You will have to accept the fact that almost 90% of all startups fail and you need to plan for failure as much as you do for success. If you are in the right mindset while a startup fails then it will help you to adjust to the financial and emotional turmoil associated with it.
Preparing for Failure
Some people may think that if they start preparing for failure then it will make them negative. But here you will have to understand the difference that exists between thinking about and preparing for failure. If you are thinking that you will fail then it is going to curtail your growth and is very discouraging while preparing for failure is a practical attitude in which you plan all possible outcomes. This attitude even helps entrepreneurs in progressing further and motivates them to move on.
If you prepare for failure, then it helps you to predict the challenges and many times, you can stop them from taking place. In addition to it, when you think about probable failure then it helps you in identifying the mistakes what are being made in the business and rectify them.
Reducing Emotional Attachment
Most of us have emotional attachment with the company and by preparing for a probable failure can help you become more objective and reduce your affection towards the company. After you reduce your emotional attachment with the company, you are able to look at things the same your customer as well as investors do. This assists you in developing new ideas about the company as well as finding other problems, which we are unable to trace while emotionally attached with the firm.
No Room for Complacency
There is less complacency, if you think there are chances of failure and remain alert all the time knowing that something wrong can happen if you lose focus. If you become self-satisfied, you may do mistakes, which will be enough to destroy a business that takes a lot of effort to set up. Additionally, in the eventual situation where company fails, you will have to face less shock as you had been already preparing for this situation.
Planning for Worst Case Scenario
You need to think about the future and make plans accordingly, as for example, what would happen if the company loses one of its main clients? What impact it will have on people working in the company, investors and firm’s cash flows? These questions seem difficult to answer but you will have to make a plan and work accordingly.
Preparing for failure is quite important for entrepreneurs and can help them analyze the errors and correct them.