It took a long time and an enormous amount of reflection to realize that business had failed for many reasons, not simply because I was a miserable excuse for an entrepreneur. I wasn't looking to shuck blame so much as simply trying to understand what really went wrong. A few years later when I mustered courage to take plunge again, I did so with knowledge gained from my first failed business. I knew what I had done wrong and I knew what I'd done right. Lessons learned, put to good use. Knock wood, this time so far, so good.

Performing an autopsy on a failed business is a simple process, but one that can reveal a wealth of information that you can use should you ever decide to step out onto business high wire again.

To do your business autopsy find a quiet place where you can sit and reflect on life of your business. With pen and paper in hand (or laptop on lap) write down everything that you can think of that went right with business and alternatively, everything that went wrong. Your goal is to create a "Success" versus "Failure" spreadsheet that will help you better understand exactly why business went south.

For autopsy to be effective, it is imperative that you are completely honest with yourself. Shove your ego in a drawer and be completely realistic or autopsy will just become an exercise in futility. You will end up looking for scapegoats instead of reasons.

If your lack of experience was a contributing factor to failure of business, write it down. If your brilliant negotiating skills allowed you to close a big deal and beat out a competitor, write it down. If you were undercapitalized or incorrectly estimated your share of market, write it down. If you had a partner who didn't pull his weight or a product that didn't sell as well as you thought it would or your building was flattened by an earthquake, write it down. Write it all down.

Once you have all facts in front of you, it's easy to see why business really failed. You might be surprised to find out that failure of business wasn't completely your fault, after all.

Then again, you might discover that business failure was your fault. If that turns out to be case, don't beat yourself up for long. Not everyone is cut out to be an entrepreneur and that's OK.

The world would be a miserable place if everyone sat around whining about their lack of customers or complaining about their employees.

Next time we'll take a look at primary reasons businesses fail and discuss how you might avoid them.

Here's to your success.

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net

Once you're in front of client, downplay fact that an error was made (since error did not negatively affect service client received). You might even poke fun at yourself over situation (if client has a sense of humor, that is). You should then politely ask if he would prefer to have unbilled balance included on his next invoice or submitted as a separate invoice.

Then close your mouth, smile, and wait for him to respond.

You'll notice that you did not give him option of not paying bill, nor did you give him a point of contention to argue over. He should get message that it goes without saying that he owes money and needs to pay bill, but being wonderful person that you are, you are willing to let him decide how you should be paid.

I'm willing to bet that client will choose option A or B and that will be end of that. If this client has been difficult to deal with in past, he may argue that since mistake was yours, he shouldn't have to pay bill. This is, of course, a BS argument (and I don't mean Bachelor of Science), but one that some clients might make just to get out of writing you a check.

As mentioned earlier, you should have prepared for this possibility before going in. If your business can survive without collecting unpaid balance and you really want to maintain a relationship with this client, you should be prepared to offer a compromise that lets relationship continue.

Without appearing to be caving under pressure (this is hard part) look client dead in eye and say, "Mr. Client, since I value your business and billing mistakes were indeed mine, I'm willing to forego collection on unpaid balance and start billing correct amount with your next invoice, which, by way, I happen to have right here…"

Granted, in this situation you are not going to collect on past balance, but you are establishing rules of game for future and you might even improve your relationship with this client. The money you forfeit today could lead to an increase in referrals, testimonials, and repeat business tomorrow.

Here's to your success.

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net