What to do after your business fails

The advice you find after closing a business is mostly about feelings. Feelings matter, and they are not the urgent part. There is a short list of things that get worse if you leave them, and a longer list that can wait until you can think straight. This is the order that works.

Week one: stop the bleeding

Cancel every recurring payment on the business card today. Hosting, software seats, the accounting tool, the phone plan, the co-working desk. People routinely pay for subscriptions six months after the last customer left, and it is money that could fund the next attempt.

Tell the people who are owed money before they have to chase you. Suppliers and contractors talk to each other, and the difference between someone who went quiet and someone who wrote a short email saying what happened and what they can pay is the difference between a bad month and a reputation.

Pay the people who worked for you first, ahead of anything that is not legally senior to them. If you cannot pay in full, say the number you can pay and when.

Week two: the admin nobody warns you about

Closing a company is not the same as stopping trading. In most countries you have to file a final set of accounts and formally dissolve the entity, or it keeps generating obligations and fines. Book an hour with your accountant and ask exactly two questions: what has to be filed, and by when.

Get your own copies of everything before you lose access. Invoices, contracts, the customer list you are allowed to keep, analytics exports, the code. Access to email and cloud accounts disappears the day a card is declined.

Check what you personally guaranteed. Founders often forget that a lease or a bank facility was signed in their own name. Knowing the answer is better than discovering it in a letter.

Week three: the post-mortem

Write it while it is fresh and unflattering. The version you write in a year will be a story with a moral. The one you write now is the one with the useful detail in it.

Answer four questions in writing:

• What did you believe at the start that turned out to be false?
• When did you first get evidence it was false, and what did you do with it?
• What ran out first: money, customers, or your own willingness to keep going?
• What would you need to see, in the first month, to know the next attempt is working?

That last question is the one that changes anything. Most second attempts fail for the same reason as the first, because nobody defined what early evidence looks like. We keep a fuller version of this in the post-mortem guide, with a template you can copy.

Month two: the money question

Decide whether you need a job. There is a habit among founders of treating employment as defeat, and it costs people their next attempt, because the next attempt needs runway and a landlord who is being paid.

A job that covers your costs and leaves you two clear evenings is a better platform for attempt number two than six months of savings and panic. Several people in our server built the thing that finally worked while employed full time.

Month three: decide what the next attempt is

By now you know whether you want to go again. If you do, the useful move is to pick something that reuses the expensive thing you just bought, which is knowledge. You now know a market, a supply chain, a regulation, a type of customer. Starting in a completely new field throws away the only asset the failure produced.

Write down the count. If this was your second business that did not work, you are on two, and the next one is attempt three. Say the number out loud to someone. It sounds trivial and it is the single habit that separates people who keep going from people who quietly stop and call it something else.

What not to do

Do not announce a pivot in public the week you close. It reads as panic and it commits you to an idea you have not thought about.

Do not go silent with the people who backed you. Investors and customers forgive a failure. They remember the founder who disappeared.

Do not take a consulting contract that eats the whole week unless you need the money. It is the most common way a founder spends two years not starting anything.

Where this comes from

The order above is what people in The Losers Club actually did, told in the server by people on their third, fourth and eleventh attempt. Everyone there has a number next to their name for how many times the thing they are trying has failed. If you are in the middle of this, apply to join. It is free, and the answer comes within a day.