Business Failures?

[business guru]

Has anybody run a business that has failed, please tell us about it so we all don't fall into the same trap.

For example:
What was the business?
How much did you invest?
How much did you lose?

 

[business guru]

Edit: 40,000 new businesses start every year, 20% fail in the 1st year.

 

good luck with this. failing in business is a hard pill to swallow, your asking people to explain how they failed on a live forum. My respect goes out to anyone who takes this offer up.

Michael

 

[business guru]

Well maybe people can be annoymous if they like by using a different name? :|

 

[woodss]

My business is a cascading failure, success, failure, success depending on a) the amount invoiced and b) the amount paid!

It differs every month

 

[Draugen]

I've never had a business that has failed, but I did struggle at one point due to overspending and going over budgets where it wasn't necessary.

I made two mistakes:

1. Staff costs. I was employing more people than I really needed and was trying to keep everyone happy by making sure I was giving them plenty of hours. Now I've tightened up on things like that, realising that while it's important to get on with my staff, I'd rather make a few enemies and make good money than have a dozen new friends but go bust.

2. Marketing costs. I was spending a fair amount, and not getting enough back. Prime examples were things like temporary signage, I splashed out £900 on some great looking "Expand-a-sign" banners, when realistically I could have got some posts and corex signs for £50 and would have had the same effect! I'm now very careful on what I spend with regards to marketing as unless I can virtually guarantee spending a large amount of money will net a sizeable return, it will be far more useful to me remaining in the company!

 

[quikshop]

This is the biggest problem in the UK today, our attitude to failing in business. In the US its seen as a kind of apprenticeship, an essential stepping stone to achieving success Failure to them is simply a learning process that puts you in a better position for your next attempt.

I've had a business that failed, quite spectacularly. It was an online retail business, I'd had two very successful ventures which I'd sold to fund online business number 3.

Unfortunately I did just about everything wrong, including:

• not researching my market at all and just presuming to know the answers.
• going for expensive big-effect one off advertising which did result in a short term boom in sales, but the cost per customer was way too high
• getting side-tracked with spin-off ideas rather than focusing on the core business
• Failing to accept the demise of the business soon enough

I learned far more about myself and about business in the 18 months it took for that business to finally collapse than I learned in the 5 years of successful trading before hand.

I can say with absolute certainty that the businesses I am involved with now are doing as well as they are because of my experiences failing with a business.

 

[Poppy Design]

Hi

I do have a friend, who after 6 years has given up their business to go back to work for someone else.

They were very talented in what they did but had perhaps too an easy going manner and found it hard to manage staff.

Unfortunatley, although they treated their staff very well with generous holidays and bonuses, some of the staff chose to take advantage i.e going off sick, not turning up etc

They found themselves working weekends just to pay these staff's wages - not ideal especially when you have children.

I really don't see this as a failure and either do they - in fact they are getting the same wage but weekends off and holidays without the major stress of managing staff!

Joanne

 

[BusinessIdeas]

I once had a musical instrument shop business which started to fail due to ebay competition. So I thought "If you cant beat 'em join 'em"
I moved the business into a small industrial unit and concentrated on selling a range of digital pianos through ebay. This went really well for about six months because I was buying every piano in that range that my supplier was bringing into the country. Eventually however my supplier increased his order from China and all the other traders jumped on the bandwagon increasing competition on price. The prices on ebay then fell to a point where it was no longer viable, at that point I gave up the piano business, and concentrated on the business that I operate now.

 

[Matt1959]

I've failed in the past may years ago - the main reason being not charging enough - very easy to do when you first start off and are desperate for the work.

 

[Jezclayton]

Has anybody run a business that has failed, please tell us about it so we all don't fall into the same trap.

For example:
What was the business?
How much did you invest?
How much did you lose?

To be successful involves taking risks and in turn there will be financial setbacks on one hand but experience gained on the other.

I would imagine there are few self-made millionaires out there who haven't at some point or other faced financial ruin. Hardly what you would refer to as failure. Rather than focus on investment and losses why not consider the mistakes made and most important what was learned from them.

I don't consider any of my previous occupations/businesses as individual entities but rather an ongoing project that morphs on an almost daily basis.

My biggest mistake was to be too sub-servant and as a consequence work excessive hours for inadequate reward. I have now learned to regulate my hours and price my work accordingly. Not so much a failure as a highly positive and profitable step forwards.

 

[ratso]

I have just put my business into administration due to a number of problems a bitter pill? no, a relief as all too many people try to keep going usually for all the wrong reasons. Always remember YOU come first no one else and nothing else. My problem I looked after the staff and not myself and family.

There is no shame in closing a business as this year we are likly to see the highest number of closures for many years and the figures also reveal that the number of businesses closing down in 2007 increased significantly to 498,900, an increase of 8% on 2006.
The fact is that the number of start ups usually off sets this number.

I am now picking up the pieces and sorting out by trying to sell off all assets with the help of the administrators, something I would advise anyone closing down as I am realising higher resale prices, though still have to seel the main assets our web sites.

 

[BusinessIdeas]

I have just put my business into administration due to a number of problems a bitter pill? no, a relief as all too many people try to keep going usually for all the wrong reasons. Always remember YOU come first no one else and nothing else. My problem I looked after the staff and not myself and family.

There is no shame in closing a business as this year we are likly to see the highest number of closures for many years and the figures also reveal that the number of businesses closing down in 2007 increased significantly to 498,900, an increase of 8% on 2006.
The fact is that the number of start ups usually off sets this number.

I am now picking up the pieces and sorting out by trying to sell off all assets with the help of the administrators, something I would advise anyone closing down as I am realising higher resale prices, though still have to seel the main assets our web sites.

Sorry to hear that your biz failed, but knowing when to quit shows good business sense. I agree that people sometimes go on trying way past the time when they should have shut up shop. This can damage health as well as wealth. Best of luck for the future...

 

[oldeagleeye]

I took a big pill when as a mortgage broker in the early 1990's the housing market crashed into negative equity and for the first time in history on that scale. Did I consider myself a failure ?. Of course not. Almost every high street bank became technically insolvent at that time as did many of the major insurance companies.. Were they all failures too. Of course not. The entire responsibility for that fiasco can be firmly placed at John Majors door and a totally incompetent Chancellor. So who cares. It's no use gripping about it. After all. I am an entrepreneur and the ups and downs of life are what makes our tribe tick.

I enjoyed the sheer pleasure of building that business up working from home into the biggest master brokers in the UK - and I all within 2 years. Then there were another good three years when I enjoyed all the trimmings of success. The sports cars. The big matrimonial home. A wine bar. I even had a Cessna 172 parked over at my local flying club - but at what cost. I hardly ever had time off to enjoy a few hours flying around in a clear blue sky laughing at motorists stuck in traffic jams 3000 ft below. I was hardly ever a home much either which eventually led to a divorce after 25 years of marriage. I suppose that some would call that a personal failure too but they would be wrong. My ex-wife and I now get on better that we ever did - mainly because I have learned to pace myself again.

The bottom line to all this then certainly as far as I am concerned is that Jez is right. For the true entrepreneur there is no such thing as failure. Only lessons to be learned and you can learn just as much often more from the downturns that the best times. What's more. Lets not forget that tricky little elf called 'Chance' whose favourite game seems to be spinning the signs whenever we come to a crossroads in our lives and sending off in a direction we would not otherwise have taken. Should we worry about that. No . In the early 1990's with the lifestyle then I would probably be dead by now. Never be afraid of Chance and you never know this credit squeeze may actually open new doors for you.

 

[deniser]

I know about 20 people whose businesses have failed. The reasons in these specific cases I am thinking of are varied eg.

1. Pursuing an idea which is something you like and have an interest in and think everyone ought to be interested in but which doesn't actually appeal to the wider market.
2. Being a disorganised type of person unable to implement any kind of systems and proceeding in utter chaos
3. Becoming ill or injured and not having any contingency plan whilst in hospital and having teatment or unable to work
4. Taking over an existing business which was already beginning to fail without recognising it or being able to turn it around
5. Being in the wrong location without sufficient footfall
6. Spending too much borrowed money on setting up which can never be recouped
7. Losing interest in the business - to make a business succeed, you do need to be quite obsessive about it and to be obsessive you need to really enjoy what you do.
8. Choosing a business which doesn't suit your character - for example one which requires a lot of interaction with consumers when you are not a friendly sort of person
9. Expanding too quickly and struggling with cashflow
10. Not operating the financial side efficiently in raising and chasing invoices
11. Changing times and not keeping up - primarily not embracing the internet

These are all specific businesses I know and they all went under for these different reasons.

 

[JoyDivision]

My own business has its failing including:-

1) Organisation - I am sure I am paying too much tax because I loose some expenses receipt.
2) Not charging enough - it a trap I am now stuck in though slowly am increasing my prices.
3) Not making enough effort and being lazy.

 

[Jezclayton]

A potential failing - Spending too much time on UKBF when I should be raising invoices.

 

[xujing]

I can say with absolute certainty that the businesses I am involved with now are doing as well as they are because of my experiences failing with a business.[/quote]
Failing not always bad things, May you business going more and more well!

 

[quikshop]

A potential failing - Spending too much time on UKBF when I should be raising invoices.

I second that, motion passed