3 Business Failures & The Lessons I Have Learnt from Them

Richard Conway

A lot of entrepreneurs celebrate failure and attribute a lot of their success from the lessons they have gained whilst going through tough times. Personally, I don’t like failing one little bit and therefore try my utmost to avoid it. Despite my best efforts however, some of my businesses have not gone to plan. Even worse, I have managed to make some of the same mistakes more than once!

Failure Number 1 – Don’t Trust A Handshake

When I was 15, I started a patio cleaning business with a friend. When we started the business, we shook hands and agreed to be 50/50 partners. We would hire a pressure washer, door knock and just get on with it. From the start, I was upfront that I was not available at certain times due to mock exams at school. We agreed that my friend would cover for me if this happens and I would make it back up in the holidays after the exams.

The business started really well, it was back breaking work but very lucrative for two schoolboys. We had a job booked in the following week and I was unavailable, therefore my business partner did the work. Come the following day, he had decided that he got 90% of the money and I get 10%. No discussion, negotiation, or anything. He just decided. Needless to say, the business relationship was short lived (although we are still friends to this day).

Sadly, this is a mistake I have repeated in different forms and been burnt by twice since. Needless to say, I have finally learnt my lesson!

Failure Number 2 – It’s Never That Easy

Whilst running my main business, I started another website that drop shipped office furniture. The plan was to build the website, promote it and watch the dollars roll in. Customers would buy online and the wholesaler would fulfil directly. The proposition was a best price guarantee.

The business worked to an extent. When someone was looking for a single item, they were often happy to buy sight unseen (the furniture was branded and had very good warranties). Unfortunately for any order of any significant volume, the customer wanted to visit a showroom, inspect the items and discuss their requirements. The business became time consuming, was only marginally profitable and was a distraction to my main business.

Failure Number 3 – Find The Right Partners

I invested in and acquired a 40% stake in a sports clothing brand. The other 60% was owned by the company founder and creative director. This business lasted a few years and generated a small sum of money (enough to break even).

I believe the reason the business failed was that the founder was extremely rigid in his ideas. He was not coachable or able to take on external input. Some glaringly obvious things that needed to be done were roadblocked by him, ultimately leading to us deciding to shut up shop.

The failures I have been involved with have not resulted in external people losing money or not being paid, and I would hope that I would never be in a situation where that happens (I have significant investors in my current business, however they should get a great return!).

Whilst I think it is important to make mistakes and learn from then, it still does not make them any the less painful!