Business failures and comebacks
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The document provides examples of iconic entrepreneurs who experienced early setbacks with their businesses but were able to stage remarkable comebacks. It summarizes the struggles and eventual successes of entrepreneurs like Henry Ford, Walt Disney, Steve Jobs, and Bill Gates. It then outlines a general framework for how failing businesses can be revived, including re-evaluating problems, redefining strategy, innovating products, rebranding, securing financing, and reworking processes to better execute the new strategic plan. The overall message is that major business failures do not define entrepreneurs and that with the right adjustments, companies can recover from early struggles.
Business failures and comebacks
- 1. Business Failures and Comebacks Inspirational business who overcame major obstacles before finding legendary success. 1
- 2. • Many entrepreneurs have their business heroes. Some are revered not only for their spectacular successes but for the reversals they endured and subsequently overcame. • With economic indicators for a strong business recovery still faint, it can be helpful to recall the early setbacks of some of the best-known entrepreneurs and what can be learned from them. • Here's a look at iconic entrepreneurs, their early struggles and their eventual comebacks. 2
- 3. Henry Ford (1863-1947) • Company: Ford Motor Co. • Setback: Ford suffered a few failed automotive endeavours early in his career, including Detroit Automobile Co., which he started in 1899. Its cars were low quality and too pricey for average consumers. • Turnaround: Ford continued to develop better auto designs and gained national acclaim in 1904 by demoing a car -- the "Ford 999" -- that broke the land-speed record by going a mile in about 40 seconds. In 1908, he released the Model T, a well-made, low-priced car that quickly gained traction with U.S. consumers. Annual sales topped $250,000 by 1914. • Quote: "Whether you think you can, or you think you can't -- you're right.“ • Lesson: Building a brand requires more than just building a good product.. 3
- 4. Walt Disney (1901-1966) • Company: The Walt Disney Co. (now Disney Corp.) • Setback: The cartoon animation pioneer weathered several major financial setbacks in the late 1920s and 1930s, including losing rights to the popular Oswald the Lucky Rabbit character. His company was $4 million in debt by the early 1930s. • Turnaround: With barely enough cash to finance the project, Disney released "Snow White and the Seven Dwarfs" in 1938. The blockbuster movie sprung the company out of bankruptcy and bankrolled the building of a new Walt Disney Studios in Burbank, Calif. • Quote: "You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.“ • Lesson: One killer idea can quickly make up for a series of flops. 4
- 5. Steve Jobs (1955 - 2011) • Company: Apple Computer • Setback: After his forced resignation from Apple in 1985, Jobs spent the following several years developing NeXT, a computer workstation for educators. But with a high price tag and reports of numerous bugs, sales never materialized. The company burned through hundreds of millions of investor dollars. • Turnaround: Apple announced it would buy NeXT in 1996, bringing Jobs back to the company as interim CEO. He's since developed the iPod and iPad, making Apple one of the most successful Fortune 500 companies of the past decade. • Quote: "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.“ • Lesson: Having the right resources and people around you makes a big difference. 5
- 6. Bill Gates (1955 - ) • Company: Microsoft Corp. • Setback: While high-schoolers in the 1970s, Gates and pal Paul Allen started Traf-O-Data, a computer business that automatically read paper tapes from traffic counters for local governments. The idea later became obsolete when the state of Washington offered to tabulate the tapes for cities for free. • Turnaround: The two learned from their failed business how to write software for a computer they didn't yet have access to and created a new start-up called "Micro-Soft.“ • Quote: "Success is a lousy teacher. It seduces smart people into thinking they can't lose.“ • Lesson: You can learn a lot from failed endeavours. 6
- 7. Harland David Sanders, a.k.a. "Colonel Sanders" (1890-1980) • Company: Kentucky Fried Chicken (now KFC Corp.) • Setback: In 1955, a newly built interstate bypassed Corbin, Ky., where Sanders had cooked up chicken in his restaurant and motel for two decades. After selling the location and settling debts, Sanders was broke. • Turnaround: He'd already started franchising his chicken restaurant concept. He took to the road full-time to sell franchises and within five years had 190 franchisees and 400 Kentucky Fried Chicken locations. • Quote: "Feed the poor and get rich or feed the rich and get poor.“ • Lesson: It may not be the idea that's unsuccessful; it may be the execution strategy. 7
- 8. How To Revive A Dying Business? 8
- 9. Re-Evaluate: Situation • To treat an ailment, we need to diagnose the patient. The first place to start if your business is dying or failing is to look within the company. This is known as self-evaluation or self-assessment. You have to know what the situation is and what the problem is. When you already know the circumstances, you can now take appropriate actions. When looking within, focus on the following key areas • Strategy: Does the business have a direction? • People: Are the right people running the company? • Customers : Are customers satisfied? • Product : Are you offering innovative products/services? • Process : Are systems in place to get work done efficiently? • Finance : Are you competitive and profitable? 9
- 10. Re-Define: Strategy • After re-evaluation comes re-definition. Re-evaluation reveals what’s wrong with your business and re-definition is putting the business back on track. This is where you go back to the drawing board to set the overall direction for the company. This is where you create the turnaround game-plan. • Failing in business is often as a result of not having a clear direction or having derailed from the set path. So you need to revisit the following key areas • Purpose : What need or needs are being met by this business? • Vision: How far do we want to go in pursuit of our purpose as a business? • Mission: How and what must we primarily focus on as a business to be the No.1 choice of our target customers? • Values: What principles, standards and tenets must we hold to be true and never compromise as a business? • Brand: What is our promise to those we intend to serve? 10
- 11. Re-Employ: People • Hardly can you turnaround a dying business without talking about the people behind it. • A business cannot function by itself, people make it function. People make or break your business. • This is why you need to re-employ. • To resurrect a dying business, get the right people on board and get the wrong people off, period! 11
- 12. Re-Innovate: Product • Lack of innovation is one of the warning signs of a dying business. • It is impossible for a business to remain relevant in the market if it fails to introduce new products/services. • People change, market change, technology change and so must your business. If you refuse to change, by constantly innovating your products/services, you are doomed. • To bring your dying business back to life, do something new! 12
- 13. Re-Brand: Marketing • One of the consequences of a dying business is the negative impact it has on the brand. Your customers begin to lose trust in the brand as their satisfaction level declines. • Negative word of mouth marketing starts to spread and the brand is no longer known, liked or trusted in the market. • To correct this negative association with the brand, you have to kill the old brand and create a new one! • This doesn’t necessarily require a total change in the brand name; only do this as a last resort. • What rebranding means is to give your business a new meaning, a face-lift and a new brand identity. • This is why in almost every turnaround situation; the company comes up with new marketing campaigns, new logos, new brand colours, and new slogans to let the market know that things are not the same as before. 13
- 14. Re-Finance: Money • As much as I would like to tell you that you don’t need money to resurrect your dying business, we both know that would only be a lie. One of the most obvious signs of a dying business is lack of money. • You are almost out of business because you are running out of cash. So to get your business back to life, you need to pay close attention to finance. • The easiest option would be to seek external funding, but this can be a very daunting task especially if the money in question is much. So what do you do? Start sourcing for funds from within the business. • Only after you have exhausted these internal funding options should you seek external sources like; borrowing from family and friends, angel investors, bank loans, factoring, hire purchase, equipment leasing etc. 14
- 15. Re-Work: Execution • After all is said and done, there is no way to bring your dying business back to life by mere words; you need to do the work. • And not just as you have always done before, you need to re-work the way you used to work. • You’ve probably been engaged in random work rather than focusing on performance-driven work or goal-oriented work. • It is one thing to work and it is another to align your work with the strategic goals of the organization. • Only by doing so can the business be saved from dying. • Every work must be broken down into processes, must have a owner and must have a goal or key indicators to track performance. 15
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