We love comebacks. If it’s been born again, risen up from the ashes, or reinvented, we’ll dust off the pom poms and cheer for it again (e.g. George Foreman, Rocky, fondue, Britney Spears … er, well, anyway …).

What we don’t like is someone not willing to admit he/she was wrong the first time around. Businesses, like people, are often unwilling to admit their mistakes and instead resort to denial until the issue is so widespread that all chance at redemption is gone. (Enron, Watergate … any bells ringing?)

The beauty of the internet and certainly of social media is that every business, big or small, has the opportunity to right its wrongs and reinstate its good name. This can be particularly crucial for small businesses.

One person getting burned by hot coffee at one McDonald’s franchise isn’t going to stop the other 6 billion people on the planet from getting their morning coffee at any of the other 30,000 or so worldwide locations. The damage to McDonald’s is minimal. With small businesses, it’s a different story.

Most small businesses are dependent on a local customer base or their reputation in a niche market. If your customer base isn’t impressed with you, it could mean an unwelcome early retirement.

So, what do you do when you or your company makes a mistake?

#1. Admit your mistake. Acknowledge your fallibility, and you regain the respect of your fellow homo sapiens who screw up every day just like you do.

#2. Apologize! You’ve shown you’re human; now show that you have feelings, too. A sincere apology will atone for (almost) any wrongdoing.

#3. Fix your mistake. Offer refunds, discounts, gift certificates, free services, or whatever you can come up with that would keep your customers in your corner. Consider it your business’s version of a dozen roses and a shiny piece of jewelry.

#4. Make sure it doesn’t happen again. Just like your mother made you sit in the corner until you’d learned your lesson, take some time to figure out what it will take to avoid a repeat offense with your customers, and make it happen. It might be a change in procedure, a change in staff, a change in product, or a number of other minor alterations. Breaking from tradition can be a difficult adjustment at first, but it can also transform a diminishing business into a thriving one.

#5. Most of all, advertise your new image! Social media can be particularly helpful for promoting small businesses. Whether you choose to post images of your grand re-opening on Flickr, chat about it on your blog, Digg or Twitter articles about your company, or anything else you can do with this nearly limitless tool that is social media, make sure you get your name out there in a positive light!

As an aside …

An English friend of mine recently turned me onto Chef Gordon Ramsay’s hit show, “Ramsay’s Kitchen Nightmares” (you can catch reruns on BBC America or the show’s U.S. version on Fox). Underneath the foul-mouthed banter (my favorite Ramsay quote regarding a particular restaurant’s menu: “crap on top of crap made with crap using crap”) is one optimistic revelation: with the right attitude, some guts, and a bit of ingenuity, a failing business can learn from its mistakes and make the changes necessary to achieving success and customer loyalty.

So, if your company has dropped the ball and is in danger of losing customers, don’t be afraid to admit the error of your ways and forge ahead with a new vision, and don’t forget: promote, promote, promote!