During Business Failure Keep Your Personal Core Protected So You Can Do It Again
This is part of a series — Five Things to Do When Your Business is Failing
- Grow the Top Line With Quick Sales
- Aggressively Triage and Cut to Focus on the Core Business
- Don’t Let Your Business Fail Alone-Ask for Help
- Think About the Worst Case Situation and Prepare for It
- Keep Your Personal Core Protected So You Can Do It Again
You can see the company is running out of cash, and all the steps you have taken to prevent this from happening are to no avail. You can see that there is no white knight riding to the rescue, no buyout coming, your credit lines are getting shut down, customers don’t care about paying you on time, and your key people are interviewing with your competitors. What do you do? More importantly, what don’t you do?
Think back to the reasons you started the business in the first place. Was it for glory? Was it to get rich? Was it to something that no one else was doing? Did you see the market opportunity and decide it was time to seize it? Was it to secure a strong financial future for your family? It was probably some combination of those reasons.
Through the entire process, you have learned a lot about starting, running, and building a business. That is a set of valuable and transferable skills very few people have. Wouldn’t it be great to be able to put those to use again? It would be a heck of a lot easier to start over if you have a strong and stable base of support on which to build.
So don’t let the failure of your company suck you into a personal financial and relationship vortex. Keep your personal assets protected from the business assets, so creditors can’t touch them, and don’t succumb to the temptation to dip into personal funds to try to rescue the company.
- Don’t borrow money from family or friends at this point.
- Don’t dip into your retirement funds.
- Don’t borrow against your home or other property.
- Don’t do anything that is morally questionable.
Do everything you can do to keep your company going, but set bright and clear boundaries on what is acceptable behavior. If you can keep your industry reputation strong, you would be able to immediately go work for another company and put all your hard-earned skills to work. Conversely, if you get a reputation for being dishonest, you will find it much harder to find a job. Because that is probably what you are going to have to do at this point, go get a job.
And if your spouse and kids still love you, you still have a house, money in the bank, and relatives that are proud that you are part of the family, you have true wealth that no business failure can take away from you.
Author: Rolf Versluis
Published at Priority Queue
Five Things to Do When Your Business Is Failing – Priority Queue
September 17, 2020 @ 4:58 pm
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