I’ve Had Failed Businesses: How I Took Those Lessons and Made Myself Rich

She has one too many deadlines to deal with

Some business coaches will tell you that a few failures are a prerequisite for launching and scaling a successful business.

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“Entrepreneurs get rewarded for long-jumping over burning fires and building bridges so that the people behind them can get across,” summarized Chris Gleason, founder of Simplicite Tax Loans. “The rewards are greater, and so are the risks.”

Today, the entrepreneurs below have reached sustainable success. They’ve gone through their share of failures to get where they are today — and learned the following lessons that they credit for their success.

1. Be Careful Who You Partner With

“I started my first real business in 2006,” explains Gleason. “I took what seemed like naturally sage advice: find a mentor. I found a retired banker, a friend of a friend, who had had a tremendous amount of experience and success over his years. I was in my twenties and it seemed like a match made in heaven.

“We opted to become partners in the business, and I thought he bring both wisdom and resources to the operation. Unfortunately, I didn’t know that my new mentor had run into financial issues in his golden years. What seemed like an older man helping out a young guy became something different entirely. Long story short, my mentor eventually stole from the business and from our investors once his personal financial situation became dire,” Gleason revealed.

“My current companies now manage a team of people that deploys over $200mm annually, but they’re really my second or third attempts at building a substantial business. My previous attempt, despite my best efforts, wound up in lawsuits, major financial losses and some people being very unhappy,” he said. “Business partnership is right up there in difficulty with marriage. That doesn’t mean it can’t work out for the better, but it can get very, very complicated.”

2. Watch Out When Hiring Friends or Family

That same caution about who you partner with also applies to who you hire.

As managing director for Wells Fargo’s Business Owner Advisory Services, Tracey Gillespie has worked with hundreds of successful entrepreneurs. But none were instant successes, despite outward appearances.

“I had a client who started her supplies business solo but quickly hired those she trusted most: family and friends. Over a few years the business grew in revenue but was only moderately successful in profitability. She was perplexed and sought professional business advice,” Gillespie noted.

“After reviewing the financials and interviewing the client and her trusted few key employees, among them a longtime friend, the consultant had a tough message for her: her best friend was underperforming in her chief operations role, and it appeared this was not immediately fixable. The consultant recommended the friend either be reassigned to another area of the company, or be let go, and a new COO be hired. This new hire could take the company to the next level of performance, improving operations, supporting top line growth and enhancing profitability.

“She was extremely hesitant, but ultimately encouraged her best friend to find opportunities outside the company,” Gillespie said. “Fast forward 12 months: the business is thriving, my client is happier running the business and the new COO has exceeded expectations. The friend found a role at a new company that suited her skills better and she too is thriving.”

3. Know When to Persevere vs. Pivot

Lisa Rizzo has heard the siren song of entrepreneurship since charging her neighbors to shovel their driveways when she was ten years old. In her adult life, she got an early taste of fame as a cast member on MTV’s “A Shot at Love with Tila Tequila,” and immediately looked for a way to use it as a launching pad for a business.

“I wanted to capitalize on my TV exposure and thought starting a t-shirt line would be a no-brainer,” Rizzo said. “I printed designs, created a website, promoted my line at events, and shipped shirts to fans. But as the initial fandom buzz died down, I quickly realized my shirts weren’t selling. Sales dwindled, and my vision of owning a t-shirt empire began to fade. This is the critical moment that determines success in business. Instead of clinging to something I no longer had a burning desire to build, I knew it was time to pull the plug.

“There’s a significant difference between persevering through the obstacles of building a business and recognizing when it’s time to pivot. The passion was gone, so it was time to pivot.

“My true passion lies in a sport: softball. Softball was my escape, my therapy, my everything from when I was a kid. I played NCAA softball and there was never a game where I didn’t feel alive, a feeling one cannot put into words. It was this feeling that I wanted to experience again: but instead of playing softball, I wanted to build a softball training empire.

“Fast forward to today, 2024. I own one of the largest softball training companies in the country, Challenge U. Softball, with a staff of over twenty women who teach each athlete the game of softball and, more importantly, the power of certainty, setting burning desires, and empowering self-talk.”

4. Do Market Research Before Launching

Today, Luv Tulsidas owns a successful AI business. But he didn’t start there.

“Years ago before starting my company Techolution, I started another company called HomeFellas. It was a mobile/Internet platform enabling homeowners to find contractors, request pricing comparisons, and hire service providers quickly without site visits. I immediately started hitting the pavement to build what I thought was an ‘amazing’ business idea.

“My confident belief that millions would want this service rushed me to get started without proper research. Although the initial response from homeowners was fantastic, the business model crashed quickly because I overlooked the other side of the equation: the contractors themselves.

“Pre-2010, smartphone and internet adoption was limited among construction workers, making my web-based app pretty much useless. Reflecting on this failure, I realized that my mistake was jumping into execution without thorough market research and failing to be a seeker of truth. This lesson shaped my approach to building market-aligned solutions at Techolution.”

5. Trust Your Gut About People

“My business failed and I lost everything because I didn’t trust my gut,” shares Blair Huddy, founder and CEO of Hudson Davis Communications.

“I hired someone to oversee the company while I got married, and I got a really bad feeling about the person I hired but I couldn’t justify it so I just ignored it. I hired him in March 2022, got married July 7, 2022 — and then had a stroke July 10, 2022.

“While I was in the hospital, this person saw an opportunity and convinced my clients that I was incompetent and unable to keep working for them, so he moved their contracts into his own LLC. I walked out of the hospital with nothing. Compounding the problem, my HR person missed that he never signed his non-compete agreement. I had to start over completely from scratch, with a brain injury.

“Always trust your gut.”

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This article originally appeared on GOBankingRates.com: I’ve Had Failed Businesses: How I Took Those Lessons and Made Myself Rich