My Biggest Failure as a Business Owner
Talking about failure isn’t easy. Paul Allen does it more openly than I’ve ever seen. That could not have been easy.
The 2nd most popular post I’ve ever written was My Top 4 Mistakes as an Entrepreneur. I think people are naturally intrigued by other people’s failures; it’s like reality TV. For some, it makes them feel better about themselves, for others it’s “peeping Tom” curiosity. I hope others learn from it. The reason for people’s interest in failure isn’t really relevant.
What entrepreneurs have to remember is that failure is real. And it will happen. It happens to everyone, even those that are successful today.
What entrepreneurs also have to remember is that failure isn’t easy. And it can’t just be tossed aside. In many cases your failure doesn’t just impact your life, but others as well.
My biggest failure has been having to fire people.
It happened when the bubble burst in 2001. We couldn’t afford to keep everyone onboard, so we let people go. It wasn’t because they weren’t good at their jobs or important to the company, we just couldn’t afford to pay them. That was brutal, and I still think about it all the time. It made me understand the value in creating jobs and the awesome responsibility a business owner has for his/her employees.
Since then, the company grew but I’ve also let others go. In those cases it was with cause; they weren’t working out (for any number of reasons.) That’s a failure, to a degree, but not a colossal one, not one that burns me up inside.
While letting those people go in 2001 was a failure for me personally, it was a necessity for the company. If we didn’t fire those people, we wouldn’t have survived, it’s as simple as that. So from the perspective of surviving it wasn’t a failure…but it sure feels like one.
Here’s some of the best advice I can give any entrepreneur or business owner building a company:
Don’t hire too many people too fast.
Before you hire someone really really really think about whether you need to. If there’s another way (outsourcing, getting more productive, re-shifting priorities, magically creating more hours in the day), do it first. Or at least think about it first. If your first instinct is to hire someone, you’re in trouble. When times get tough, you’ll have a bloated payroll and no way of paying those people. And you will feel terrible letting people go. Having to think about how you’re affecting those people’s lives in such a way is not fun.
Paul Allen knows exactly what I’m talking about. Hopefully you won’t have to go through the same experiences to recognize what happened to him and me.
[tags]small business, firing people, hiring people, growing a business, entrepreneurship, failure[/tags]
Great post, very courageous of you to share that, it will benefit others. In 30 years of management experience I couldn’t list all of the failures if I tried, particularly around people issues.
What thing I think is critical and you have it, is that you have a conscious about it and you take it seriously.
Hey Steve - thanks for stopping by!
I’ve got no shortage of seriousness when it comes to the success of my business. You have to mix some fun in there too, but when you start to affect other people’s lives in a *real* (and sometimes painful way) you better take stock and be serious about it. Companies crash and burn when owners aren’t serious.
As for courageous … I appreciate that. It’s somewhat courageous, I agree, but I think of it more as sharing what I’ve learned. I’m not sure you can really get across the emotions / importance of the advice on paper … sometimes people have to experience the failure to really “get it.” But if we can help one person right? *smile*
Keep on coming!
Ben
The pull of wanting to be prepared when starting out — knowing that doing the right thing well — is important is in the soul of every entrepereneur. It’s the sorting out which right thing is right when that is such a mystery.
Darn if every one of us doesn’t make major mistake that in some way impract other people. People who work for formal organizations have the same sincerity to do well and get caught in the same bind about finding what the right thing could be.
This post shows the strength of your leadership and your character. It shows the reasons people will always follow you. You are honest, credible, trustworthy, self-aware and willing to learn from what you do.
It may sound strange to hear me say this, but congratulations on the brave things you did and still are doing.
Hey Liz - Thank you.
On a tangent, what I find interesting about blogging is looking back through the archives of what you’ve written and re-living those moments…sometimes in real-life and sometimes just in memories.
[…] failed before. And written about it as well. More importantly, and much more challenging than simply writing about failure, is […]