In 2014 I co-founded a business with a loan of N500,000 gotten from a family member. We paid back the loan within 6 months, and over the next 3 years, the business had expanded with physical offices in 12 states of Nigeria and about 45 direct employees plus dozens of indirect workers. Business was good. In 2016, Nigeria officially went into an economic recession and businesses began to close. Our business was also hit as our business model couldn’t survive the uncertainty and fluctuations in the market. Because we had never run a business in an unstable economy before now, we were naive and inexperienced on how to sense danger ahead such that even though we had a cash reserve, we felt it was a temporary recession that would soon be over and we could easily survive. We sailed in stormy waters for a full year between 2017 and 2018 till we depleted our cash reserves and began to shut down our branches one by one. Eventually, we were officially out of business and the business had gone bankrupt.
Some Lessons I learnt in Business
Struggling to keep a business afloat in a harsh economy for over a year and eventually shutting down, I learnt some lessons that I might not even have learnt in a business school. Although this article is not about my business lessons, some of these lessons are worthy of mention:
- Hire people for their competence not out of sympathy or charity. Don’t employ people because you want to help them. Many times, the people you hire because you want to help are the ones who end up sinking your boat. If you must help someone in need and they don’t have the competence to add value to your business, just give them money or help them learn a skill. Don’t jeopardize your business in a bid to be a nice person. You might end up being a very good person who is a very bad entrepreneur.
- Diversify early. Once your business starts having a break and you begin to make a profit, invest in other sectors outside your primary business vertical. If anything happens to the sector in which your primary business is, you will have other investments to fall back on. The chances of all sectors being hit at the same time are slimmer.
- Don’t make emotional business decisions, use data and facts to make logical decisions. I should have shut down the business one year earlier when we still had a huge cash reserve and re-invested the money in a new business. I was feeling sorry for the workers who would become jobless if I closed the business and didn’t want to be seen as a bad boss. Well, they still ended up jobless. If I shut down early, I could have been in a position to still re-employ some of them.
- Learn to forecast. Understand how the economy is interconnected and how events and policies in other sectors could affect your business even if in another sector. I am learning how to interpret things no matter how distant they look and find out how they could potentially affect my businesses. If you build this skill, you’ll learn to see danger ahead. Don’t just read news relating to your sector of business, everything is interconnected.
How to Survive Business Failure (or a Career Loss) and Bounce Back Fast
If eventually your business shuts down or you lose a promising career, how do you respond? What do you do next? How do you get yourself back up? Here are a few lessons I learned from my own experience of losing a business that was a major source of income.
- Take responsibility: Agree that where you are is a result of decisions you took or did not take. The more you keep blaming someone else for what happened to you, be it the government, your staff, business partners, economy etc, the longer you’ll keep living in denial and the slower you will bounce back. Remember also that you don’t owe anybody an explanation about why things didn’t work (except of course you had investors). Your primary responsibility is to pick yourself up and get back on your feet. You may not control what happens, but you’re responsible for how you respond.
- Have a sense of identity outside your business or career: If your business is what defines who you are, losing it could lead you into depression because you will feel that your life is over. Your business or job is not your life. Understand that you are who you are and your business or job is what you do. Losing that job or business doesn’t change you from being who you are.
- Remember that nothing is final, not even failure: See the current failure as just one chapter of your life and decide to move on to the next. It is also helpful to program your mind that not everything you do will always work out as you expect. Agree that some things are out of your control and when they don’t work as you expected, it doesn’t change the big picture. Just keep moving.
- Have mentors: having someone to talk to who has experienced what you’re going through helps you understand that nothing new or strange is happening to you. Speaking with other people and hearing their stories will encourage you to go through your current challenge, especially when you can see that they survived their own stories. When I realized how many times one of my mentors has had to shut down a business, I started laughing at myself. Yet he was extremely successful as at the time I was going through my own downtime.
- Be willing to modify your lifestyle: find ways to reduce your expenses and live within your new means and reality. See it as just a temporary adjustment to help you survive the stage you’re in. If you used to power your generator throughout the night before, run it for a few hours to charge your devices and save fuel. If you used to fly business class before, realize that economy class does not kill. Take public transport when you need to. If you shop for food in bulk before, buy what you can afford, and don’t be ashamed of the changes. If you have a strong sense of identity in who you are, this is easy.
- Pay attention to your other investments: if you had diversified early, this is a good time to pay attention to nurturing your other assets. investments, businesses or interests. In downtime, you may realize that those incomes that were never significant before could become your lifeline. If an entire sector was hit, feel free to transfer your skills and expertise to other sectors. If you’re still in business now, remember never to rely on only one source of income.
- Have the courage to start again: remember Job 14:7-9 that even if a tree is cut down, at the scent of water, it will sprout again. As a child of God, you already have the “scent of water” in you. Also remember Jeremiah 36:28, you can always re-do everything that was lost and do it even better. Study why your business failed or why you lost that career, take the lessons and apply them to something new and ensure that you never fall for the same reasons. You’re a better business person when you have failed at least once.
- Don’t waste time crying over what is lost: time is life. What is dead is dead. Bounce back early. The longer you stay on the ground, the slimmer your chances of getting back up. Nobody owes you sympathy, and even if they do, don’t console yourself in the sympathy of people. Pick youself up, admit that this phase is past and start creating a new dispensation for yourself. The power to build the future is always in your hands today.
- Don’t let failure affect your faith: Whatever the outcome of your business or career, let your faith stay strong. Draw strength from God not from your success or your failure. Ships float on water, but when the water that should be outside them gets into them, they sink. Challenges and failures have their own uses in your life, but don’t let them get to your faith.
There is nothing happening to you that you cannot survive. Today, I hardly remember that we lost a business. We’ve built new businesses that are stronger because of the many lessons learnt. A business failure or career loss is not the end of your life. If handled well you will come out of it stronger, wiser and more humble.