A business having to close it's doors due to failure(not enough sales and profit), illness or ownership issues bums me out. Most of the time.(There are always a number of businesses in any town that miraculously thrive despite terrible customer experience or sub-standard product. Sometimes businesses get lucky and choose just the right high demand product and/or pick the perfect location. To that business I say: Enjoy it while it lasts. The world is changing and I hope you either change or go away.)
But I digress. There is potentially a silver lining to every business failure- A great opportunity for surrounding businesses to learn from it.
How often do we learn of a closing business, bemoan their passing via a few fleeting conversations or facebook posts, and then slowly (or almost immediately) move on without a thought about what lead to their demise?
I think as a community we can adopt a new ritual- A Merchant Post Mortem. Following the death of a business, we give it a couple weeks for mourning. Then we, a group of earnest merchants, business owners and service providers, meet to reflect on what happened and what could have been done.
It would be particularly great and a show of great courage for the business owner of said business to attend, but I'm not banking on it. In light of that, we'd be left to doing a lot of supposing, hypothesizing, and ideating- all of which would drum up a lot of creative energy. "What if they had done this, instead of that", or "You know, this reminds me of a problem we dealt with a few years ago...." or " what if they'd spent more money on this..." etc etc etc.
Maybe 4 people would show up to a post mortem one month, and 20 at another. Regardless, I think the discussion could be stimulating at a minimum, and potentially an awesome way to build more community, and generate more idea exchange and creative energy in our community.
I'm afraid we take the death of a business far too lightly (those of us that didn't own it). There's potentially a lot to learn from it. And for some, it may be a great opportunity to recognize that the very thing that killed the business, is a weakness or stumbling block that exists in their own.
What do all of you think. Too morbid to make a ritual out of it? Shoot, we should have started something like this years ago? I'd love your thoughts. I think it might be a smart thing for my local community. Post-mortem over local beers...
Its a pretty good idea and I know we'd all learn. I'd try to attend.
ReplyDeleteI would like to hear and participate in one where the owners are present. My father failed many times before making Millions with Shari's. It is the failures that helped him get where he is today. Heck he withstood his latest disaster having Callahans burn to the ground because he had gone through many disappointment in his career as an businessman. Keep me posted. I will be there.
ReplyDeleteI believe that this can be a huge benefit to so many businesses. I see this with my family business in California that has been in business 30 years and how they did not think of an exit strategy. So now my parents want to retire and sale the business but have not thought it through so the business is in limbo. I have tried to think of the future of my business and an exit strategy even though we are still a new and growing business. There is so much to learn from a business/owner that had to close their doors.
ReplyDeleteWouldn't it be even better for the community to save the business while it's still around? How about "Biz on the Ropes" =)
ReplyDeleteI'm with Donnie - we need to create something to be a resource before the business closes it's doors. It's easier to diagnose problems before the patient dies.
ReplyDeleteNot a bad idea. Smartups in Eugene offered a smiliar forum, bringing in founders and their startup failure stories. Though they may be tougher to stomach, mistakes have been a more effective learning tool than successes - mine and others.
ReplyDeleteDonnie and Birkman- I agree. There are a number of people locally that I believe would quickly offer help if a local business requested it. In fact, I'm aware of many examples where people have offered help with past businesses, (free help) and the owner didn't bother to implement, or simply refused to acknowledge there was a problem.
ReplyDeleteI think in most cases, pride gets in the way of admitting our failures or shortcomings and reaching out for help. Donnie or Birkman, how would you suggest establishing or promoting a "biz one the ropes" service/group in a way that would be well-received and utilized?
Another thought worth considering is this- there are a number of marketing and business development professionals in the valley that earn their living coaching and consulting businesses on how to survive and thrive. A couple come to mind that focus specifically on smallish businesses. Should a business be given that guidance and help for free?
ReplyDeleteI don't know, what do you guys think?
Interesting thought, however, there is more to learn from the success of the business (which failed) than the failure of the business. After all, the cause of the failure is just another way not to do it, but the successes of the business... well there you have something to build upon.
ReplyDeleteAlso, my experience tells me there is only one reason businesses fail: There was no passion to keep it alive. A business based on passion only quits when the owner of the passion dies (physically, mentally, emotionally or spiritually). A business NOT built on passion is a soul-less entity.
I cannot stop my reason for existence. If I am alive and have a setback, the business may suffer, but it cannot cease to exist until I do.
I'm not sure I'd want to do it unless the owner was there or we had a clear understanding of why the chose to close. Otherwise it could turn into rumor and guessing. Almost gossip at some level.
ReplyDeleteNow if one person took it upon themselves to interview the owner and bring it back to the group to review and learn from, that could work too.
Morally, I agree with Donnie. But I don't see how that works unless they are asking for help.
I agree about passion. Passion is behind everything that I do in my life. Passion is in my small business its in my films it is what keeps me going towards greater things. It would be intresting to find out who is doing the business for passion or just because they have this business. So people I see don't know how to run a business and just need help. Not everyone is willing to support then when they are having hard times. Not everyone can. I think one of the best things we can do is support local when we can and that is how they thrive and stay in business. Us the people support them just like the people support me, even if it is one a month or year or a hey check this place or this person out. It goes a long way
ReplyDeleteJason- I would agree with you and failed to think about it from that angle. In a number of local cases, I and I'm sure many others, knew the owners and had a good sense of why they closed up shop. That isn't always the case, and the owners perspective would certainly be valuable, if not necessary for a post-mortem to have significant value.
ReplyDeleteI agree that not every business owner will want to be "naked" while their business is still around, even if it's on its last limbs. Perhaps it would work out best to start with post-mortems -- then if you come up with things that "should" have saved the business, perhaps people will be convinced that you *could* save a struggling business.
ReplyDeleteI think that both the post-mortem and the on-the-ropes ideas are valid.
ReplyDeleteI would show up for either one and offer my more than plentiful opinion about other people business. ;-)
I constantly worry about the decisions that I make for my business and partners. And new discussions are always useful.
Chris is right that it's good to learn from major events like a business failure. I think a "Lessons Learned" series of talks would be a useful approach, and have the owner lead the discussion. Have it after enough time has passed that the owner is over the emotional reaction to losing the business and has had time to reflect. Otherwise we'd tend to hear things like the reason we failed is that the landlord wouldn't renegotiate our lease -- rather than the bad business decisions that were killing our revenue to the point we could no longer afford the lease we used to be able to afford. The Lessons Learned format can also include hearing about near-failures and how the owner turned things around, which is also very valuable. At the SAO (now WIN) tech pubs we've often had a "Lessons Learned" sort of presentation, and they tend to be popular.
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