Entrepreneurs can grow from business failure

Business failure has been extolled as the path to entrepreneurial enlightenment and future success. There is even an online magazine -- named Failure (failuremag.com) -- that celebrates business and personal flops of the past and today.

But, as anyone who has experienced a business failure can tell you, the aftermath isn't pretty. Often the business owner is drowning in debt, self-esteem has taken a nose dive and the future isn't looking bright. The uncertainty and loss of self-respect that often accompany the initial failure usually prevent one from appreciating any light that may be at the end of the tunnel.

Nicholas Hall, an entrepreneur who has experienced three business failures, says "the moment you realize that your dream is dead, it really stinks." He used his experience with failing businesses to create a Web site, startupfailures.com, which serves as a place for business owners to commiserate, learn and bounce back. The site offers experts to answer questions, links and stories of failures that did end up on the bright side.

Unfortunately, the typical life of a small business can be painfully short. According to the U.S. Small Business Administration's Office of Advocacy, nearly one-quarter of all businesses with 500 or fewer employees close within two years of start-up. Half of these small companies close by the end of the first four years. About half of the owners say they were successful when closed or they just decided to shut down, and half say their business failed.

Failure does have its bright side. It is often the gateway to innovation and new growth.

In her books "Mistakes that Worked and Accidents May Happen: Fifty Inventions Discovered by Mistake," author Charlotte Foltz Jones outlines dozens of failures that sparked ideas that turned into successes, including the following:

The artificial sweetener aspartame, or Nutrasweet, was discovered by a drug company employee trying to develop an ulcer

medicine.

Leo Baekeland was looking for a substitute for varnishes, but his experiments created a substance too tough to use as a coating. Rather than accept failure he decided to change direction and work on making his material even tougher, as well as moldable and dyeable. The result was one of the first plastics: Bakelite.

James Wright tried to invent a rubber substitute made from silicon. His trials resulted in a gooey product that bounced but had no use. He gave up. Five years later, Peter Hodgson developed the idea to encase the goo in plastic eggs and sell it as a toy. "Silly Putty" was born.

Failure in any business can have a positive outcome if the entrepreneur is willing to acknowledge and learn from his mistakes and then identify a different approach -- whether with a new product or a new management style.

For example, business history has many examples of companies founded by entrepreneurs who were better at starting and organization than running it. Know your strengths and weaknesses. Michael Dell, founder of Dell computers, enjoyed building computers, not dealing with operations, so he brought in seasoned managers to help with the management of his business.

Entrepreneurs must also be willing to listen to dissenting opinions, whether from a lender or elsewhere in the business. A common mistake for entrepreneurs is to deny that their business is in trouble. By the time it is acknowledged it is often too late to correct the problems. Raising failure issues can be an important step in business. If you find your business floundering or at the brink of failure try some of the following tips offered by PowerHomeBiz.com:

Review every step you have made. Identify and evaluate your mistakes. Think of what you could have done otherwise or improved. This is not a time to play the blame game -- to yourself or others -- but to learn from the mistakes and then move forward.

Persistence is the key. Keep trying until you find a business idea that works. Refuse to give up. Re-examine your business idea, and determine if there is some niches in the market that your idea can address.

Do more research and reading. Get to know people in your planned business venture. The more information you have, the greater the chance of success.

Remember that failures can be outweighed by success if the entrepreneur is willing to learn and grow from the mistakes.

Take to heart a few inspirational quotations for when business gets tough:

The will to persevere is often the difference between failure and success.

-- David Sarnoff (1891-1971) Russian-US inventor, pioneer, executive

When you come to the end of your rope, tie a knot and hang on.

-- Franklin Delano Roosevelt (1882-1945) US president (32nd)

Failure will never overtake me if my determination to succeed is strong enough.

-- Og Mandino (1923-1996) US editor, writer, motivational speaker