According to Emma Jones of Enterprise Nation and SME Rep for Crown Commercial Service 311,722 startups were founded in the first 6 months of 2017 and expectation that this number will reach 600,000 in 2017. This is a great statistic and worthy of praise indeed. But what about entrepreneurial recovery?
However, we also know that a large chunk of these fail (the figure is disputed widely and I will not enter the fray today). But for argument sake let us say 50 percent fail in the first year. That means 300,000 people have failure impacts. What are these likely to be? To be able to assist with Entrepreneurial Recovery first one must understand the issues. Here are Bouncepreneur’s Top 10 Entrepreneurial Recovery Challenges.
- Financial, quite obviously the individual will be very short of money in most cases. Their spending power will be significantly reduced and weekly spending on groceries, clothes and outings will be curtailed, so mounting an entrepreneurial recovery is very challenging indeed.
- Credit, we are yet to speak to an entrepreneur whose venture failed who has said his/her credit rating has not been affected by the loss of their business. Financing a car for example becomes significantly more expensive.
- Housing, pressure on mortgage payments is the biggest financial pressure on failed entrepreneurs, with many unable to pay at all or to become entirely dependent on their partner to cover bills. Not having a roof over your head makes concentrating on an entrepreneurial recovery a massive feat of will.
- Relationships, relationships come under significant pressure. Although couples who have tried a small business together tend to rally best. When the non-entrepreneur partner becomes the sole bread-winner pressure tends to mount and relationships crack. Going for a second startup following a failure is often considered “out of the question” by a partner who may insist their partner finds a job.
- Children, the standard of living for children in homes where businesses have failed tends to plummet. Often from comfortable existence with holidays, outings and clothes taken for granted, these non-essential items tend to quickly go by the wayside.
- Getting a Job, getting a job is the standard Plan B when a venture fails. It is the backstop position for entrepreneurial recovery. But, it may not be so easy anymore. The use of credit rating linked candidate screening software means many failed entrepreneurs are applying for dozens of jobs in FTSE 1000 and other major enterprises and having ZERO chance of passing the credit rating sweep. This is actually in public view and an absolute disgrace, wasting millions of hours of candidate time.
- Health Mental, Entrepreneurial Grief is a recognised phenomenon for entrepreneurs whose venture failed. It can be likened to the loss of an immediate family member. Often it is more destructive to the individual than the loss of the business itself.
- Health Physical, weight loss and gain have been reported by Bouncepreneurs as symptoms of the post business failure period. Drinking too much has been reported by significantly more female than male entrepreneurs.
- Load on the State, a failed entrepreneur goes from being a net contributor, to a drain on the state in terms of unemployment and other benefits and NHS care. They also have significantly reduced personal spending power, which in itself reduces the strength of the economy.
- Society, failed entrepreneurs feel shame. This is more acute it seems if they live in small communities and less so in bustling cities. They tend to withdraw from local activities and become less social in general. Several have reported that they no longer use local shops and amenities near their homes.
There is a great opportunity to return many entrepreneurs back to success and happiness in new ventures. The benefits of doing so are clear to see
- Provides the citizen with income, purpose and happiness
- Improves the economy, creates employment and skills
- Reduces load on government health and support services
Michael Allen of Bouncepreneurs suggests a new joined up approach to assisting entrepreneurial recovery based on helping entrepreneurs whose ventures fail bounce back to success and happiness.
Michael Allen has written a book “Bouncepreneurs Successfully Bounce Back after Entrepreneurial Failure,” available on Amazon Kindle.