Learning From Business Failures

By Erin Ollila, Contributor, on January 24, 2018

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Abraham Lincoln is often regarded as one of the greatest American presidents, but his road to the White House was paved with loss, rejection and business failures. Between 1821 and his election in 1860, he lost multiple nominations and elections and failed in two business ventures. But he persevered, getting a law degree and earning seats in the state legislature and Congress before eventually becoming the 16th president.

As independent workers, there’s a lot we can learn from Lincoln’s trials and tribulations. Unlike traditional employees or entrepreneurs with small teams working under them, we have to figure things out for ourselves. Every task of a small business is placed on our to-do lists, and we have to dig our way out of every setback or failure — if we even can.

Plus, as a solopreneur, business failures may devastate your professional and personal finances. So, how can an independent worker look failure in the face and continue on with grit and perseverance to succeed? Here’s a story of how failure crept up on a fellow self-employed professional, and what she did to grow her business and protect her finances.

An Indy’s Experience With Business Failures

When writer A.J. O’Connell first started working as a self-employed professional, she received job referrals from people she knew and was doing quite well. “At the beginning of my freelance career, I didn’t prospect,” O’Connell says. “I relied on agencies and editors who liked me to give me work. Part of that was that I’d never had to prospect before and didn’t know how. Part of that was terror. I kind of stuck my head in the sand and trusted that the work would always be there.”

Unfortunately, the referrals started coming in less and less. “One of my favorite editors took a new job in a different field and my work began to dry up,” explains O’Connell. “Up until that point, I was making a lot of money. I assumed my profits would just get bigger and bigger, but all of a sudden I was watching my earnings plummet. So I started prospecting in June of 2016. I’d never done it before, and I was terrible.”

She continues, “I have a whole document of people who ignored me, and another whole document of terrible cold emails I sent. They were awful. It took 44 tries for me to get any interest from anyone at all. I was rejected after a test post. A local business ghosted me. I stood out in the rain at a local fair and handed out business cards. It was dismal.”

Don’t Quit, Learn From It

O’Connell could’ve quit trying and looked for a full-time job, but she trusted her skills and abilities too much to let a stagnant job search get her down. “It took me 78 tries and over a year to find a marketing formula that really worked for me,” says O’ Connell. “It took a lot of work, research and just keeping at it.”

Because she didn’t simply quit, O’Connell ended up developing a process that now serves her well. She can identify potential clients quicker and tailor her introductions or pitches so it’s easier to land the deal. She also learned that a setback, even a major one, doesn’t mean she should close her business. If anything, she learned how to continue in the face of failure.

“I do think my background as a creative writer and journalist helped me persevere with my business,” says O’Connell. “Writers are always sending work out and getting rejections, so that was good practice for prospecting. But I also just assumed I didn’t know enough to prospect correctly. I didn’t think people were rejecting me personally, because I know I’m good at what I do. I just thought, ‘well, I don’t know how to do this,’ and kept changing my strategy until I found something that worked.”

Prepare Your Finances for Anything

There’s also a lot you can learn about protecting your finances during a stressful period in business. First, if you don’t have money saved up in an emergency fund, it’s important to get started on that right away. Put a certain percentage of every payment you receive into an account you only access in a true emergency. Then, play around with your income to see if you can earn more from past clients, implement some passive income streams or onboard new work — even if it’s temporary. Eventually, after you’ve taken these four steps, your finances will be less in jeopardy if and when your business ventures don’t succeed.

In many ways, people who bounce back from failure are more likely to thrive. As Scottish author Samuel Smiles famously wrote, “We learn wisdom from failure much more than from success. We often discover what will do, by finding out what will not do; and probably he who never made a mistake never made a discovery.” Business failures don’t need to be the end of your solo career. In fact, there’s so much you can learn about yourself and your business if you push through the hard times.

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