Loss is a stepping stone to success. Pain, which is an often an accompaniment of loss, is a powerful motivator. Which business owner can you name who hasn’t, at one point or another, faced business loss? It can be said with absolute certainty that no one can claim 100% success at all times.
Not too long ago, sometime in the last year, Mark Zuckerberg, the Chief Executive of Facebook, Inc. took a hit of over $15 billion. Shares closed down approximately 19% at $176.26, wiping over $120 billion off the value of the company in one swoop. Also, there was the data privacy scandal where Facebook was accused of not ensuring the privacy of its billions of users. But, neither Mark nor other Facebook bigwigs have given up. They are fighting their way through the crisis and trying to cope with the losses.
When you are running a business, you must have your eye on the prize – to become a big brand that people trust. Small and even devastating losses will be a part of your success story. Expecting to smoothly sail through to the top is making castles in the clouds.
For all you budding entrepreneurs and startup moguls, given below are a few strategies that will help you get over a major loss or failure in your business.
# Love doing business, but do not love the business
If you get attached to your business or the money that it is initially bringing, you will be unable to think clearly when the time comes for you to move on. Instead of committing yourself irrevocably to something that might turn sour one day and beyond your control, commit to a lifetime of doing business to the best of your ability. This will create a perspective and help you see the failures of today as a stepping stone for tomorrow’s success.
Steven Paul Jobs or Steve Jobs was fired from Apple Computers. Yes, he was fired from the very company that he co-founded and made successful. When Apple fired Jobs, he was quoted saying, “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of life.”
During the next few years, he concentrated on starting NeXT Inc. with only $7 million. He quickly ran out of money, but did not give up. He looked for venture capital, but had no product on the horizon. Finally, he attracted billionaire Ross Perot’s attention and showed NeXT computer to the world at a lavish launch event. He also founded the Pixar Animation Studios or simply Pixar during this time.
After a few years, Apple bought NeXT for $427 million and he was back in the company that he found and became the CEO until he passed away in 2011.
# Handle losses like a boss
You are not a loser because of your losses. However, you can be termed a loser if you are unable to handle the situation. The way you respond to the troubles of your business is what shapes you as a leader. You need to satisfy your customers, comfort your employees and assuage the blow to your investors. You must do all of this with professionalism and style. When the losses have tide over, everybody in the industry will praise and admire you for the way you handled the situation.
Jeffrey Preston Bezos, the founder, CEO, chairman and president of Amazon, left his comfortable, cushy gig on Wall Street to move to Seattle in 1994 and sells books online from his garage. By the year 1996, Amazon’s sales reached a whopping $15.7 million and in 1997, it was $147.8 million. Of course, everybody was intrigued!
Unfortunately, by the end of the decade, Amazon could not hold onto its winning streak and it did not seem as promising as it initially did. Even though Amazon had revenues of $1.6 billion in 1999, it still managed to incur a loss of $719 million. Things did not get any better the following year when word got out that the e-commerce company only had $350 million cash-on-hand. Finally, in 2003, Jeff Bezos turned profit. He had to close some of this distribution centers, but he turned things around.
Jeff Bezos appeared #1 on Forbes The Billionaire 2018 list.
# Do not give up
The last thing that you should do is give up for the fear of losses. If Elon Musk had given up and opened a different company because his first idea wasn’t bringing him the moolahs, we wouldn’t have all-electric cars.
Elon Musk’s automobile company, Tesla Motors, had quite the rocky start. His idea was simple – to design the first electric sports car in the world. But, the road to success wasn’t that simple. Tesla received a loan of $465 million USD in 2009 from the United States Department of Energy and the company went public the next year.
However, it took Elon 4 years to experience Tesla’s first profitable quarter. The company delivered 4,900 S sedan models and recorded sales of $562 million. But, some of that revenue was a result of Tesla cutting down the cost of production.
In 2018, the company made a profit of $311 million – more than any other quarter in the history of Tesla.
# Reach out
When it comes to overcoming any kind of catastrophe, personal relationships prove to be of enormous help, according to a spokesperson, Ratul Roy of a web design company in Kolkata.
The main problem is that when people experience losses in business, they tend to feel embarrassed or start to hide such stuff from their family or friends. They pretend to put up a brave front and withdraw from social contact.
If you want to overcome your loss, you need to fight this tendency.
Don’t ever be shy of asking emotional support from your family or friends. Simply being able to talk and share your feelings will give you a sense of perspective.
Sometimes, it helps to imagine that there could have been far worse situations – like, health issues, family problems – but, all you have is a financial setback.
Christina Wallace, the current vice-president of growth at Bionic and the former co-founded of Quincy Apparel, stayed in bed for 3 weeks after Quincy Apparel shut down. She did not have any salary to rely on and her credit limits weren’t enough for her to float through. After 21 days of crying and sleeping, she rejoined the real world and realized the benefits of opening up about her losses and failures with her family and friends. She thinks that there is something amazing about trying something than not trying anything at all. She overcome her losses and went on to become the vice-president of branding & marketing at Startup Institute and at present, she is the vice-president of growth at Bionic.