BUSINESS FAILURE- How much of an entrepreneur's enemy is it?

“Only those who dare to fail greatly can ever achieve greatly” -----------Robert F Kennedy

“Would you like me to give you a formula for success? It is quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn't at all. You can be discouraged by failure or you can learn from it. So go ahead and make mistakes. Make all you can. Because remember that's where you'll find success." -----------Thomas J. Watson

“Unless you're willing to have a go, fail miserably, and have another go, success won't happen”. --------------Phillip Adams

Business failure is an entrepreneurs nightmare, no start-up entrepreneur plans to fail. The thought of failure in business is quite dreadful for anyone in business. We plan, strategize, organize ourselves as entrepreneurs so as to avoid failure as every entrepreneur should. It must be remembered that failure might result in stress in many areas of one’s life which includes, confidence, finance, personal relationships and many others.

The truth is many start-up entrepreneurs fail their initial try, does it necessarily make them failures? Let’s see: 

Colonel Harland Sanders – KFC

Colonel Sanders was fired from several jobs before he started the company/business KFC. In 1967, aged 65, Sanders went broke partly due to the construction of a road that jeopardized his business. He ended up living in his car and driving to over 1000 restaurants trying to sell his chicken recipe, asking for a nickel as commission per chicken sold. KFC is one of the world’s largest fast food restaurant chains.

·         Donald Trump – The Trump organization  

Famous entrepreneur Donald Trump established the Trump organizations in 1980 to oversee his real estates. However, in 1990, partly due to the recession, which had effects on many of his company’s project and excessive leveraging, Trump was hit by a corporate debt of about $9 billion.  Soon after that, Trump’s business was in trouble after he had a personal debt of $1 billion. Trump managed to overcome these challenges and get his business back to the top.

·        Henry Ford – Ford Motors Co.

Henry Ford's first venture, the Detroit Automobile Company, went bankrupt in 1901 due to its high prices and low quality products. Ford did not give up. Instead, he re-organized his first company to construct a new one, company. It collapsed due to a dispute with a partner.

Upon his third attempt, he almost faced failure yet again because the low sales he achieved made it impossible to pay back investors. Moments before his yet-to-become empire collapsed, the angel investors saved the company. Hence, Ford Motor Co. was born.

Lawrence Ellison - Oracle

Ellison dropped out of the University of Illinois and worked as a programmer in California for eight years. He later pursued a business with his former boss and set up Oracle Systems Corp. It was off to a rough start, and the partners struggled. Ellison had to mortgage his house to obtain a credit line, and in 1980, Oracle still only had eight employees. It was around this time that Ellison stumbled across IBM's research paper on the programming language SQL. He chose to rewrite it to be run on any computer. When IBM released its SQL supported products in 1981, Ellis was ready and Oracle boomed.

Oracle started making promises it could not keep though, and by 1990, the business was, once again, at stake. After the launch of its 6.0 version, it lost over $28.7 million as clients could not run it – it was infested with bugs. Deciding to start over again, Ellison fired everyone on site and put together a new management team. They liquidated accounts, tightened financial control and created a system which awarded sales reps when a product was shipped. 

Richard Branson - Virgin

Branson's first venture was a student magazine, which he was arrested for as he broke laws prohibiting the publication of advice on remedies for venereal disease. By the age of 20, Branson had already established the Virgin Records shop, which experienced continuous cash-flow problems, even when sales were high. To pay off an overdraft, Branson pretended to buy records for export to escape the excise tax on sales. 

Virgin Atlantic was founded in 1984, starting off with one jumbo jet for a year. During the Government certification flight, birds flew into an uninsured engine, resulting in an explosion. Branson had to pull out cash from his overseas financial subsidiaries and reconstructed the company. After a court battle with British Airways - Branson claimed they played dirty tricks to steal passengers – rising fuel prices and the economic environment of the 1990s, Branson had to sell Virgin Music in 1992 to Thorn EMI. It's been a rough path; but today, as we know, it was worth it for Branson.

Walt Disney - Disney

Since his youth, Walt Disney wanted to be a newspaper cartoonist. He found himself constantly rejected. A reporter once told him he “lacked imagination and had no good ideas.” After Disney founded his first cartoon studio at the age of 22, a bad business deal made the company bankrupt. This led to a trip to Los Angeles. The contents of his suitcase: a shirt, two undershorts, two pairs of socks and some drawing materials. His attempt to become an actor never came true, but he instead founded Disney studios with his brother Roy.

During World War II, the United States army took over Disney studios as a repair shop for tanks and artillery. His animators were all sent to war, including Disney. The company ended up with a debt of more than $4 million as business after the war was slow. Although they had started distributing in Europe, they were having problems getting finance to the USA. So, they started producing feature films overseas.

  

It is not a must for a business to fail before it succeed but in the event of failure in business, one might make it either an avenue to learn from past mistakes like many successful entrepreneurs do or an avenue to quit, throw in the towel and give up on dreams. As long as there is proper business planning, whatever failure comes, its effect is minimal. Business is a path and a good  entrepreneur must understand that the path is usually uncertain and risky. The inability of an entrepreneur to see business failure as an opportunity to regroup, re-strategize, learn and re-launch the business in a much bigger, better way, makes such entrepreneur a failure.