Nobody likes to fail. Coming up short on a task or letting down those around you can evoke feelings of shame, guilt and frustration that can get in the way of your overall goals. It's a natural feeling that can strike any small business or entrepreneurial venture.
According to the U.S. Small Business Administration's Office of Advocacy, roughly 20 percent of small businesses survived their first year, and only half made it past the first five years. Look forward to 10 years in business and the number shrinks further to one-third of all businesses that survive that long.
"The whole premise around failure is that every single entrepreneur is going to fail multiple times, and the successful ones ... use failure as a springboard instead of a stop sign," said John Assaraf, CEO of NeuroGym and a New York Times best-selling author. "How they define failure determines how they feel about it – whether they continue taking action or stop dead in their tracks."
Knowing that failure is a part of starting a small business or becoming an entrepreneur, what can you do to bounce back? If you've made an error as a leader, here are a few ways you can recover from it.
Accept failure. As hard as it can be to see failure as anything other than something to avoid at all costs, it can be a learning experience. Creating anything is hard, and roadblocks pop up from time to time. Success or failure doesn't have to be a binary concept, according to Assaraf, as long as you learn to "separate the failure from who you are as a person."
"When you fail, ask yourself what the three biggest lessons you learned were and what you can put in place to make sure it doesn't happen again," Assaraf said. "It's also important to consider the warning signs you might not have listened to fast enough."
Jodi Goldstein, managing director of the Harvard Innovation Labs, said that one of the most important lessons she can teach her students is how to fail gracefully.
"If they want to be entrepreneurs, they have to learn [how to fail] quickly. We encourage them to fail early and often so they learn the necessary lessons to innovate," she said.
Let employees feel safe to fail. Failure doesn't only happen at the top of a small business. The people you hire may at times make mistakes that affect your bottom line or that adversely affect the company's public image.
The best leaders take responsibility for the failures of their people, but that doesn't mean they shoulder unjust blame. Rather, they let employees accept responsibility for their mistakes and give those workers the opportunity to make amends. When these problems arise, Assaraf believes it's important to become an effective leader and help your employees learn from their mistakes.
"When you are leading employees through failure, you have to make sure they feel safe failing and that their job is not on the line unless they keep failing over and over again," Assaraf said. "Always extrapolate the lesson [from those failures]."
Apologize quickly. When mishaps inevitably happen, it's important for small business owners to get out in front of it. One of the worst things you can do when things go wrong is to ignore the problem altogether. To your employees, that can cause uncertainty while your customers will lose trust in you.
When addressing a problem, Ron Edmondson, a pastor and founder of Mustard Seed Ministry, said apologies to the right people "can't be done too soon."
"You don't have to tell the world, but those who need to know should hear it from you and not from anyone else," Edmondson said.
Fix your failure. Don't leave the cleanup to anyone else, Edmondson advised. You should help the team recover and find solutions.
"Do whatever you can to stop further damage from occurring," he said. "If there are financial issues involved, try to recover as much as you can. If there is collateral damage to relationships, apologize quickly and try to restore trust."
Move on. When the dust settles and you've successfully navigated through the storm, it's important to try again. To that end, Assaraf said moving forward is "really about learning the art of managing your focus and maintaining your emotions."
"The emotion of failure and feeling like a failure deactivates the motivational centers of the brain ... so you have to learn to frame failure in a way that empowers you," Assaraf said. "You have to … learn from failures and go [on]."
If things become untenable and the result is an unsuccessful business venture, remember that it's not the end of the world. Throughout human history, there are countless examples of individuals who failed spectacularly before becoming a massive success.
Abraham Lincoln, the 16th President of the United States, failed to get elected to the Illinois State Legislature and the U.S. Senate, among other personal, business and political shortcomings. Internationally lauded author J.K. Rowling was an unemployed divorcee and single mother in financial dire straits before she started penning the Harry Potter series of books.
In business, failures can make or break a startup. How you react to those missteps ultimately determines whether you and your business can rise above challenges.
Additional reporting by Karina Fabian. Some source interviews were conducted for a previous version of this article.