start-ups seldom happen in a vacuum. It involves clients, employees, suppliers and investors. So when your business does fail, it will affect all these people at the same time:

Clients won’t have anyone to service / supply them
Employees will be jobless
Suppliers will lose a source of income
Investors may lose money (or get less than their desired ROI)

Part of your business continuity planning should address all these stakeholders in your business. Treat them well and settling the affairs appropriately will have many benefits.

Ensures continued goodwill for all parties
Friends will still be your friends
Suppliers will still work with you on your next project

The financial future of our families and loved ones (including your own) could also be at stake when we fail. Always take steps to limit your family’s exposure and your own debt liabilities in the business. My personal belief is that we should never gamble with our family’s financial well-being.

As a rule of thumb, never sign anything that could expose yourself to mountainous liabilities - have a buffer somewhere. You should probably talk to a lawyer or financial advisor on this matter - ways to mitigate damages in the case of bankruptcy or personal injury.

Your legal protection is also vital. Don’t procrastinate - in our flurry of busy-ness in starting up, we have a tendency to overlook the small stuff - like the legal paper work of partnership and contracts. I probably lost a lot of money in my partnership in SprintServe and Comwerks due to the absence of proper paperwork. When shit hits the fan, you have only yourself to blame for being shabby with your legal legwork.

In the end, be true to your conscience and do what’s right to those around you.

Conclusion

Failing is like a baby taking its first tenuous steps in walking upright - failing the first few times doesn’t mean we’re a failure forever. As humans, we have the capacity to learn from our past mistakes - and to try again. Failing to try - learning from the lessons before - and walking again, is the real failure. What doesn’t kills you - makes you stronger.

Learning how to manage the lows as well as the highs are the hallmark of effective & responsible entrepreneurship. More importantly, never be afraid to fall down, never give up, never be afraid to try again. The success you desire could be just one start-up away!

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This post belongs to a series: "Entrepreneurs: Plan to Fail. Fail early. Fail responsibly."

Entrepreneurs: Plan to Fail. Fail early. Fail responsibly. (Part 1)
Entrepreneurs: Plan to Fail. Fail Early. Fail responsibly. (Part 2)
Entrepreneurs: Plan to Fail. Fail Early. Fail responsibly. (Part 3)

Filed under: Entrepreneurship

6 Responses for "Entrepreneurs: Plan to Fail. Fail Early. Fail responsibly. (Part 3)"

pRoToCoL October 5th, 2007 at 2:40 pm 1
Haha mike another good article, i think i ought to recommend you to go take your mba, i think u will do well!

Failure is good, however it is a hard way to learn, i usually find taking the path of least resistance would be the most appropriate way. learn from other people’s experience and find your own group of mentors and counsels and stick to their people, dun disappoint them and dun let other people affect your view point.

Entrepreneurship is like tunnel vision, the only thing you should be seeing is your success, if u see if often enough you will begin to believe it and when you believe it that half the journey won already. remember the most difficult obstacle is yourself.

there is a reason why the most commanding and successful people throughout history were megalomaniacs with huge egos, like genghis Khan or Hitler or even winston churchill.

remember history is written by the victors and no one in the world has time for a loser.

harsh lesson but its a harsh world.

Entrepreneurship is lonely, demanding and definately not a easy career path. The rewards are high but the risks are equal if not higher

i always encounter people who give up the minute things go bad, and then they blame everyone but themselves.

well u are partially right, as an entrepreneur you will suffer failure, small little failures, but if u let em accumulate then its becomes a big blunder, i believe its more of perserverence and not letting the small failures get to you, always keeping the big picture in mind.

and as per yours and my experience, make sure your paperwork is always in place! we sure learnt that the hard way!

cheers
Eugene
arzhou (adrian) October 5th, 2007 at 5:33 pm 2
Another good read. I really gotta start compiling all the advice you, cobaltpaladin, TUW have dish out over all this time
Miccheng October 5th, 2007 at 11:27 pm 3
eugene: Ha ha… we certainly did.

arzhou: Thanks for the advice dude… will consider it carefully.
winston October 17th, 2007 at 5:20 pm 4
Ah hi miccheng, guess who?

Agree with your post,anyway life is a learning process so we are here to fall and learn. Not everyone has to learn Maths the whole day

Great post!
Su Yuen November 3rd, 2007 at 9:06 pm 5
I guess the hardest part is knowing how to get up after failing. Usually when people fail, they go into a very emotional and “under the weather” period which may drag on for many months (sometimes years). The challenge would be to overcome that fear to try again.
Miccheng November 18th, 2007 at 4:30 pm 6
@suyuen: Yeah… failing is really a state of mine. It can get quite hard to overcome the stigma of failing. I guess all entrepreneurs are born stubborn creatures - the more u say no, the more we’ll want to do it.

A period of lull to gather your thoughts and rethink your strategy is actually a good thing. As Socrates once said: “An unexamined life is not worth living”. Re-examine your priorities, rediscover what’s important to you, rekindle the passion in your mission in life - and move onward and upwards.