November 8, 2018
As an Entrepreneur, Failure is Your Wisest Teacher
For every entrepreneur, one thing is true: even when you’ve accounted for all imaginable risks, failure is still possible.
After seven years of 60-hour workweeks with a young family at home, I was ready to move on from my position as sales manager at CBS. I became a partner at an advertising agency, trading in a commitment of time for a commitment of money.
The new agency’s growth was rapid and consistent, primarily due to my background in broadcast and knowing how to purchase media effectively — which opened doors for new clients, and before long we were one of the largest agencies in Seattle. We had clients across various industries including Citizens Federal, Taco Time, Pacific Fabrics, a Cadillac dealership, and even Twentieth Century Fox Films. Our work with Twentieth Century Fox included special promotions and a memorable launch of The Return of The Jedi. At the time, the longevity of the company seemed certain.
“Success is satisfying, but failure is often our wisest teacher. All it asks of us is to swallow our pride and learn from our mistakes.”
In the midst of success, it’s important to have a plan in case of unexpected challenges. Three years into our growth, one of my partners became disabled, requiring that we buy him out of his share of the company. This buy-sell agreement was unfunded, as we were not expecting to need one so soon, and his buyout ended up using all our available assets. We were forced to close our business, the last of our money going towards severance for our employees. This unfunded buy-sell agreement was a financial risk that I didn’t even know I was taking as an entrepreneur — we had been so focused on growth that we failed to protect the company in case of unforeseen disaster. While I may have lost the agency, I gained a valuable reminder to always prioritize the protection and resilience of any business against unforeseen challenges.
My struggles were not in vain. I joined on at an insurance company, bringing with me a passion for succession planning and an eye for overlooked risks. All of our buy-sell agreements were funded, and with that peace of mind we could expand and know that we wouldn’t fail in the same way twice; and neither would any of our entrepreneurial clients. Success is satisfying, but failure is often our wisest teacher. All it asks of us is to swallow our pride and learn from our mistakes.
Author: Michael Lyman