In the aftermath of the Coronavirus pandemic and the inevitable, economic impact resulting in many business failures, the struggle for survival is becoming a part of many business owners’ working lives.
Small and medium-sized enterprises are the wealth creators of the economy and prolific providers of employment. People who have inspiration, skills, stamina and courage to set up businesses with dreams of success are sometimes faced with insurmountable challenges that lead to business failure. Factors that often affect businesses are outside business owners control.
The prosperity and well-being of countries has always relied, and continues to rely on, those who have the initiative, courage, and entrepreneurial spirit to set up and develop businesses. There is, therefore an urgent need to ensure, through the provision of help and support, this entrepreneurial spirit is not extinguished altogether.
Business Failure is an inevitable consequence of the way the free market operates. Businesses grow by gaining a competitive advantage over other businesses by claiming their market share. Businesses sometimes fail as a result of products being superseded by new technology, fashions changing, or unforeseen situations that result in sudden economic downturn.
The ideal scenario is to be prepared to close down before losing money with a new business at the ready to meet new opportunities. However, this isn’t always possible.
The Importance of Helping Small Businesses:
If a business fails many of those who have worked closely, investing their time, skills, energy and money, are likely to feel a deep sense of personal failure, over and above financial loss. It is important business owners do not feel discouraged to start again. There are many lessons that can be learned from the failure of one business, making it more likely that those who have been through failure and survived with their confidence intact, will succeed next time.
The first lesson of survival is to detach the personal from the commercial.
Organisations such as the Federation of Small Businesses provide help when businesses are starting up and give valuable support to owners to grow successfully but should assist businesses when they are failing.
When embarking on a new venture, businesses and their backers neglect to approach the question of failure. The fact is, banks are supportive financially and commercially when a business is starting up or expanding but less supportive when difficulties are encountered.
There is currently a complete lack of impartial help with personal trauma and assistance in dealing with creditors, receivers, liquidators, and banks as they make increasing demands on personal assets. The absence of advice is not only restricted to those starting a business but continues throughout the life of the business and beyond.
Business owners who had suffered business failure have quoted:
“I felt a victim of circumstances beyond my control.”
“Life is the world’s greatest teacher and the experience of failing has made me stronger, more determined and a great deal wiser.”
The following themes, therefore should be taken into consideration for those experiencing business failure:
1. Businesses Need to Understand the Consequences of Business Failure before They Experience It.
2. Businesses Require Training in Crisis Management
3. Small Business Owners need Help Dealing with Personal Anxiety
4. Business Failure isn’t The End
To do this successfully, the issues described above could be met by a number of possible courses of action with further supportive actions in place for business owners. Remedial provisions such as Local and regional “survival and revival forums” for individuals who have failed in business to meet others who have been through a similar experience should be offered. A module on business closure should be included in all government sponsored diagnostic business health-check training programmes for businesses to discuss the mechanics of business closure and not personal failure.
A training programm should be offered on crisis management and how to advise businesses in a dangerous or critical state as well as a “life support” service, using specially registered and trained advisors, to help businesses in serious difficulty. These advisors should be independent and have specialist skills to give effective and impartial advice.