Overcoming the fear of failure when starting a business
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Posted: Thu 6th Mar 2025
15 min read
On 3 March 1933, in opening his first inauguration speech, Franklin D. Roosevelt, the 32nd President of the United States, started to outline his plan for dealing with the Great Depression by saying, "the only thing we have to fear is ... fear itself."
In other words, fear itself can prevent vital positive action. Like being frozen on the spot with fear instead of running away.
If the fear of failure is what is holding you back in getting your business started, it might be worth keeping these words in mind as you consider the leap into the unknown.
The unknown
It could be argued that 'the unknown' is the most frightening thing.
Will they buy?
Can I sell?
Can I sell enough?
How will I handle the workload?
How long will the money last?
Will I lose the house if it all goes wrong?
The list can seem endless. However, there is one simple strategy that can deal with all of these questions and dear reader, I am about to reveal all.
I will start with another famous speech from an American. This time it was Donald Rumsfeld, the United States Secretary of Defense talking about the Iraq war in 2002, who in a briefing brought up the idea of 'known unknowns' – things we know we don't know – and 'unknown unknowns' –things we don't know we don't know.
Both 'known unknowns' and 'unknown unknowns' can be important sources of fear and we have to find ways of dealing with them.
Known unknowns
So let's just start with dealing with a list of things you know you don't know.
Get a physical or digital notepad out and just write out a list of all the things you know of that you don't know the answer to. Don't try to solve them as you are writing the list, just get the list down first.
Spend some time on this. Then leave it for a while and let it sit in the back of your mind for a day or two. New things will come to mind when you least expect it – write them down as soon as you think of them.
Keep a notepad on your bedside table to write things down if they come to you in dreams, or restless nights.
A nice long list of unknowns is good. It means you are thinking it all through in enough detail. If the list is not very long, get friends or family to help you add to it.
Once you have your long list you might want to prioritise it in some way so you can deal with the important, or most difficult, issues first.
Now work your way down the list and see if you can find the answers to each unknown in turn. This is a hard task, but the internet is there to smooth the way and make many research challenges relatively easy. The trick, of course, is both asking and answering the questions in the right way.
Here are some tips on answering some common, tricky, 'known unknowns' to get you started:
Will they buy?
If you have a product or service you believe in so much that it is making you want to start a new business around it, the best way to test if they will buy is to try to sell it.
The best time to do this is ideally before you give up the day job. It is also better to sell to a stranger rather than a relative or friend. The referral may come from someone close, but you need to make sure they are buying your offering because it is the right thing at the right price for them, not because they owe someone a favour.
This is a good test, but it will also start to build your confidence. Getting that first sale is a great feeling that brings its own momentum that you can build on.
Can I sell?
If sales has never been your thing in the past, it is easy for this question to get in the way of progress.
All sales people will tell you the first sale is to yourself. If you don't believe in the product or service in some way, you will have an uphill struggle convincing anyone else.
If you have a product or service to sell that is so good that you are considering starting a business with all of the risks associated with that life, then you have already passed the first test. You have already sold the product or service to yourself.
The chances are that, if you have tested the market to see if you could make a sale, it was your enthusiasm that pushed it over the line.
You should, of course, consider training if the job is selling direct and other help if you are marketing online. Add in your own enthusiasm and you will have a potent mix for future success.
Can I sell enough?
This is an important question to answer as it will dictate just how big your business can be. Getting a good understanding of the market is critical.
If your product is a new and better version of products or services already on the market, you will be able to research the market and quantify the potential.
If the idea is completely new, you will have to consider conducting some market research either personally, or with professional assistance.
The alternative is to look at the market for something similar. For example, when the first iPhone was launched, it was completely new, but the market for Blackberries and other mobile phones could be quantified instead as the iPhone was intended as a direct replacement.
How will I handle the workload?
This is a tricky question to answer as it means you have to dig into your personality to find the answer. Too often well-intended people lie to themselves about just how committed they will be.
It is also easy to say you will commit to whatever it takes only to find, when your partner is packing their bags to leave you, that level of commitment might have been too much.
You will have to work hard in the early stages to get things off the ground. Make sure your loved ones are onboard with you and set limits on the hours you will commit per week for both of your sakes. You will need some support, so make it easy for people to support you.
Always make sure there is some slack in the week, you can fall back on and use if things go wrong. By slack I mean ideally at least one day off. If you are 100% committed, you will have no reserve time for emergencies – and there will be emergencies.
You will have to be mentally tough, but building into your plans the recruitment of staff to delegate to in the future will not only take pressure off, it will give you something to look forward to if and when things become excessively challenging.
Watch this webinar for a free cash flow template for your company to use:
How long will the money last?
This question is easier to answer as it can be revealed in a cash flow plan. Having a fully detailed plan will help you explore multiple scenarios, both good and bad.
It is also a fantastic tool to help you understand if you have performed as you expected and adjust plans accordingly.
With a good cash flow forecast you can see any failure long before it happens and take timely action to correct things before it is too late.
Will I lose the house if it all goes wrong?
There should be a simple answer to this one – NO!
The risk of losing a house should only be the case if you have taken on too much debt, or made the mistake of giving excessive personal guarantees on a business loan.
Many will take the big risk for the big opportunity, but my advice is don't, as there is always another way.
Make sure the new business is formed as a limited company as soon as you can and put as many barriers as possible between your personal and business life so that, if/when things do go wrong, you can walk away with minimum personal damage.
Remember that, statistically, there is more chance of failure than success, but if you do fail the first time, you should put yourself in a position to learn the lessons and apply them in your next venture.
Always be prepared, and able, to walk away from a hopeless situation.
Unknown unknowns
Hopeless situations can come from an unknown unknown: a fire, an unexpected flood, a financial crash, a pandemic, a war!
In a time of accelerating climate change, in a small interconnected world, which is getting smaller, all of these things may come at us out of the sun at any time. There are many examples of instances to call on since 2020.
Dealing with these potentially disastrous events up front is an important part of dealing with the fear they bring.
Here are some things to put into a to-do list to prepare for the completely unexpected.
Loss of premises [eg: fire or flood]:
back up all data and records off premises daily
have at least a laptop to fall back on at home
consider some spare kit for production/delivery
consider a deal with a similar or complementary business to back each other up if either is in trouble
make sure insurance covers all kit and eventualities – check the small print!
Pandemic
back up all data and records in the cloud
make sure backed up records are instantly accessible, no matter where you are
have at least a laptop to fall back on at home
consider how an alternative business model may work [eg: pubs doing home deliveries]
take out personal insurance to cover incapacity
work to maintain a decent-sized cash cushion in the business
consider how the business could work with fewer people
War
back up all data and records
have at least a laptop to fall back on at home
ensure a decent-sized cash cushion in the business
consider how the business could work with fewer people
plan for alternative suppliers [don't rely on single sources from single countries]
plan to trade in different markets to work around the war zone
Loss of key personnel
include yourself on this list – in the early stages, you are the most key of all
consider appropriate key personnel carry-over insurance
have robust employment contracts to prevent employees stealing data or setting up in competition
systemise the business to remove reliance on individuals [including yourself]
The above is far short of fully comprehensive. The important takeaway is to develop your comprehensive list and work through it systematically. You will see common elements in each of the examples above, so follow that thread and make provisions to make the business as robust as it can be if the unexpected happens.
Planning for every eventuality will help you prepare to deal with most situations. The preparation will help you both face up to your fears and take the right action to remove them.
Finally on this subject, Mike Tyson once said (something like): "Everyone has a plan till they get punched in the head."
Thinking about what you will feel like, how you will react and what you can do when you are punched in the head is a really good way of dealing with the fear of getting in the ring.
Remember that adage: perfect preparation prevents poor performance. It also helps deal with any fears you might have when starting a business.
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