I don’t know you. But, if you’ve found yourself on a blog like this I would suggest you’re a recruiter. You’re good at what you do, with a clear command of the sector you work & you might have toyed with the idea of starting your own recruitment business over the years.
Bottom line is – you’re a smart cookie. Therefore you would have seen the title of this blog & clicked through with understandable cynicism about the suggested content. & rightfully so.
It would be arrogant, ignorant, heck down-right wrong to suggest that there is some magic formula that means you will always avoid failure as an Entrepreneur. & more so to even suggest that failure in business is something that you should be scared of – personally I feel is wrong.
So, if failure will always be a weird & wonderful part of business ownership, perhaps what would be more useful is to explore some of the reasons why businesses have failures. In the hope that in being aware of them you can put plans in place to overcome these hurdles when they inevitably come knocking.
Not enough Industry knowledge
Entrepreneurship is commonly under-estimated in terms of its challenges. & I’m not talking here about personal challenges & struggles, but more the day-to-day industry challenges that this new business will come up against.
It’s all about timing when starting a business &, for me, that timing is two-fold. You need to personally ready & you need to be professionally ready. The issue (sometimes) comes when an individual will be personally ready & therefore so pulled to do something for themselves it’s becoming uncontrollable but professionally, they could really do with another few years learning the ropes & getting to grips with the industry.
So ensuring you have enough self-awareness to know really where you are in the process is an important element when it comes to minimising the failures that occur during your business journey.
Not respecting cash flow
If business were a religion – and if you ask some Entrepreneurs I think they’ll strongly argue, it is – then Cash Flow is the supernatural Deity we should all worship. Cash flow is King. Cash Flow is Queen. Cash Flow is, well, it’s everything.
& here I’m talking about two types; personal & business. Healthy personal cash flow is paramount to ensuring that the “start-up” phase of your business is as “smooth” as that phase of a business can ever truly be. Not budgeting & not being scrupulously aware of your money in the early days is like racing at Le Mans in a FIAT 126, 1987 edition. Yeah, you want to be a contender but there’s no chance of you making it past go.
It’s the same when you look at your business cash flow. How do you ensure you keep in control? Make sure you have an accounts team/back office system that you trust & can talk to. & when I say talk to, I mean talk to. Regularly. Religiously. After all, cash flow is a supernatural Deity, is it not?
Lack of self-awareness
Everyone has strengths. Everyone has a weakness. The best recruitment business owners in the industry aren’t good at every aspect of their business, but what makes them “the best” (on whatever metrics you might use) is the self-awareness of that very fact.
As a result, they identify those areas that, either they don’t want to get involved in OR they don’t (at least in the early stages) feel confident in taking on & find people who can help them. Having that self-awareness & that humility to know what you can’t do – will always help you avoid the failures that come as a product of doing too much.
You will never avoid failure in some guise during the lifetime of running your own business. It’s a wonderful infinite game that can never be won & therefore, of course, you will experience some setbacks. I guess, at least in our experience, what has really helped “our guys” over the years is appreciating that yes, failures happen & yes, they’ll be times where you’d rather be doing anything else than running your business BUT you have a team around you that will always be there to help. That’ll have seen the hurdles & challenges you’ll face 101 times before you & they’ll be fortunate enough to have been able to navigate around those challenges every time.
So – can you avoid failures in business? No. But you already knew that.