The latest available figures suggest that the global credit crunch will hit Scottish companies particularly hard, with the number of businesses collapsing predicted to soar by an astonishing 20% this year.

According to a report from a leading business rescue, recovery and restructuring specialist, Scotland is the third worst affected area of the UK, hot on the heels of London and the south-east.

The quarterly Begbies Traynor Red Flag Alert monitors adverse actions against companies and other "corporate distress signals". The most recent Alert states clearly that the outlook for Scotland looks challenging. "Critical problems" in Scotland alone have increased by more than 350% in the first quarter of 2008, compared with the same period in 2007.

There is no doubt that times are tough, and companies are going out of business every day, but those entrepreneurs with the courage to take personal blame, face up to failure and see it in a truly positive light as a learning opportunity are few and far between.

So my heart went out this week to Norma Corlette, who has done just that, honestly and publicly.

Corlette's high profile, award-winning education and training business went into liquidation with all of its 20 staff made redundant. TLG Education, which launched in 1998 and worked with some 100,000 young people last year, developed innovative training and education material and programmes. Corlette and her all-female management team grew turnover to more than £2m and made a respectable £250,000 profit.

Corlette was shortlisted for the 2008 Women of Influence Award, and the unique business and schools engagement programme she created was the winner of the Innovation & Creativity in Business Award at the Dunbartonshire Business Excellence Awards in March this year. How ironic to receive such a prestigious award when she must have known the demise of her business, the loss of her staff and the disappointment of thousands of school pupils and teachers was looming.

Even more ironic is that the Scottish Federation of Small Businesses is calling on Scotland's educational establishments to press home the opportunities and challenges that exist for their business-savvy pupils and students in a bid to address business failure across the country.



Too late for TLG. To say Norma Corlette will be bitterly disappointed is to fail to do justice to the depths of emotion she will be feeling right now. I know; I have been there too. But Corlette hasn't hidden behind the downturn in the economy or blamed anyone else for the failure of her business. She has publicly admitted her mistakes: the company was too dependent on Government funding and she should have changed her business model sooner. Instead of wallowing in self-pity, however, Corlette has announced her intention to pass on to other entrepreneurs the lessons she has learned from her mistakes.

I think that's admirable. I also think her actions should be emulated by anyone who has experienced the gut-wrenching, soul-destroying failure of their business. Failure is seen in the UK as embarrassing, unacceptable, as a sign of a poor businessman or woman. How wrong could we possibly be? Failure is an opportunity.



I'm not going so far as to suggest that failure should be lauded. That would be ludicrous. Nobody likes to fail, and it is a peculiarly Scottish trait to knock those who succeed and then mock him or her when they fail. But we need to learn from America's business community and change our culture of failure. It should be seen as a valuable experience.

We need to look beyond the immediate failure, learn to deal with that failure, learn invaluable lessons from mistakes made and have the passion and spirit to bounce back and do it all over again (minus the mistakes, of course).

I remember the story of a $1bn corporation in the US where a young marketing executive made a mistake costing the company about $1m. Carpeted by the CEO, the guy expected to be sacked, only to be told that the firm had spent $1m training him and wasn't likely to send him off to the competition having learned such an expensive mistake.

Apocryphal? Maybe. But the philosophy is sound: business needs the success of failure.

The film star Mary Pickford once said: "You may have a fresh start any moment you choose, for this thing we call failure is not the falling down, but the staying down." She might have been born in the late 19th century and she may have been talking about experiences in the film industry, but her words are just as applicable now and in any walk of life.

Hindsight is a wonderful thing. Recognise where you have gone wrong, fix it and make sure you don't do it again. Take responsibility, don't pass the buck and share what you have learned with others, à la Corlette. The indomitable spirit of entrepreneurs ensures that while mistakes happen, the "staying down" bit is not an option.