Question

Four years ago, three co-workers and I bought the software development firm we worked for, but business has slowed down and the company is failing. My 10 years working for this previously successful company is the only major work experience I have. How will an employer view a business failure? How can I sell my employment qualifications even though my own business isn’t succeeding?

Nick’s Reply

Not a lot of Ask The Headhunter readers have owned a business, but this is an interesting question because at its heart it applies to anyone who is trying to make a job or career change after a failure.

The answer is all about how to shift from failure in one area of your work life to success in another. So whether you’re a failed business owner, or a manager who couldn’t really manage looking to return to a staff job, or a widget designer who tried and failed at sales and is ready to go back to making widgets, please read on.

Business failure is not professional failure

Don’t confuse your technical skills with your ability to manage a business. Failing at running a business doesn’t mean you’re a failure professionally. In your interviews, focus on what you do best and pursue jobs along the right lines. This applies to anyone — not just programmers or technical folks. Don’t get bogged down in your failure. If you tried and failed at management, remember that you still have a solid record as a software developer.

Business failure is common

What if the business you ran was a consulting business? Can a self-employed consultant get a regular job?
In a world where everyone wants to be an entrepreneur, few actually try, and most who do try, fail. Many of the employers you interview with will understand that. Our business culture has never been so comfortable with the idea of people trying and failing to run their own businesses (or trying and failing to pursue a new career). So, don’t expect negative reactions.

Of course, you will get some knocks for your failure, but take that in stride. Be careful to present your failure with candor and good humor.

Business failure is not the question

Remember that the key questions the employer has for you are not about how you’d run a business. They’re about whether you can do the job at hand. So turn the conversation to your prowess as a developer. Show how you will use your skills and experience for the employer’s benefit in software development.

Another key question will have to do with your work habits. Employers sometimes presume that a business owner will find it difficult to take direction and to be managed. It’s up to you to demonstrate that you can work for the manager and be a good team member.

If you’re asked why you’re leaving your own business, just ‘fess up.

How to Say It:

  1. I’m not a great business owner, but I am a great software developer. (Or, I wasn’t great at selling widgets, but I am great at building them.)
  2. My technical talents helped make the business successful before I bought it.
  3. I no longer have aspirations about running my own business. I got that out of my system. I want to be part of a team that works well together.
  4. My goal now is to be the best software developer I can be — and to contribute to my team’s success.
  5. Now that I’ve learned designing software and producing great code are my strong skills, I’m all the more focused on doing exactly that.

When meeting with a prospective employer, demonstrate that you understand the difference between what you failed at, and what you want to do next. Don’t be afraid to be blunt with an employer.

How to Say It

“You focus on running the business; I’ll focus on delivering the best product anyone could produce.”

(Or selling the most product, or running the most efficient production department, or producing the most effective marketing materials.)

Convey that message as honestly and compellingly as you can, and I think you’ll get a good reception. Stick to talking about the job you’re going after. Focus on the work to be done, not on your business failure. That’s how you let the employer know you’re not stuck in the past. If you start getting defensive (or too detailed) about your old business, you’ll put the employer off. (Check these two magic interview questions you can use to put the interview on track.)

We all have failures, but the smartest people reveal their strengths when they admit their failures. They show they’ve learned from the experience. They stop talking about the failure and eagerly move on to the next challenge.

I wish you the best.

Have you ever run a business that failed? What was it like getting a job? How would you advise this reader? What would worry you about hiring someone whose business failed? What other kinds of failure have you recovered from?

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14 Comments
  1. An employer may appreciate having an employee who knows what it is like to try to run a business. The understanding gained from being an entrepreneur, whether failed or otherwise, can make that experience a positive rather than a negative in an interview.

  2. I have been in exactly this situation after having failed at two business ventures that were ahead of their time. Wise counsel gave me advice similar to what Nick has mentioned here. They mentioned three applicable sayings: 1) We learn more from our mistakes than we do from our successes, 2) The vast majority of today’s very successful entrepreneurs have failed at least twice before hitting the jackpot with the businesses that made them success stories (re-read point Nr. 1), and 3) Thomas Edison was asked how he managed to keep positive and stay on track after failing nearly 10,000 times before successfully inventing the lightbulb. He replied: “I did not fail 10,000 times. I proved 10,000 things that do not work and by deduction found what does”. I took these one step further and mentioned during interviews that “I am quite far down the learning curve on building international sales growth (my area of expertise). By hiring me you are getting all the benefits of that experience without having to pay for the mistakes that I, and many others attempting international growth, have made.”

    And those previous failed ventures have paid off for me. I left my well-paying job in late 2019 to start my own business. Despite all of the challenges that Covid-19 have brought me, I am still solidly in business and it is easy to see how it will boom as soon as the lockdowns are lifted. It is all about perseverance and being able to differentiate the correct and wrong paths based upon the experiences gained. I could not recognise those correct and wrong paths in my earlier years. Now I can see them much more clearly. Thank God for those previous “failures”!

    • @Brian: Well put! Unfortunately, many employers seem to worry that the qualities that led someone to run their own business will make it difficult to manage them if hired. Former biz owners are regarded as mavericks who are tough to control and who will undermine authority. Of course, this is not true most of the time, but it seems to be a bias. Good luck killing it with your new biz!

  3. I think the writer should not admit to “failure”. I don’t think the word”fail” should ever come up. I suppose the the business declined because of the economy during covid. If so, I’d say “my business declined because of the economic conditions during the pandemic.”

    For myself I’ve been laid off the last few jobs. “Why do you keep jumping jobs”. “Every single one has been a lay off” with a shrug of my shoulders.

    Just shrug and continue with here are my capabilities.

    • @Bob: I’m not suggesting a candidate tell an employer what the employer wants to hear, because I think the new hire would suffer for it later. But I do think offering the explanation you suggest would lead an employer to believe the candidate would soon quit to resume their own biz when the economy improves — and decline to make the hire.

      • Ok but I’d add “My business declined because of the economic conditions of the pandemic”. I don’t plan to open a new business anytime soon.

  4. Failure. Nasty negative word. First thing I’d advise the writer is to do some attitude adjustment. I can’t come up with the exact quote but I recall reading a quote from one of Liz Taylor’s ex’s. Business guy. Who made & lost a few fortunes. He said that he, and his start up pals, never used the word “failure”. They didn’t fail, they “screwed up”.
    Took what they learned and got back up on their horses and tried again & again. Until they succeeded. And for a time, each effort was a success until it wasn’t. And yes Nick is right, that thinking is for you, better kept to yourself for your morale building. as a hiring manager could easily conclude that you brought your horse with you ..to jump back on & ride away.

    For public discussion just leave it at this thought, Failure can be a training ground for success. It says 1. you tried something most of us didn’t or wouldn’t including most likely your interviewer..meaning you are risk tolerant..which has value to the right boss…& 2. You learned something from it that has value..which can be turned to good use to the right employer e.g. a start up. and yes 3..you didn’t lose the skills you have, which likely were enhanced .

    Context. Who are you talking to? In a privately owned business, talking to a owner. a savvy owner will especially appreciate that you have experience of great value…we can call it don’t-let-this-happen-to-you experience. plus with the obvious ability to think like the owner where others would be clueless.

    Big Corporate? I knew of one successful hi tech corporation, who highly valued former business owners, who “screwed up”. That experience would move you to the head of the line. Never mind their day job skills, They saw rare managerial value in business loss & felt it would make them better, smarter people.

    As a recruiter I’ve met several people who previously owned their own business, or presently owned one (wanting to get out). Personally it didn’t bother me nor my clients. I think the experience invites respect much more than concern..other than Nick’s point about future attrition. Remember that biz concept bantered about at times..”freedom to fail”? All that the writer & his partners did was grant themselves that freedom. From which they learned a alt

    But I confess I don’t spend many cycles trying to predict future intentions, nor much patience with interviewers who do.

    I also know a # of people who did start businesses that didn’t ultimately work out. And watched them move on & succeed.

    I also confess that I personally respect people who’ve had the intestinal fortitude to take a shot at starting up an enterprise. If their foundational professional skills pass muster, I’ll advocate for them strongly.
    Because I think everyone’s basic job is to help make the enterprise succeed, and people who personally gave their all to do so..really really have demonstrated they understand that. And they will be a good hire for any company.

    • @Don: Like you, I admire anyone that takes a reasonable risk to do something new under the sun, and I don’t count failure against them. But if I were interviewing them for a job, I’d assess two things.

      First, why did your biz fail? Telling me that it was all due to external forces (the economy, the market, etc.) wouldn’t fly. And failure is failure, call it what you want. But the use of euphemisms won’t fly with me. That tells me you will prevaricate when you fail at something working for me. Be honest. Be accountable. I need to know I can trust you. I’d rather have an employee who blows it royally while trying to pull off a win and tells me all about it so we can do a useful post mortem, than one who is reluctant to use the word failure. These are the same people whose resume says they were consulting between jobs when they were really unemployed.

      Second, show me you are here now. Discuss your recent biz and failure, but then move on. Don’t wait for me to pull you into the present and future. Show me you can appropriately shift the conversation to the work I need you to do, and to how you’ll do it profitably. I want to see that you have already moved on.

      As for an employer’s tolerance for former business owners, I’d like to agree with those who suggest employers respect that kind of experience. Some do, and I wish more did. But in my experience, most employers are simply to self-absorbed to recognize that as valuable experience. They’re more likely to worry you will still be trying to salvage the old biz while you’re on the new job, or moonlighting at starting a new biz. They’re more likely to think that, having been the top dog, you’ll be resistant to being managed yourself. It’s easy to assume that the past predicts the future.

      That’s why I offer specific kinds of things to say that show you take full responsibility, and that you really are ready to move on. Those statements aren’t for everyone; you really have to come up with honest expressions of your own that will reassure a hiring manager. Others have suggested some good ones. The statements I’d avoid are those that “play with words.” A word is not going to cover up a real problem. Few people are good at semantics, and most managers are pretty good at telling sh*t from shine-ola.

      • I agree with you. But I’ve seen too many people disqualify themselves for various reasons, most of which basically are bolted to fear of failure. The writer has nothing to hide or apologize for…and needs to get that straight in his/her head before talking to potential bosses.

        And I agree a good post mortem preferably with the other 3 involved, would well equip them to walk in to an interview for a frank discussion.

        And I agree that they will most likely deal with the interviewer’s fear that they may be using this company to refresh, regroup and improve to go back out & do it again.

        And I agree their focus needs to be to get past that, and zero in on what they bring to the hiring manager’s party along the lines of technical/functional or managerial value. Frosting on the cake is if that failed company offers useful experience to the hiring manager.

        And consideration should be given to the point if the person gets to an interview, the hiring manager should be well aware of the failure, most likely has an open mind, will want to know about it and at least to this point, hasn’t hit the delete button because of it.

        Taking a slight turn…everything about this topic relates to internal failures big time. I know you trod the hi tech ground. I don’t know about other industries, but I’ve been involved in some character building death marches, but failed anyway projects. Some which resulted in lost jobs and/or transfers. And I’ve seen what I call mindless layoffs where everyone involved in seemingly favored projects are mindlessly cut loose.
        Internal failures very often stigmatize those involved, reducing your chances of moving into something else. Or for a period lovingly known as the “penalty box”. where you’re sent into limbo as tarnished goods until your tarnish wears off. Upper management usually excuses themselves of any blame while pointing fingers because with them the hands don’t touch the planning & approval wrists.

        One of my bosses told me that you should assume upper management has an attention span of 1 year. If some shiny object doesn’t materialize in a year their attention is drawn by another & the funding and support goes with it.
        VCs have told me, they assume 3 years for a business to take hold.

        the writer & partners had 4 years. So you’re right, the biz failed & they need to know why & be able to lay it out to themselves & prospective employers.

  5. I read today’s headline this morning in bed. I was so moved by the poster’s honesty that I re-plugged my phone, paced back and forth in my office to relieve my tension, and ate breakfast before reading the rest of this post.

    Obviously I have issues :).

    What got me was the word “failure.” I never have seen anyone forthrightly admit to it online.

    Then when I came back to the post, I was equally stunned by the word “my,” totally letting those three corrupt, child-molesting-on-work-time partners off the hook.

    Commenter Bob is both right and wrong. Failure is not an option!! Let’s erase it from our vocabulary. And while we are at it, what about the word “lie.”

    HR “experts” say we should never lie on our resume. Let’s define “lie.” Lying is to state something as a fact that can be proven to be factually untrue. Like claiming a college degree that we demonstrably can be proven not to have.

    It’s not lying when we stretch the truth till it snaps. For instance, the multi-million-dollar executive who quit his job to spend more time with his college-age children. (I can see it now. “Gee, Dad, thanks for flying in for our keg party. I appreciate you so much that if I get lucky tonight, I’ll invite you in for a threesome.” Family togetherness warms my heart.)

    If I were a hiring manager, I would hire the question contributor in a heartbeat. I would double weight his opinion on technical issues, confident he would not give a politically expedient but functionally wrong opinion in a staff meeting.

    (For an illustration of what not to do, let’s take Boeing. May their “experts” die in a fiery crash on a Boeing plane.)

    Needless to say, I am not a hiring manager. :)

    My best wishes to the person who wrote this letter. We need more people who can deal with reality.

    • @BS-er: Thanks for an entertaining opinion! Candor can always use a sense of humor.

  6. Inspired by this and by the referenced article on self-employment, it’s worth warning that a failure at one job opportunity doesn’t mean eternal failures.

    Job one, the interviewer or recruiter doesn’t like a failed business.

    Job two, who knows, maybe that entrepreneurial spirit will be viewed as a plus.

    • @Bob: Maybe it takes a programmer to present two opposing possibilities as the outcome. Thanks for the wisdom. Janus is the Roman god of change, transition, dualities, endings and beginnings, both the right and left fork in the path. We moderns have a hard time with what the ancients accepted as truth: Janus is the god with two faces. We must be able to see and hold two opposing ideas, outcomes, possibilities and be ready to deal with them. Who knows? Being a former biz owner could be a bad thing, or it could be good. Plan accordingly, because the wise job seeker can handle either.

  7. Another factor which may allay fears about “failure” is to briefly explain. “We made 2 mistakes, X and Y. We did our homework, but X proved much more difficult than we planned for. And that made Y, really impossible to get right.” – shows you’re not a blamer, a victim, you take accountability, you analyse your failures, are candid about them. All great qualities.

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