Learning From Business Failure: 3 Steps To Winning When You Fail.

To be an entrepreneur is to take risks. And risk often leads to failure. So successful entrepreneurs are familiar with failure—they’ve most likely experienced it multiple times on the way to success. In fact, many attribute their success to the lessons their business failures taught them. Those lessons give value to failure.

And failure is valuable for other reasons, too—if you fail the right way. How do you do that? By squeezing all you possibly can out of that failure. By making it worthwhile. So here’s our three-step approach to learning from business failure: 

Pick yourself up. Dust yourself off. Get back on the horse.

No, really. This is a useful metaphor for approaching failure in a way that makes the most of it. So let’s start with the first step.

Step 1: Pick yourself up.

You’ve experienced a business failure, and you’re still here. You survived it. The world didn’t end. And not only did this experience not destroy you, it’s also going to build character traits you’ll use later.

Traits like courage. Because after what you’ve been through, what is there to fear now? What you tried to do was scary because there was a risk of failure, and you did it anyway. No, you didn’t succeed. But you went for it. And after failing, you’re still standing. And the next business risk you take probably won’t be as scary, because of what you’ve just experienced.

Another character trait failure can help build up is strength. Consider how the burden of pushing or lifting a heavy weight can make you physically stronger. Likewise, a business failure is a heavy weight to bear, and having borne it, your inner strength can grow and become more powerful.

A third character trait you can thank failure for: tenacity. Refusing to let a failure keep you from continuing to try—and try harder—is the very essence of tenacity.

But this is important: for a failure to build your character, you must own the failure. That’s a requirement. It’s also necessary in order to proceed to the next step.

Step 2: Dust yourself off.

Be sure to give yourself enough time for this step. It’s about reflection—not licking your wounds, necessarily, but honestly considering what happened, why it happened, and what it means. Without it, learning from a business failure is impossible, so take your time and consider what's happened and what it can mean for you.

Evaluate your situation as objectively as you can. What have you lost? And what do you still have? You may be surprised.

There are three things you’ll look for. The first is reasons for the failure. Especially focus on identifying those causal factors that are within your control—things you could actually change next time around if you choose to. Also, focus on actions rather than states. For example, “I didn’t start working on this early enough in the season,” rather than “I was too busy.”

The second thing you want to look for is red flags. With the benefit of 20/20 hindsight, can you now look back and identify warning signs that you can keep an eye out for next time?

The third thing you’ll look for is guideposts. Is there anything about the failure that could be telling you something important about the way forward—perhaps to target a different market segment, or choose a different time of year for the project, for example?

Once you’ve taken the time to collect these insights and begin to understand the lessons from your business failures, you’re ready for the next step.

Step 3: Get back on the horse.

Remember those character traits you were building back in step 1? We said they’d be useful later. Well, this is when you’ll use them.

Gather all your courage, strength and tenacity to try again, start a new project, or take your next risk. Make a new plan, and go for it.

The thing is to not do things the same way you did before. Remember those insights you collected back in step 2? You’ll use those now to shape your approach—changing those variables that contributed to failure last time, watching for those red flags you can now see clearly, and heeding those guideposts that point a new way forward.

You’re an entrepreneur. That means you’ve done things most people wouldn’t do. It means you’ve taken more risks than most people. It probably means you’ve failed more times—and more spectacularly—than most people.

You’re not like most people.

It takes a special set of inner resources to do what you do. Besides courage, strength and tenacity, you also have a relentless optimism that allows you to pursue business ventures with tireless passion, over and over.

And you have an eye for opportunity that compels you to seize it without letting it pass you by. Those opportunities include every single business failure you experience along the shining road to success. Don’t waste them. Always, always pick yourself up, dust yourself off, and get back on the horse.

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