Being able to bounce back from failure is one of the leading keys to success, according to a new report into entrepreneurship.
Barclays Wealth Insights found entrepreneurs who experience failure and see it as a learning opportunity are better placed to succeed in future.
Conversely, those who experience failure and conclude it is a catastrophic event from which it will be difficult to recover don't learn from the experience, struggle.
"It’s very important when you suffer a setback to look back, work out what your contribution was and determine how you need to change your behaviour," Donald Van de Mark, author of The Good Among the Great: 19 Traits of the
Most Admirable, Creative, and Joyous People, wrote in the report.
"When successful people fail, they are able to detach themselves from the setback, take stock and see the world and their weaknesses very clearly. And that takes humility, even courage."
Alexis Dormandy, founder of social recommendation app LoveThis, a social recommendation application, added: “Too often, we define failure as the whole venture having gone wrong rather than something that can be improved.
"I think if we defined it as something that could be improved, our society would be a lot more dynamic. There is something seriously wrong with a culture where you try one thing, are perceived as having failed and consigned to the scrapheap of life. That is going to discourage anyone from trying anything."
In a survey of 2,000 individuals - 800 of which considered themselves to be entrepreneurs - 74% agreed that viewing failure positively is essential for an economy to grow and 51% agreed that past failure in entrepreneurial endeavours increases the chance that a new business will succeed.
In addition, 34% of entrepreneurs said failure encouraged them to try again, compared with 19% among non-entrepreneurs.
The report also states that many academics categorise entrepreneurial failures as one of four types of frog to help provide a framework for thinking about how and why companies hit the wall.
According to the theory, failed entrepreneurs can be classified into four main types:
Boiled frog: It is often said that a frog dropped into boiling water will immediately leap out again, whereas
one placed in cold water that is then heated gradually will not. In an entrepreneurial context, the entrepreneur is the frog who sits in the water as it heats up, and does not notice its changing environment. He or she becomes complacent and fails to notice how factors such as competition, changing technology or evolving customers are rendering their business model obsolete.
Drowned frog: As their business grows, many entrepreneurs think they need to be everywhere at once. They try to be 'king of the pond' and spread themselves across every aspect of the business but often lack the necessary breadth of skills to do this effectively. Avoiding this fate requires the entrepreneur to build a strong team around them, delegate and take the right advice.
Bullfrog: Early success can encourage some entrepreneurs to become too fond of the trappings of success. These bullfrogs put their own needs above those of the business. They consider themselves to be indestructible and do not acknowledge that their actions harm the business financially.
Tadpole: Many entrepreneurial ventures will never fulfil their promise and are doomed to remain as tadpoles. Despite early promise, they do not reach their potential and fizzle out without reaching the next stage of growth
The report lands in time for the start of Global Entrepreneurship Week 2012, which runs from 12-18 November.
The Department for Business, Innovation and Skills is pledging its support for small business by announcing that two entrepreneurs will be given advisory roles in government.
These entrepreneurs in residence will help advise government on small business issues, making sure that the needs of entrepreneurs are properly considered by policy makers.
Secretary of state for business Vince Cable said: "This year there were a record number of 4.8 million SMEs in the UK. That is welcome news, and we need to continue encouraging entrepreneurial spirit amongst people of all ages so they can turn their ideas into businesses.
“We have a great entrepreneurial knowledge base in our universities that we have to use to our competitive advantage. The £1.1 million investment that we are making through the Entrepreneurs and Education Programme will help us unlock this potential by giving real support to people who are looking to commercialise their innovations."
Suggested For You
SUBSCRIBE AND FOLLOW
Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements.Learn more