By Damien James, an EO Melbourne member and the founder of Aged Foot Care Australia P/L.

I’m sure you’ve offered someone a job and it didn’t work out as planned, right? Well, have you ever made such a poor recruitment decision that it cost you your entire business, all the money you’ve ever earned and your reputation? I did, and it turned out to be the best professional decision of my life.

It all started in 1997, when I graduated from university with a bachelor’s degree in podiatry. I had always dreamed of running a successful company—just like my father—so I started a mobile podiatry business that catered to nursing home patients. Within three years, I was operating Australia’s largest podiatry service and treating more than 1,000 patients a week! Flushed with confidence, I launched a second business; a chain of sports clinics that boasted high-profile clients like Martina Navratilova and Lleyton Hewitt. As you can imagine, life was good! I was making money and living the entrepreneurial dream … and then it turned into a nightmare.

It’s amazing how quickly things can turn for the worse in business. In my case, it was a hiring mistake that torpedoed my success. A trusted employee whom I had hired and respected fleeced us for US$300,000. I was shocked, to say the least. When I finally got the chance to confront the fraudster—I later learned he had a long criminal history—he fled to Russia. What’s worse, he started offering my staff US$2,000 in cash a week to join a competing company he had launched. Before I knew it, I had lost most of my staff and several big contracts— both to my new competitor. A few weeks later, I was forced to put both of my businesses into liquidation. I couldn’t believe it. Talk about a rough day at the office!

My reputation in tatters, I considered walking away from the industry for good. But then I remembered my father, and how he would navigate through the hard times. I was facing a difficult journey ahead, but I wasn’t a quitter. Like any good entrepreneur, I had to persevere. After considering my options, I decided that the only way to rebuild my name—and my life—was to start over. Keen to avoid the same pitfalls, I went back to school, earned a master’s degree in entrepreneurship and engaged a business mentor who delivered the reality check of a lifetime. He said, “You get the staff you deserve.” It was a huge slap in the face, but it was exactly what I needed to hear.

That feedback forced me to look in the mirror and accept full responsibility for what had happened. For starters, I was pretty clueless when it came to our financial statements. The fraud was probably like taking candy from a baby! It was my responsibility to know everything about my business instead of relying on those whom I hire. I also realized that the only way to rebuild a stronger business was to become a smarter business operator. That’s the biggest lesson my business failure taught me— to work harder on myself than on my business. With this knowledge, I started my company all over again, using my lessons learned as a foundation for better business.

Today, I’m happy to say that my new business, Aged Foot Care Australia, is the world’s largest podiatry service and our revenue has grown in excess of 50 percent annually for the past two years. And I doubt any of this would have happened had I not lost everything in such a public failure a few years ago. It’s true what they say: Failure hurts. But it’s a pain I can live with if it gives me the knowledge and tools I need to become a better entrepreneur.