Entrepreneurs need to have a love-hate relationship with mistakes. Nobody particularly wants to make them, and yet they’re an essential part of what makes any business successful. The best business owners learn from their mistakes, gaining the knowledge required to make a better decision next time. It’s not always easy, but you need to embrace making mistakes is you hope to succeed in a competitive marketplace.
Still not convinced? Three reasons why mistakes are essential to the long term health of any small company are below:
1. Mistakes Promote Greater Learning
There are many viable ways to learn business information. You can read business books, watch business-oriented TV programs such as The Profit on CNBC, or learn from the practical experiences of a trusted mentor. Add in podcasts, internet blogs (like this one!), and specific courses on any subjects you need help grasping, and there is no shortage of information out there.
However, nobody can learn everything they need to know from external sources alone. Perhaps you’re a visual learner, making podcasts pointless. Maybe you have a hard time digesting whatever you read, especially if you try to skim through it as a busy entrepreneur. There is nothing wrong with any of these approaches, but it’s folly to expect them all to be equally effective for every entrepreneur.
There are also a few lessons that won’t sink in until you have experienced them yourself, no matter how often you may have studied the topic beforehand. Mistakes provide concrete evidence of what works and what doesn’t, giving you valuable insight you can draw from later.
2. Promoting Positive Risks
If you want to grow, you need to accept risk. It’s a fundamental part of the entrepreneurship game. However, you are unlikely to take on positive risks (or those with a significant chance of helping your company) if you are afraid of failure. Put another way, you need to be willing to make a mistake in order to grow your company.
For example, it is probably a good idea for a retailer to invest in new technology that keeps more accurate tabs on inventory. It’ll help you know what to reorder and when! The system carries a significant up-front cost though, so there is inherent risk in trying it even though it’s likely to help your company.
This doesn’t mean that you should embrace every risk available to you. You should always do your homework first and evaluate the probabilities of any possible decision turning into a good one. The point is that you need to be ready to pull the trigger if your analysis indicates that it’s a good idea to do so.
3. Remember That It’s An Experiment
Business isn’t an area where you can download a template online and expect strong results across the board. Each company is a unique actor, so the best possible plan for one may prove disastrous for another. This is another reason why business books and the experiences of others cannot adequately replace your own mistakes as learning experiences.
A mistake illustrates one thing that does not and will not work for you. That means that you’re that much closer to figuring out what will! Successful businesses are experimental!
There is no reason to be afraid of risk-taking. While it’s certainly possible and even likely that you will make a mistake at some point, that failure can serve as an important lesson as you look to help your business thrive!