Why setbacks are your biggest gift as an entrepreneur

Everyone experiences challenges. Whether it's a problem that arises in your private or business life, it is how one reacts to these challenges and setbacks that determines your success as an entrepreneur. When I first founded Momentum Property with my wife Gisela and friend Lukasz in 2019, we ended up losing £400,000 of investors’ cash we had raised after a few deals went south. We had two options.

We could have either let that failure define us and we could have shut down the company to prevent any kind of humiliation or further failure, or we had the option to fix it and learn from it. We chose the latter. 

Believe it or not, losing £400,000 helped me become a better businessman and in this article I will take you through the steps you need to turn your setback into a leap forward. 

You can handle more than you think 

As entrepreneurs, we put far more than just capital and our reputation on the line when we establish a new business. We put our security, souls and a large portion of our heart on the line too. When we first started we made a lot of mistakes. Although in the moment they were not funny, in hindsight it is ridiculous how many mistakes we made. One blunder that stands out is one of our very first property investments. We chose to do a joint venture with a UK based company however the whole project turned out to be a huge disaster. Among other things, we’ve had issues with architects who have poorly planned properties that we were required to convert. 

Every businessman or woman has their own methods of coping with failure. Some decide to weep for a few days, take a couple weeks or months off, whilst some decide to buy a one way flight ticket to Thailand. Some entrepreneurs on the other hand would rather buckle down and put themselves back into the startup game. Regardless of how we handle failure, at some point we remind ourselves why we began in the first place. Sooner or later we are all determined to redeem ourselves and transition that failure into success.

The rate of learning over time 

I once heard that the only way you can fail at failing, is to learn nothing from the failure. Learning from our mistakes is essential in our private and professional lives. If you have suffered a setback, it is important to take a step back and reevaluate your plan. Try and find out where you went wrong, write it down and keep it in mind - it’s all about trial and error. 

We were on a high when we had started, we were raising finance and making great deals - what more could a young entrepreneur ask for? And then all of a sudden, we had lost almost half a million pounds in our first four deals. We panicked, lost focus and had no idea what our next steps were. We were told by our accountant to declare ourselves bankrupt and leave the investors to their fate, however we decided not to do that. We carried on and managed to get our investors money back along with a token of profit paid to them. We did everything we could to turn the situation around and gained so many positives. People began to ask us for advice regarding the turnaround of deals and after several false starts, Momentum Property was born.

Of course with failure comes an undeniable amount of stress and uncertainty and I wish we could have avoided all that. But at the end of the day, having learnt from our mistakes we are now able to face and rise from any challenge thrown towards us. I learnt so much in that time, and my business is better, and stronger for it.

It’s okay to ask for help 

When you have worked so hard to start your business from scratch you become tempted to do everything yourself. It is important not to shut people out and listen to what your close ones have to say. Remember, no man is an island. We initially had a mentor however that did not end well due to lack of communication and we unfortunately put all our trust and faith into that one person. When we lost £400,000 of investors’ cash we tried to seek advice from almost everyone we knew. That was when we had to take a step back, information overload does exist however trusting your instincts and listening to your gut also plays a crucial role in getting back out there and turning that failure into success. 

We were lucky to have met Kim Kiyosaki — Author of Rich Dad, Poor Dad during this tough period. She advised us on how to restructure our company around - she was a lifesaver. Have an open mind when it comes to listening. Take advice from family and friends, sometimes it’s good to get a third person perspective, it helps you restructure your thoughts. But remember to also be selective, and trust yourself in the process.

Enjoy a new beginning 

Try not to think of starting over as a setback. An optimistic entrepreneur sees it as an opportunity. Once you have accepted your mistakes, learnt from them and made your choice, put together a clear plan for growth. Let yourself enjoy this new journey, confident that you are smarter, wiser and an even tougher entrepreneur than when you first started. 

There is no doubt that experiencing a setback can be difficult to overcome, however the way you deal with setbacks is what defines you as an entrepreneur. Inviting new ideas and using that setback as a platform for growth will allow you to emerge stronger than ever.