Recovering from the Loss of a Business: Recovery, Reversal, and
Coping Strategies
Losing a business is overall, akin to the "death" of a loved
one. So much of a business owner's personality and hard work
have gone into a business, that when tragedy strikes, for
whatever reason and the business is forced into bankruptcy or to
close, the emotions felt by the business owner are nothing short
of serious and all encompassing!
Since losing a business is considered a "major life stressor",
along with divorce and the death of a loved one, a business
owner that loses a business can be just as emotionally
devastated. With this in mind, it is appropriate for the
business owner to take into account the five stages of grief
that do occur in a major life event or "stressor". These stages
are according to the work of renowned Swiss born psychiatrist,
Dr. Elisabeth Kubler-Ross:
1. Denial. This stage is a healthy stage when the individual
asks the question, "Why Me"?, and develops strategies to develop
defenses against the impending stress.
2. Anger or Resentment. Blame occurs in this stage.
3. Bargaining. This is a "truce period" where an individual
makes "deals" in their minds, if "only" things don't play out
the way they are bound to do so.
4. Depression. This is the real grief phase, and an individual
will primarily feel discouraged and hopeless.
5. Acceptance. This is where reality is dealt with and the
process of "going on" begins. Withdrawal from others may occur
temporarily here.
Although Dr. Kubler-Ross developed the five stages primarily to
be used when dealing with terminal illnesses that lead to death,
her work can readily be applied to many major life stresses,
including the loss of a business. In addition, not all
individuals go through each stage routinely in order, with some
skipping stages, or staying in one stage longer than others.
Business owners that suffer the catastrophic loss of a business
need to allow themselves the same flexibility and time for
acceptance that other major life stressors require. They need to
work through the five stages until the fifth stage, acceptance,
is reached. They also need to put the loss into perspective if
they can, and determine just "why" and "how" the business
faltered and eventually failed.
With defeat, sometimes knowledge is attained, and if a business
owner can work through the stages of grief successfully, and use
the knowledge attained for enlightenment, then perhaps they can
successfully start another business in the future, and achieve
better results.
Business owners should make a list after they are on their feet
again of exactly "what" went wrong, and methods of prevention in
the future, as they can then use this to their advantages. The
list can include such information such as:
1. Why the business failed overall: Was it the wrong type of
business for the wrong type of clientele? Was it targeted
incorrectly? Was it too unusual to succeed? Was the marketing of
the business incorrect? Were the expenditures too great? Was the
business plan and outlook faulty or realistic?
2. What mistakes led up to the failure: Did the business grow
too quickly or too slowly? Were there actual methods in place
for prevention, or was the business "reactive" rather than
"proactive"?
3. What can the business owner correct/rectify in the future?
This is the most important question, and a list of all methods
that may be used as a measure against future failures should be
made.
Business owners need to give themselves time to heal and sort
through their feelings, though. Any loss is so emotionally
draining, that jumping right back into the "business fire" with
another business is not necessarily a good idea until the
business owner has recovered their energy and worked through
their feelings of grief completely.
Defeat can be a learning experience, and many successful
business people have also experienced their fair share of
defeats and loss of businesses. Turning the "negative" of the
loss of the business into a "positive" learning experience will
soon find the business owner recovered and moving onto the next
positive step in their entrepreneurial lives!