It’s not just the bad guys that go bankrupt. The sad story is that most small businesses fall under. Here’s my advice to a family man struggling with what to do next.
QUESTION: I am forty years old, married, with two kids.
My life changed forever twelve months ago when I made the decision to put my business into voluntary liquidation. To tell my staff of twelve that the business we had built from scratch over the last decade had ceased trading was the hardest day of my life. I could go into detail about the bad advice I received from my accountant – and a bank that crippled me – but what’s done is done. We are not bad people. We never, ever wanted to go bankrupt.
A creditor forced their right of caveat on our family home, and we entered voluntary bankruptcy. Everything I have worked towards for twenty years is now gone, including our family home. The effects of this have drawn a wedge between my wife of seventeen years, and I have experienced a profound loss of confidence.
If you Google ‘bankruptcy help’ there are thousands of companies that will help you into bankruptcy, but no-one to help you cope emotionally through the process.
What can I do?
SCOTT: Your story hit me like a punch to the solar plexus.
I’m a proud small business owner, as are many of my family and friends, and it can be a heartbreaking endeavour.
We all know that most small businesses fail.
I knew the odds were against me when I started my own business, which is why I made the conscious decision to run it completely debt free. That meant bootstrapping the entire operation, second hand everything, and an office that matches the furniture.
I knew the odds were against me when I started my own business, which is why I made the conscious decision to run it completely debt free.
I was chatting to a mate this week who told me that when he was young his old man took him to a cancer ward to show him all the sick smokers. Cured him for life. It’s a pity there’s not something similar for people who are going through bankruptcy. If people could feel the pain you’ve endured since your business went bust, maybe they’d be less likely to make a bank their business partner.
You’ve been through it, and now it’s up to you to decide whether it’s a good or bad experience. No-one gets to be in business for twelve years and employ a dozen staff if they don’t have half a clue.
So what to do now?
If you’re like most small business owners I know, you’re probably totally unemployable (in the nine-to-five sense). I certainly am. So don’t you dare give up.
Just make sure that the next time you go into business you do it debt free, and aim to eventually have six months of business expenses sitting in a high-interest account, just in case.
Reading through emails like these makes me incredibly sad.
I’ve been accused in the past for being ‘unnecessarily gloomy’ about the economic climate.
If that’s true, I apologize. I don’t attempt to read the economic tealeaves, and besides I’m a firm believer that anyone can win, regardless of what Craig James says on the telly.
Yet too many people struggle when the economy has a pullback like the one we’re having now – due a combination of too much debt and the fact that none of us were taught anything about money when we were kids.
Yet years of doing this has shown me that people can pull themselves out of a pickle, and often it’s the one’s who get hit the hardest that come back the strongest.
Tread Your Own Path!
Now read: My guide to managing your money in 10-minutes.