Making mistakes when starting a business is inevitable, but for some young entrepreneurs it’s enough to crush their dreams of ever starting a business again.
The mistakes, failures and wrong turns in the world of business can be costly, but the cost doesn’t have to be worthless. Smart entrepreneurs take these costly mistakes, learn from them, and build strength for future gains.
Zach Beutler, cofounding partner of Horse Power Brands, a franchise conglomerate consisting of several service-based franchise systems including Mighty Dog Roofing, knows this lesson all too well. At the ripe age of 21, Beutler had to painfully shut down all seven of his nutrition stores and let go of his employees – despite having pulled in $8 million in annual revenue. Young and zealous, he increased marketing spends to build revenue, without taking into account the dropping profit margins in a more competitive landscape with online retailers, realizing too late that the revenue model had changed. His lack of business experience at such a young age led to a costly mistake. Fast-forward, Beutler, now 33, has changed the course of his entrepreneurial trajectory and has since built and sold multiple successful franchise businesses.
The below tips are meant to provide advice for young entrepreneurs on how to take what might be a costly mistake and use it to make something great.
Once you’re able to admit and accept the mistake, you can begin to push forward with a new endeavor.
Accept your mistake: The first step in professional development post-failure is simply acknowledgement and acceptance of the mistake. Be warned, this will take a hit to your ego, but once you’re able to admit and accept the mistake, you can begin to push forward with a new endeavor.
As a leader or business owner you must take full responsibility of the mistakes you make. It’s important to not place blame or make excuses because at the end of the day as the owner you have to own the outcome and stay humble. As Mark Twain once said, “Good decisions come from experience, and experience comes from bad decisions,” a mantra Beutler embraces.
Dissect the details: Beyond accepting the mistake, you have to dig in to truly understand where exactly things went wrong. This means asking yourself the tough questions: Why did it go wrong? What did I learn from this? How can I avoid this from happening again?
This is often the most overlooked step in the process. In order to actually make the mistake meaningful and set yourself up for future success, you need to go through the exercise of dissecting the details.
- Were there early signs that sales weren’t going well that were ignored?
- Were there issues with tracking expenses?
- Were vendor partnerships producing ROI?
- Did you make appropriate pricing adjustments?
- Did you have a team in place for support?
- Did you follow the business plan and/or revisit consistently?
When young entrepreneurs try to grow big, big doesn’t always mean profitable. After Beutler quickly realized that the cash flow was not there to keep his stores operating, closing became a reality.
It’s almost impossible to find a story of success that doesn’t have a trail of mistakes behind it. Nearly everyone experiences failure at some point. Be honest and objective, dissect the financial details. What gets measured gets managed.
It’s almost impossible to find a story of success that doesn’t have a trail of mistakes behind it.
Change your mindset: A costly mistake can have detrimental effects on your mental state – which means, it’s time for a reset.
How you view your mistakes determines how you react to them and what you do next. Have a growth mindset, where you see mistakes as an opportunity to improve, and not as something that you are doomed to repeat because your mindset is “fixed” on the belief that you can’t improve. Leaning into personal and professional development has level-up skills.
Even when being forced into a disappointing and uncomfortable situation, there are still opportunities to improve as a leader. Think about the things you can be doing right now to sharpen your skills and prepare for the weeks and months ahead. Maintaining and working toward your vision is more important than ever – and that starts with reframing your mindset so that you can think clearly, be creative and find solutions.
Remember, you’re young – take this opportunity to find your weaknesses and create solutions that, in turn, will help you bounce back stronger than before. Failure is simply an inevitable stepping stone to greatness.
Develop a future plan: This is the most critical step – taking corrective action. By developing a future plan, you will be less likely to repeat mistakes that could lead to another loss.
Be detailed in your plan, but be sure it is flexible, as it is unlikely the exact same factors will be in place in the future. If your first failure taught you anything, it is to be nimble – ready to make adjustments as needed.
With that said, you need to give yourself the foundation to make appropriate and informed decisions should you need to make significant pivots– that’s where your future plan comes into play. Always think: How will this decision impact said plan? Will it allow me to remain on the course to achieving the vision?
Rely on mentors: You can’t do it alone–and you don’t have to. Whether it’s a business partner, a colleague or accountability coach, it is crucial you have a support system to help you commit to your forward-looking plan and stay focused.
Not only will mentors point out flaws, help you break bad habits or give great advice, they also are there to provide you the encouragement you need to take strategic risks, believe in yourself and actualize your plan.
In order to receive the most out of your mentor, you have to be a good mentee – ask for help, be open to new perspectives, show vulnerability and accept feedback.
By doing so, you’re gaining knowledge from others who have been in your shoes – and now, you’re able to act upon it.