Failure is an emotionally loaded word that elicits negative and unwanted feelings.

Failure is often a statement about our performance. And it says that we couldn’t live up to our own expectations or the expectations of our mentors, parents, and even customers.

But not all failures are the same.

Small failures are necessary for personal growth and for the growth of your business, but it’s up to you to use the small failures as learning opportunities or neglect them until they gradually become into big and possibly irreversible failures.

In this post, I want to shed some light on the meaning of failure and help you identify the small (and good) failures and avoid the bad ones.

1. Small Failures and Big Failures

People are often focused on results, and rightly so. After all, if your business is not profitable, or if you missed a deadline, or if you didn’t meet a payment, then you’ve failed to achieve the intended result. You’ve failed to do your job. Ouch!

But let’s remove the negative connotation associated with failure for a minute and distinguish between small healthy failures and big bad ones.

Small failures are failures you can recover from quickly and grow.

So if you’ve created a computer game that didn’t sell, but you quickly learned the nuts and bolts of building one that appeals to your target audience, then you’ve experienced a small failure. And that’s the good kind of failure.

In fact, research shows that small failures are the bread and butter of a successful business. These are the stepping stones to a better business and better results. They help you understand what skills you need to develop, what features of your product need work, and what beliefs you need to change and modify about your market strategy. To that effect, small failures are “tests” that give you feedback about your assumptions and ideas. They tell you what works and what doesn’t and they usually motivate you to search for better and more effective solutions.

Big failures, on the other hand, have the opposite effect. But let me give you my definition of big failures first.

A big failure is a build-up of persistent and voluntary small failures in the face of negative feedback and data. This happens when a business repeats the same mistakes despite bad results.

For example, if you miss one deadline or your fail to launch your product on time, then you should go to the drawing board and re-examine the process you used to complete your project. There, you need to modify your strategy in order to avoid making the mistake again. However, if you keep missing deadlines despite losing business and despite customers’ complaints, then you’re headed for a big failure. The accumulation of small failures will eventually run the business into the ground.

And big failures are emotionally and financially taxing.

2. Consistency

The best way to avoid big failures is to take proactive action all the time.

You need to think critically about your small failures and address them as soon as they arise. Don’t postpone taking action and give yourself a break. I know it’s hard to stay on top of every detail all the time, but that’s the only way to learn and grow.

That seems fairly obvious.

But what’s not so obvious to most people is that failing to follow up is not a competence problem. It’s an execution problem.

Competence in this context refers to what you don’t know how to do, and you fail because of the lack of knowledge or skill. But most of the time that’s not why small businesses fail. They fail because they fail to execute.

Execution for small businesses is a matter of consistency. It’s a matter of doing the work when it needs to be done.

We all suffer from weak will every now and then, but if you’re in business and you want to be successful, you really don’t have much room to slack off. You should hold yourself accountable through by building your self-discipline and/or hiring a business coach.

Get in touch with me if you’re interested in learning more about my coaching services.

3. Is Your Business Failing?

I’ve written an article about pursuing business opportunities for money’s sake, and I’ve stated in that article that doing so is more likely to result in a financial loss than a financial gain in the long-term.

Long-term commitment requires that you’re heavily invested in the success of the business not only from a financial viewpoint, but also from a self-actualization viewpoint. The success of a business represents the success of what you’re most passionate about.

And I made those claims because I look at business growth annually and not per transaction. Most people make the mistake of focusing too much on today and next week, but they don’t look 4 or 5 years ahead. And when you look at a business in terms of its immediate returns without a 3 to 5 years annual growth plan, and your business doesn’t grow consistently year after year, then per a 5 year plan your business has failed.

I say that because if you’re willing to invest your time and energy into pursuits that will not continue to yield financial returns in the long run, you will always start from square one. This month you’re selling auto parts, next month you’re invested in a new app, the month after that you’re selling furniture, etc. If you’re “hustling,” then you’re distracting yourself and wasting your time.

Focus on a business and think in terms of a 5 year commitment.

4. Five Year Plan

One of the strategies I use to help me stay on track and assess my business progress is something that I call a five year plan.

When you decide to start a business and your data shows that it has the potential to become profitable, ask yourself if you’re willing to commit to it for 5 years.

I chose 5 years because, from my experience, the following is more or less going to happen.

1 – 3 months: Conceiving of the idea and doing research on it.

3 – 6 months: Building an elementary version of your product or service and putting it through Alpha and Beta Tests.

6 – 12 months: Marketing the product or service and reaching out to potential customers and making some sales.

In the first 6 – 12 months, most businesses don’t turn a profit on their investment. They might earn enough to cover their expenses and perhaps return the initial investment, but they’re usually not profitable yet.

And if you’re earning some money through your business, your focus should be on the next 4 years. How can you replicate the sales process and scale up the business? What mistakes have you made that you should fix and learn from? What is the annual rate of return that’s possible for your business?

If you keep yourself accountable using a 5 year plan, then you will have a better sense of the success or failure of your business than if you measured it against shorter time periods.

There’s certainly a place for a quarterly evaluation, but I’ll leave that for another article.