Written by: Chelsea Lamb of businesspop.net.
Every business owner faces setbacks. While it can be incredibly discouraging to watch your sales dip and your client base dry up, it’s not the end of the world. Get back out there and try again!
Of course, this is easier said than done when your finances have taken a hit. To help you cope with your financial setback and navigate a new startup, here are some other steps you should take as you pursue your new venture.
Prioritize Your Personal Finances
Before jumping into your new business, make sure you’re on track toward financial recovery from your past setback. FinancialMentor recommends first accepting your situation and taking inventory of your current financial health. Make sure you have a clear picture of your current resources and liabilities so you can make a plan to regain your financial footing.
Calculate how much money you owe in debts, how much income you bring in every month, how much you spend, and what remaining assets you have to draw on. Then, establish goals to correct issues with your financial health. Be prepared to make some sacrifices to meet your goals. For example, you may have to pick up a part-time job or cut back on discretionary spending until you get back on your feet.
Avoid falling for common misconceptions about being in debt that can hold you back from reaching your financial goals. Putting too much pressure on yourself to pay off debt can be debilitating. Be kind to yourself, celebrate those small victories, and take it one step at a time.
Take it Step by Step
Speaking of taking things step-by-step, this is exactly how you should approach your new startup. Too many entrepreneurs rush through the startup process with their eyes on the finish line, but growing a profitable business takes a lot of time and hard work.
To help you plan a successful launch, the U.S. Chamber of Commerce outlines each step in detail. Start by doing market research to better understand your chosen industry, writing a business plan to establish your startup roadmap, and registering your business with your state and the federal government.
When it’s time to register your business, you will need to choose a legal structure. Many small businesses start as sole proprietorships, but this type of structure can leave you personally liable for business debts and lawsuits. Instead, consider forming an LLC to separate your business and personal assets. LLCs also enjoy flexible taxation options without the complex formalities involved in running a corporation.
Shift Your Perspective
If you’re struggling to get back into entrepreneurship after your setback, you might benefit from a shift in perspective. Try to see failure as a learning opportunity! Embrace setbacks as a chance to learn what doesn’t work so you can build an even better business the next time around. While it’s easy to attribute failure to lack of experience, even the most accomplished business owners make mistakes.
Flexibility is critical to your success in business. While it’s human nature to resist change, entrepreneurs should be willing to adapt their business strategy to better align with changing consumer behavior. As we saw during the pandemic, the businesses that thrived were those that quickly shifted to meet new customer demands. Instead of seeing roadblocks as something negative, try to view them as new challenges to overcome and opportunities for growth!
Leading entrepreneurs are always looking to improve themselves and their businesses. By earning an MBA, you’ll learn business-specific skills such as communication, management, leadership, and decision making. And by enrolling in an online degree program, you’ll be able to complete the coursework according to your schedule so you can still focus on running your business.
No one launches a business expecting it to fail. But the harsh reality is that most businesses experience setbacks from time to time, and entrepreneurs have to be ready and willing to learn from their mistakes. Take some time to tend to your financial health, establish a new startup plan, and get back out there!