Every business owner should be building their own personal brand in addition to their business – because customers and clients connect with people, not products and services. Social media and branding expert Carissa Hill said a personal brand was important for business owners because increasingly customers want to know the people behind the company. “People Read More…
Let’s talk: Business failure
Wed 11 December 2019 - 7:11 amFeatured | Let's Talk
Entrepreneurs, business owners and business leaders aren’t always very forthcoming when it comes to their failures, especially with publications like Dynamic Business, however it’s inevitable that in founding and running a business you are going to make some mistakes.
You’ll even notice that our comments are a little shorter than usual this week, perhaps reflective of the fact that we are not taught to fully embrace our failures and share those with others.
However, failure is a part of life and a part of learning. Without failure, we ultimately cannot succeed as we aren’t forced to grow or adapt.
As part of our mission to empower small business to succeed, we’re sharing the business failures of our experts so that we can learn as a community.
We asked them to discuss their most significant business failures, and what they subsequently learned.
Here’s what they had to say:
Rebecca Percasky, co-Founder and co-Director, The Better Packaging Co.
I’m a huge believer in turning every business ‘misstep’ into an opportunity for growth and learning. In the early days of The Better Packaging Co., we went through our banks to transfer money to five overseas warehouses and our international suppliers. While trying to meet the growing demand for our sustainable packaging solutions, every cent counted and to be honest, still does. Discovering that we were getting charged additional fees, while juggling five different currencies, was frustrating and impacted our bottom line.
We’re certainly not the only business owners who have worried about how to manage finances when increasing international sales and expanding operations. The OFX Cross-Border Confidence Index supports this, finding SMEs’ greatest concern when it comes to foreign exchange transfers, is having excessive fees eat into precious profits. Integrating the right financial partners into our business processes has literally saved us thousands of dollars and a few sleepless nights! I’d encourage all SMEs to do the research and connect with supportive financial partners who can enable your business to operate effectively on both a local and global scale – they are out there.
John Sammut, CEO, Flower Power
Expanding into Melbourne was a significant business failure.
Our reason for entering the Melbourne garden centre market in 2006 was because we had an opportunity to take over three K-Mart Garden Centres. We considered the stores were a reasonable size, in a bulky goods centre surrounded by large retailers such as Harvey Norman and Officeworks.
The problems we faced and ultimately the reasons why the business failed in Melbourne were:
- We had little (nil) brand awareness in the market. Flower Power was unknown and most people thought we were florists.
- We needed to spend considerable amounts on marketing to launch the brand and build awareness.
- Bunnings had a huge presence in the market and we did not differentiate ourselves enough from Bunnings.
- K-Mart Super Garden Centres were a different format to our Sydney format and could be perceived as similar to Bunnings.
- We moved away from our successful large format stores in Sydney. The format of the K-Mart stores did not allow us to replicate our successful model in Sydney, i.e. drive-thru landscape, large areas for our indoor/outdoor plants, extensive homewares and furniture range, café, etc.
- Small boutique garden centres were a large percentage of the garden centre market in Melbourne.
- Drought conditions coincided with our entry into the Melbourne market – contributing to the ultimate closure of the three stores approximately 3 years later.
What we learned from this experience:
- We are in the ‘entertainment business’. We’re a destination-type business that people are prepared to travel to.
- Because we are a destination business – people like to browse, take in the ambience, enjoy the gardens, have a coffee and something to eat, in a calm green setting.
- Ultimately we learned that we should to stick to the successful format/model of our destination stores in Sydney.
Emma Lo Russo, CEO and co-founder, Digivizer
My biggest personal failure was completely misquoting an enterprise project by close to $1m. I hadn’t checked the formulas in a spreadsheet. When I found out I was absolutely mortified and couldn’t sleep. The next day I asked for a face-to-face meeting and shared the workings and where I had gone wrong. I apologized profusely and said we couldn’t complete the job unless we could agree to a new price. I even offered to forgo any fees and mark-up.
The client did agree to the project, and didn’t ask for us to forgo fees, just to do a damn good job. And we did. I was so personally committed that they saved my arse, I did all I could to ensure that project’s success. This client remains a friend now 20 years later. It taught me to quickly face your worst fears, be honest, and provide solutions. And of course double- and triple-check big sums and spreadsheet formulas before presenting!
Read more on the importance of business failure:
- February 14 2020 Brotherly ties bringing out the best in business: An entrepreneur pair
- February 12 2020 Let’s Talk: ‘Hire slow, fire fast’
- February 11 2020 Leading the change: Fender Katsalidis introduces equal parental leave
- February 7 2020 From bullying victim to founder of Bullyology: Jessica Hickman’s story