Making Sense of the Social Aspects of Business Failure

Abstract

This study examines the process of entrepreneurial sense-making of business failure in the context of their social environment. Transcripts of semi-structured interviews with six entrepreneurs who experienced business failure were analysed by interpretative phenomenological analysis (IPA). Emergent themes were the entrepreneurs’ self incorporating values and motivations, their grief and suffering in the aftermath of failure, feelings of betrayal and frustration, financial worries, learning as the benefit of failure and feelings of liberation. The study illustrates the contextual factors of the entrepreneurs’ significant others, such as spouses, parents, siblings or romantic partners who will influence the entrepreneurs’ future decision making. The research yielded evidence that entrepreneurs do take into account the feelings and attitudes of their significant others in their decision-making. Furthermore they actively search for benefits from failure in their sense-making. The study has practical implications such as for new and budding entrepreneurs, institutions, organisational and counselling psychologists as well as theoretical implications in the context of qualitative entrepreneurial research.