Running a business often has three components: the good, the bad and the ugly.
The good happens when your company is thriving. The bad tends to occur behind the scenes, like budgeting for a high cost of advertising or spending long nights going over payroll. The ugly can range from 100-plus-hour workweeks to betting your life savings on your startup — and struggling to get it off the ground.
CNBC Make It spoke with a group of highly successful entrepreneurs about how they recovered from major career setbacks. Here are some of their top tips for weathering unexpected hardships:
‘Be comfortable’ trusting your gut
If you’re confident that your business idea will be successful one day, don’t quickly throw your hands up when problems arise.
This mindset helped Bogg Bag CEO Kim Vaccarella after she lost her kids’ $60,000 college fund on bad inventory. Vaccarella founded her business as a side hustle in 2008, and after selling out of two limited runs of stock of her waterproof tote bags, she ordered over 1,000 more in 2012. Her factory shipped her defective bags — functional, but covered in black streaks — that she “couldn’t sell,” and she didn’t have the money to buy more, she said last year.
″I went for broke and spent my kids’ college money and bought a full container’s worth [of bags], and they were all bad, so my heart sank,” said Vaccarella.
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Vaccarella knew she had a good product, but lacked the funds to recover quickly and worried it was the end for her business. She decided to donate the bags to victims of Hurricane Sandy. Unexpectedly, some of the recipients came back to her, asking: Where could they buy more?
The new demand pushed Vaccarella to find a factory and secure a $120,000 loan from a family friend to get Bogg Bag back up and running. The business now brings in roughly $100 million a year, and the ordeal taught her to “be comfortable” trusting her gut, she said.
Success can require a relentless sort of confidence, she added: “Somewhere in my mind, I think that I can do anything.”
Don’t be afraid to take a detour
When you hit a snag, you can sometimes benefit from thinking creatively and changing your approach. Take it from Karen Robinovitz and Sara Schiller, who co-founded The Sloomoo Institute, an interactive slime experience — similar to a museum or “play space” — in October 2019 after realizing just how therapeutic playing with the colorful goo was.
They put $600,000 of investment money towards launching their slime business, and sold $1 million worth of tickets in their first week. Then came the Covid-19 pandemic, five months later. The business let go of roughly 90 part-time employees, keeping just the co-CEOs, a bookkeeper and their resident slime-maker.