How to Succeed After Failing in Business

If you think failing at business is the end of the line for you, think again. These entrepreneurs learned valuable lessons from their failed ventures.
Ghostwriter: The Open Organization, Red Hat
July 22, 2014

By every count you could think of, Bill Bartmann had achieved big-time success. As the founder and CEO of Commercial Financial Services (CFS), a debt collection service, Bartmann pioneered a new, friendlier way to collect money from those who owed it, and his company flourished as a result. In 1997, Bartmann was named one of the wealthiest people in the world by Forbes, which estimated his net worth as something north of $3 billion.

Then Bartmann lost it all.

As a result of a crime committed by one of his associates, the U.S. government put CFS on trial and indicted Bartmann on 58 separate felony charges. While he was eventually acquitted—and received a special apology from the government—Bartmann still faced the fact that his company had been forced to shutter and his own personal net worth had been reduced to $0.

Pick Yourself Up, Dust Yourself Off

But Bartmann never gave up. Rather, he wrote a book about his business experiences and began touring the country, giving speeches to help inspire others down on their luck about how he had lost everything—except his will to pick himself up and try again.

“We all stumble and fall,” Bartmann says. “Maybe I've done it more cataclysmically than most. But you can learn so much if you open your eyes rather than blame everyone else and feel pity for yourself. You need to dust yourself off, turn around backwards, and learn what you could have done differently. When you can do that, big things can result.”

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That’s a lesson Bartmann continues to apply in his own life, particularly when it comes to CFS2, a four-year-old startup he founded that took the playbook for CFS, ripped it up and improved upon it.

“When I looked back at what I now call CFS1, I saw that we did good and helped people,” says Bartmann, who's also started several other companies in recent years, including Bill Bartmann Enterprises, which coaches people on how to get into the debt-collection business. “I thought we could do it again. Only, we could look back and learn what we could do more of to help people.”

The unique model that CFS2 uses—where team members actually look for ways to help people get out of debt such as by creating a resume, finding them a job or helping consolidate all their debt, all for free—has already attracted the attention of the national media because of the people Bartmann and his team have helped in his hometown of Tulsa, Oklahoma.

“We're having so much fun,” says Bartmann, who's also published an autobiography called Bouncing Back. “We're doing all the things we couldn't do the last time. Sometimes failure [has] a good result because you can go back and do things over again—and do them differently. It can be really helpful to have that hiatus to get an entirely new perspective than the first time you went down the path.

"Going broke provided me with opportunities to succeed," he adds. "What separates successful people from those who aren't is the way you deal with problems. And, as an entrepreneur, there will inevitably be problems. It's the nature of the beast.”

The World’s Best Teacher

Everybody knows that starting a business can be a risky undertaking: The odds almost seemed stacked against you when you consider that one in five businesses doesn’t even make it past its five-year anniversary. But stories like Bartmann’s prove that failure doesn’t have to be fatal—it can actually prove to be the kind of experience that makes you more successful in the long run.

“Failure is part of my business,” says Felena Hanson, founder and franchisor of Hera Hub, a shared, flexible, spa-inspired co-working meeting and event space for female entrepreneurs. “That’s right. I said it—the 'F' word, the word most people dread and so many of us hide.”

But don't be misled: Hanson’s business is thriving. She owns three successful locations in San Diego County and just signed her first franchise agreement in Washington, DC, with plans to open the East Coast location this winter. Even better, she has a five-year goal of franchising 200 Hera Hub locations around the world as a way to support some 20,000 women in the launch and growth of their businesses.

But Hanson says her entire business is a result of a series of failures. The first was getting laid off (she'd been working as a marketing director) for the third time in six years. The second was when she tried to launch her first small business with her now ex-husband—and lost some $50,000 when the business failed. 

While she admits she was upset for a while after the business bombed, she eventually reached the point where she told herself “OK, enough! It’s just money. You can get it back, so what's next?”

“I never would have discovered my passion for supporting female entrepreneurs and building Hera Hub if I'd continued with my first or second business,” Hanson says. “When I share that I fail almost on a daily basis, sometimes people laugh—they can’t believe it. But I am building a business model, which means that failure is going to be an integral part of our growth. Some of [the failures] will be minuscule, some grand.”

Hanson feels strongly that as a whole, people need to reframe failure because no business, idea, product or person is without mistakes. Imperfection is part of the human experience, she says, but it doesn't define it.

“I know some people who spend years dwelling on mistakes instead of seeing them as chances to strengthen your resilience and grit,” she says. “Mistakes don't mean you should stop. It means adapt, fix, pivot and keep going. Own your failures, share them, and move on.” 

Just Part of Doing Business

Amad Ebrahimi, founder of Merchant Maverick, a merchant review service in Orange, California, feels similarly. “Failure is a natural component of the practice of doing business,” he says. “Like any endeavor, business takes practice to master, and failure is a result of the mistakes we make during that process.”

Ebrahimi says it was the experience of building his now failed business, a website called CyberMotors, that actually helped him acquire skills like HTML coding and search engine optimization that he now uses to help him grow his successful current business.

“True entrepreneurs expect losses, so they mentally prepare themselves for them,” Ebrahimi says. “As long as one is using that insight as a form of validated learning, then the next venture will be more likely to succeed because of it. It's true that some failures are more disastrous than others, but persistence is key. The only time failure it's fatal is if you quit because of it.”

John Brady, founder and principal at Protem Partners, a business consulting and executive coaching practice in Philadelphia, thinks that Americans are obsessed with success to our own detriment.

“Success and achievement are nobody's birthright,” Brady says. “Yet I see fear keeping more people from achieving their potential than failure ever could. If you aren't failing, you have no concept of what you can be doing for yourself and for others. For every risk not taken, society misses out on a next great innovation or opportunity to improve the quality of life for all. That's an awfully large price to pay so that any one person can so fiercely protect their own ego and comfort zone.”

Brady also notes that it’s important to distinguish between failure and catastrophic failure: The former is a boundary we can discover and constantly push; the latter can be unnecessarily reckless. But he thinks that somewhere along the way, we've begun to think of success and failure as binary opposites of each other rather than part of something that's more accurately seen as a state of constant fluidity between the two.

“When someone reads my bio before I give a speech, they highlight my successes as a matter of etiquette,” Brady says. “The truth is, I go home more days feeling like a failure than a success because that is part of the ante for any achievement worthy of note, and I prefer it that way. Any game that's too easy to win becomes boring very quickly.”

If at First You Don't Succeed ...

No one would accuse Kisha Mays of taking the easy route to success. After excelling in high school in her hometown of Houston, Mays says she flamed out after arriving at the University of Texas San Antonio at least in part by hanging out with the wrong people and making less-than-ideal decisions—like buying a car and renting her own apartment. The result? She quickly found herself more than $61,000 in debt, despite her scholarship for tuition. “I honestly have no idea where the money went,” she says.

But after declaring bankruptcy, Mays got back on her feet and landed a job with an airline back in Houston. The only thing is, she badly wanted to move somewhere else. So when her employer offered her the chance to move to New York City, she jumped at the opportunity. Unfortunately, the job didn’t last long (“It was my fault," she says. "I couldn’t keep my mouth shut”), which forced her to yet again make the most of her circumstances.

This time around, Mays, then 24, aimed big: She started a business that would support the empowerment of women by holding a series of conferences that would include big-time celebrity speakers like Vanessa Williams, Suze Orman and Jillian Michaels.

After a few initial successes, Mays admits her ambition was her undoing: She was forced to cancel her third major event at the last minute, which not only brought her perilously close to bankruptcy again but also included the threat of lawsuits from Orman and Michaels for breach of contract.

“My problem was that I was so intent on going from crawling to running,” Mays says, “that I ended up crashing and burning instead.”

Failing that time hurt bad, Mays says, and she cried every day for a few weeks as she confronted her fears and doubts about herself. But she never quit. Rather, she turned the lessons she'd learned into a new business, Just Fearless, which focuses on helping women-owned business grow, particularly into international markets.

“Failure is something that happens in the past,” says Mays, who wrote a book, from From Failure to Fearless, about her life and experience in beating back failure. “But you have to get back up and figure out what’s next in your life. That’s why I don’t use the word 'failure.' I like to say 'lessons learned' instead.”

Finding the Good in the Bad

Certainly one of the most painful aspects of having failed at something is trying to cover up that it happened at all because your ego has gotten the best of you. When Mary Wenzel, founder of San Diego-based Write Law, a business that provides marketing education and assistance with creating website content for attorneys, was recently doing some business development work with other female business owners and the topic of failure came up, the group agreed that talking about their failures might take some of the sting out of them and allow them to move past them.

Wenzel took that idea and started a local "failure conference" for her fellow female business owners. The group meets once a month at a local restaurant to share both their failures and successes. Each meeting begins with introductions and a quick share of a member’s success story from the month. The remaining time is then spent giving each participant an equal chance to share a story while offering support and feedback to the others who share.

Outside of the monthly meetings, the members of the group support each other via a private Facebook page and are available to just listen or talk each other "off the ledge," so to speak, when challenges pop up. 

“I've found that talking about my struggles has enabled me to find solutions, and it takes the shame out of the mistakes I make as a business owner,” Wenzel says. “It's nice to know that I'm not the only one making mistakes, and by sharing the failures in a group setting, I get the recognition I need to keep plugging ahead. Our goal is to turn failures into feedback, and by sharing them, we really are able to do just that.”

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Photos: Getty Images, Courtesy of Bill Bartmann