Not every online store is a success. In fact, many experts believe that most ecommerce businesses will fail. But failure is not the end for an entrepreneur. It is, instead, a lesson or even an opportunity to start a new, better business.
When your online store fails, when sales are nonexistent and profits are only a distant and fading dream, you may need to stop operating. But you do not need to stop thinking or doing. You can still be an entrepreneur. You can still be a success. Here are four things to consider as you shut down your ecommerce business.
You Are Not Alone
Failure is part of the entrepreneurial process. Many of the most famous entrepreneurs you can think of failed, sometimes repeatedly, before they founded a successful company.
Bill Gates and Paul Allen of Microsoft tried and failed in the 1970s with an automotive traffic management solution called Traf-O-Data. Similarly, Nick Woodman, who created the GoPro, failed with an online, discount electronics store before going on to become a billionaire.
Walt Disney, Richard Branson, Larry Ellison, Henry Ford, and even Colonel Harland Sanders all suffered through failed businesses. The list goes on.
In fact, depending on the source, something like 80 percent of new businesses fail in the first 18 months of operations. Of the businesses that survive 18 months, only half will make it past year five. These statistics should not discourage you from starting a business. But they should remind you that you may need to start more than one.
Your greatest challenge, then, is not to avoid failure, but to overcome failure’s emotional sting. Often the difference between a successful entrepreneur and a failed one is simply that the successful entrepreneur tried one more time.
Recover Value from Your Assets
Even if you’ve deemed your business a failure, it probably still has value. Do your best to get as much money as possible from the assets that you do have.
This may mean selling any remaining inventory, auctioning off your domain name, posting your office equipment and shipping materials on Ebay, or even selling your entire business.
Your aim is investment recovery. Get back as much of your investment as possible.
For inspiration, consider the example of Hastings, the book and music retailer. It filed for Chapter 11 bankruptcy and was soon purchased by Hilco Merchant Resources and Gordon Brothers Retail Partners. The buyers shuttered Hastings and made their money from the sale of assets. If Hastings is worth something despite being a failed company, other failed businesses are, too.
To sell your assets, consider contacting competitors, posting ads on Craigslist, offering items on marketplaces like the aforementioned Ebay, or putting your business up for sale on Flippa or similar.
Assess, but Don’t Obsess
Assessment is the act of evaluating a thing to learn about its nature, quality, or ability. You should assess your failed business. Failure’s only redeeming quality is that it can teach us a lesson about success.
In a very honest way, try to determine what went wrong with your business. Did you run out of capital? Did you need a better plan? Was your product not a good fit for the market? Was your website too slow? Was shipping too expensive? Could it simply have been a matter of timing? Did you overpay for search marketing consultants?
Try to decide as succinctly as possible what caused your business to fail. Then figure out how to avoid that problem in a future company.
Do this without being obsessive or blaming yourself. You probably had something to do with your business going awry. You are culpable. But as mentioned in point one, failure, in one form or another, is common.
Learn from your mistakes and be ready for the next business.
Start Your Next Venture
“If you are one of the many aspiring entrepreneurs who have taken the leap and started your own business only to eventually fail, fear not, there is an upside that you can take away from the experience,” wrote Kevin Colleran, a venture partner at General Catalyst Partners, in a 2013 Wall Street Journal article.
“Instead of obsessing about the negative aspects of failure, you should focus on the often stated but rarely believed lessons that failure makes you stronger, and increases your chances of future success. If you have failed previously in a business venture, you are lucky because your chances of success the next time around have increased.”
Colleran’s point should not be understated. Your recent failure is a strong indicator of your future success. Stop beating yourself up about your recent failure. Learn from it and move forward, planning for your next ecommerce operation.