Failure in business is not just embarrassing, in the Caribbean, there can be long-term ramifications to the personal wealth and security of the business owners. Although it is important to manage risk and failure, they ought not to be avoided completely. We discuss why.
Although it is not openly discussed, one of the unspoken truths of entrepreneurship in the Caribbean, is the consequence of failure. The situation is especially acute in tech entrepreneurship, as they can be considered riskier, due to the fact that a venture might be novel, or people may not truly understand the concept or how it will be executed.
Generally, if you fail once In the Caribbean, it cannot be automatically assumed that there will be second, third and fourth chances to try again. A key stumbling block tends to be personal responsibility a individual is expected to bear when financing a business, and consequently, the personal property he/she is at risk of losing if the business fails or experiences undue difficulty. So, in addition to the devastation of closing a business, one might find him-/herself not only losing the family home, but also hard-earned nest egg that had squirreled away for rainy days.
However, slowly but surely, things are changing. Increasingly, as the financial sector across the Caribbean region becomes more competitive, commercial banks are looking beyond brick and mortar operations for investment opportunities. Many countries also have at least one development bank, which tends to offer lines of credit at more attractive rates than the commercial banks, and with the objective of nurturing specific types of ventures in the country.
We also cannot forget the angel investors space, which although small in the region, it does exist and is growing. Having said this, angel investing is not for every entrepreneur. The threshold to receive financing tends to be high, and the entrepreneur must be prepared to not only give up a share of the business in exchange for the influx of capital, but also must be prepared for the loss of autonomy that is inherent in such arrangements.
Although the experience of failure might never be welcomed, there can be even greater risks to a business by trying to avoid it completely. Below are four reasons why Caribbean businesses entrepreneurs should be prepared to embrace failure more.
Failure is inevitable
First, and in almost any aspect of life, failure can be expected. Frequently, things do not go as hoped, or planned. Regardless of our commitment and effort, the outcome of almost any activity is not guaranteed. Hence, in keeping the possibility of failure in mind, it is easier to manage expectations, the effort invested, and overall, to be more circumspect in one’s attitude and actions.
In not risking failure, neither are you risking success
Although it might be possible to have some modicum of success in almost any activity or venture, there comes a point where to have even greater success, for example, to grow a business, launch a new product or service, or nab an lucrative contract, there are risks. In not preparing to manage those risks, there is no chance of realising success. On the other hand, even in trying managing those risks, success is not assured – but one is in a better position to achieve success.
Although might appear to be just luck and chance, the truth of the matter, as the saying goes, is that ‘you need to be in it, to win it’. Sitting on the side-lines trying to avoid risk and failure may ultimately undermine whatever success you might have made in the past.
Growth requires risk; doing nothing is a itself a failure
Following from the previous point, and it is something that tends to be evident across Caribbean businesses. They loathe change. They continue to do things the same way they did five, 10, 15 years ago, and as a result, they tend to limp along – not completely out of business, but neither are they considered successful.
Further, many of these businesses are being overtaken by start-ups in their field, that are more agile, responsive and innovative in their offerings and operations. These businesses are also feeling the pinch of changing consumer attitude and behaviour, who increasingly recognise their own spending power, and desire of getting the most value for their money.
Make your failures count
Finally, and as difficult as a failure can be, wouldn’t it be a travesty if at the end of the day you learned absolutely nothing from it? Failure is an experience. Sometimes people try to stretch out a difficult situation to try to minimise the fall out, but that just prolongs the trauma and discomfort – the inevitable – longer than necessary.
However, if the attitude is one of learning from the experience, then the failure itself is not a complete loss. It can position you for the greater success that is just around the corner – if you have courage to pursue it.
Image credit: Chris Potter (flickr)
