BELFAST BRIEFING:The North cannot afford to stigmatise business people just because their first venture fails, writes Francess Mc Donnell.

NO ONE enjoys the bitter taste of failure - even less so if you have poured your heart and soul into a business and despite your best efforts it fails.

There is a never-ending list of reasons as to why some businesses succeed and others do not. Sometimes it is because of market forces, sometimes it is the product or service and more often than not it is down to the personalities involved.

But sometimes there are also simple, honest business failures - ones that are not designed to hurt employees or suppliers, just businesses that did not work out.

Latest figures would suggest that Northern Ireland is shouldering more than its fair share of business failures. There were 164 corporate liquidations last year which is the highest figure on record for a decade.

A rise in the number of companies being liquidated is a worrying trend but it is not the only indicator which suggests that some of Northern Ireland's entrepreneurs are struggling.

VAT registrations and de-registrations also paint a picture of the level of entrepreneurship and the overall economic health of a region. Latest government figures show Northern Ireland recorded the lowest number of new VAT-registered companies during 2006 and the biggest rise in VAT de-registrations.

In total, 600 new firms registered for VAT status while 500 applied to be de-registered.

I have known people with brilliant business ideas who just never seemed to stand a chance. There are also two people - let's call them "Firm C" for argument's sake, who I thought were crazy to go into business. They are now well on their way to becoming millionaires twice over.

So what is the secret - what makes the difference between success and failure? Garth Calow, who has seen one too many businesses bite the dust in Northern Ireland, may just have the answer to that question. Calow is chairman of the North's professional insolvency body, the Association of Business Recovery Professionals (R3).

He is calling on Northern Ireland to change the way it thinks about entrepreneurs who have tried but failed. Calow believes that there is a social and professional stigma associated with business failures and he is right.

The reason I thought the people behind "Firm C" would never succeed is because they had already been in business once and failed.

But they decided against the odds not to give up on their business dream - despite their initial taste of failure or their friends' sympathy and the bank's disapproval.

Today they have more orders than they can handle and various banks are clambering, despite the credit crunch, to be their new best friends, so they have proved they were right to try again.

But how many potential entrepreneurs in Northern Ireland give up when the going gets tough or if in the worst case scenario their first attempt in business does not succeed?

The North's executive government is actively trying to encourage more entrepreneurs to go into business and create new jobs in the private sector. But every budding entrepreneur knows that setting up any business is a risk - and for some the risk of failure may be too great.

The North still has a very close-knit business community which means word spreads fast when things are going well or when your business is in trouble.

According to Calow, Northern Ireland now needs to take a leaf out of how the business community in the United States deals with business failures. In the US a business failure can be seen as a mark of experience - it actively encourages entrepreneurs who might not have made it first time round to try again.

Calow believes it is now time for people in the North to adopt a new attitude to failure in both the private and public sectors.

"Those who are honest in their endeavours and not reckless at the expense of others but nevertheless fail should not be condemned but encouraged to reinvest and try again," he says.

He believes an economy like that in the North, which is heavily dependent on the public sector, should not alienate people who want to go into business again, even if they have experienced a business failure.

Calow acknowledges that not everyone will see the net benefit in encouraging entrepreneurs with a less than perfect track record to try again. "Every job lost, every creditor damaged and every customer disappointed does irreparable damage to the local economy."

But he says it is important to encourage a spirit of "rescue and recovery" when it comes to business failures which can help everyone in the community - from creditors to suppliers and the workers involved.

Calow believes that if Northern Ireland can be persuaded to change its attitude towards entrepreneurs who take a chance, but who do not always succeed, then the pay-off in the long run could be worth the risk.