Facing a Business Failure?

This post is intended to be the first of a series of guides, to help you as you make the journey through your own failure process, written by someone who has been in exactly the same place as you may find yourself now.

When I experienced My  Own Business Failure, I had a great deal of support from colleagues, family & friends, however I still felt utterly alone.

What I craved at the time was to hear from someone who had dealt with the same emotions and circumstances, felt the crushing guilt, the numbness of not knowing where your life is going, and the shame of having to file for Bankruptcy before the age of 30… however, this was the one thing I didn’t have.

I believe one of the purposes to my own failure, was to bring my experiences and knowledge to you, to hopefully give you the support I desperately wanted.

I would like to stress the fact that I do not claim to be an expert on the subject, nor do I claim years of study in behavioural psychology and the like, I simply believe that sometimes the best experience is experience itself. I understand what if feels like to be afraid to answer your phone, avoid the local shopping centre in fear of running into past customers or creditors and to feel as though you are a complete loser coupled with a self loathing bordering on manic depression.

I realise this may sound melodramatic, however, feelings can’t be explained. They simply need to be explored, which in turn will enable you to gather your wits, regain your confidence and work out what went wrong.

I also understand that as you read this, you may also think ill of me. It’s ok for you, I hear you saying, you’ve now made heaps of money from selling your story!

So, to be completely honest with you, at the time of writing this I am classed as an undischarged Bankrupt, renting a small house, and living week to week on money made from a part-time job. If I want to leave the country, I cannot do so without permission from my Bankruptcy Trustee, I cannot run a company and I must send my tax return to my trustee each year showing my earnings in case I earn too much, in which case I would be forced to pay 50% of my wages over a set amount, to my creditors.

I’m not telling you this in order to scare you, more so to let you know that I know how it feels to feel humiliated by your circumstances and to have no control over the outcome of what, at the time, seemed to be ‘the right thing to do’. I want you to know I am friend, not foe and I am excited at the prospect of sharing my experiences and circumstances with you, in the hope that you will find some relief to your present suffering.

I recall when going through my own failure process someone saying to me that dealing with the failure itself was a lot like grieving. At the time, and even now, I would have to agree with that 110%. Obviously when grieving, there are many deeper levels of emotion experienced, however, the process still appears to be very similar.

Denial, Anger, Hurt, Regret & Slow Acceptance are all stages that can be associated with both processes. When going through a failure process, there are many strong feelings of loss, whether it’s your first business venture, or a family owned company that has been operating for years, no doubt you’ve spent many hours of blood sweat and tears, and most likely would have poured your heart and soul into your business. Naturally a large part of yourself will be lost along with the failure.

All of the feelings associated with your failure process must be felt, and no particular part of the process can be rushed. For some it will be a fairly smooth transition from this failure to the next bend in the road, for others however, it may take years to get over the pain and the blow to your self-esteem.

The most important thing to remember is that it is a personal journey and one that must be reached in your own perfect time. Do not allow those around you to tell you to just ‘get over it’ or to ‘not be so hard on yourself’. As certain as it may be that these people are trying to help, they also would have no idea how to understand what you’re going through.

It is a Process…Embrace It

As you see your failure beginning to take shape and the people around you are starting to suggest that your options are getting smaller, or even worse, that your only option is to accept defeat and move on, naturally your initial thoughts would certainly include many angry monologues not excluding some expletives.

‘How can they know what’s good for me and my venture? They haven’t tried their absolute hardest to make this work!’

Although your first reaction to these people and their kind words of wisdom and ‘free advice’ might be to ignore them and scoff at their insensitivity, you will soon come to realise however, that there is no other way to deal with your situation.

The only way you can begin to accept what is happening to you and start to take the proper action to making things right, is to take on board as many positive and helpful thoughts about your situation as you can.

You might not be able to change your situation, but you can change the way you react to it.

There is always a choice.

You can either choose to go down fighting, take everyone with you, no matter what the cost to your life, relationships, career, income etc., or you can choose to accept your situation, do what needs to be done, deal with it, and begin the process of re-building your life and moving on.

The choice is yours to make.

‘In three words I can sum up everything I’ve learned about life: it goes on.’ Robert Frost

The most important thing you must remember is that you tried. You will never have to lie on your death bed when you’re old and grey wondering what might have been. You now know.

Perhaps it didn’t work, but at least you know that now. This failure could lead you to something even more wonderful than you had hoped for, but first you must accept defeat and move on.

You are the one person in control of your destiny.

Take Control. Learn. Grow.

Denial

‘But, this was meant to be, it’s not supposed to fail!’

‘I have so much more I have to do first, it can’t be over.’

‘There has to be a way for it to all work out.’

‘I have to keep trying, there’s no way I can let everyone down!

Do any of these thoughts sound familiar?

When realisation that something is about to end or fail, and it hits you for the first time, it is quite a shock. No doubt, you’ve put in many, many long hours and you’ve been trying so hard, especially the last few months, to try to get things to work out. You’ve had sleepless nights worrying about finances, debts, accounts, bills, wages, competitors – the list is never ending.

You can’t seem to grasp the idea that even though you’ve put your heart and soul into this, it’s time to call it a day.

Many people want to know when is it time to finally give up?

This is only a question that can be answered with the help of your Professional Team such as your Business Partners, Accountant, Lawyer, Bookkeeper, General Manager etc. Although your mind is ready to continue the struggle, unwilling to give up and prepared to try any further desperate attempts to pull through, usually, your heart will know that it’s over.

However, it’s different for everyone, but there are a few ’symptoms’ that can point toward the end of your venture.

Symptoms of Failure

• Trouble or Inability to pay Creditors/Bills by the due date.
• ‘When we get paid, you get paid.’ Having to wait until there is ‘enough’ money in the bank before you can pay a bill. Uneven or non-existent Cashflow.
• Exceeding Overdraft/Credit Limit
• Cheques bouncing
• Creditors Stopping Supply
• Telling white lies to buy yourself more time to make payments. ‘Oh, I didn’t receive that invoice, could you please re-send it?’, ‘Oh, yes I just paid that invoice this morning.’
• Utilising Cash-on-Delivery more and more often. Or suppliers suggesting this as a preferential form of payment.
• Running down stock levels below preferred capacity.
• Receiving Statutory Demands for payments or having Legal Action taken against you for recovery of monies owing to Creditors
• Having trouble paying or not paying Employees, Taxes or Loans.
• Selling stock reduced to 50% off or more just to try to generate some cashflow.
• Following up late paying customers only when cashflow is critically low.
• Nervousness & apprehension answering the phone for fear it will be a Creditor calling wanting payment that you know you can’t make
• The feeling of dread going to your place of business with thoughts like ‘I wonder if we’ll make any money today’, ‘What’s the point? No one would notice whether I was here or not.

As you can see, it’s quite a list. You may have many of these symptoms, or you may have only a few. Whenever there is any apprehension in regard to the state of your business affairs, it’s time to call a meeting with your Professional Team so they can give you the complete picture of what’s happening to you financially, allowing you to make an informed decision.

You may be at this stage of the Denial Phase (although you’re probably in denial that you are anyway), and thoughts like ‘It will turn around in the next month or two when business picks up’, are running through your head. You may be thinking that you could at least give it another six months. ‘I’ve tried for this long, my hard work has to pay off eventually, right?’

If this sounds like you then, stop for one moment and consider these points.

If I continue down this path how will it affect my:

• Relationships
• Health/Wellbeing
• Sanity
• Self Esteem
• Lifestyle
• Family
• Stress Levels

99% of the time, the decisions we make rarely just affect ourselves. Our Spouse, Family, Friends, Children should all be considered when you make any decision. Continuing the struggle could mean that you will pull through and be fine. However it could also mean that you don’t pull through for another 6, 12 or 18 months, if at all.

We all know that there is an element of risk in everything we do. Some people choose to throw caution to the wind and jump in head first, Sink or Swim. Others do not. Going forward from here is yet another risk that you must take. Only you, with the assistance of your Professional Team, can decide if it’s worthwhile. One of the best ways to help see things more clearly during confusing and stressful times is to make a list. Simple as though it may be, it can really get your mind working for you, instead of against you, if only for a few moments.

Get two sheets of blank paper. At the top of the first write ‘Continue’ and at the top of the second write ‘Cease’.

For both pages draw a line down the middle and at the top of the columns label one ‘Pro’s’ and the other ‘Con’s’.

Try to list everything that comes to mind. If you have figures in your head of losses or potential gains, put them in too. Every piece of information is helpful.

For example:

On the sheet headed ‘Continue’ you may write something like:

Pro: Possibly pull through and create $500,000 turnover per annum.

Con: Increased stress and problems with my spouse.

On the sheet headed ‘Cease’ you may write something like:

Pro: No more worries or constant struggle.

Con: Financial Losses of $X and Feeling like a Failure.

This exercise may or may not help you decide what to do. But what it can do is paint a clear picture of exactly where you stand and what your dominant thoughts about your situation are.

It wasn’t supposed to happen like this.

When we begin our dream venture there is never any expectation that we are going to fail. Of course if we’ve done our planning properly, we would’ve had some sort of plan in place for an exit strategy, or for emergency action if ever it had to be taken, however we never expected anything bad to happen. Hope, Excitement, Optimism are all natural elements that come with a new venture.

Naturally, when thing’s do start to go bad it can be quite a shock. Accepting the sometimes inevitable outcome of failure is very difficult and unnatural, especially when there is often great expectations put onto us by others.

‘Giving Up’ is often associated with Failure, even though 99% of the time there is no other sensible choice. No matter what people around you say, choosing to end your struggle is for you and your Professional Team to decide. Others who are not involved in the situation will always have formed opinions of their own, however usually these people cannot see the whole picture.

Only you and your Professional Team can make the correct informed decision.

Perhaps thoughts like, ‘This can’t fail because it was meant to be’, are swimming around constantly in your head. You may feel that because what you’re doing is your dream, that it absolutely must work, no matter what.

Each day you’re putting so much pressure on yourself and those around you to perform, and each day you feel as though it’s a harder uphill struggle. You’re possibly not the person you once were. You have now become a frazzled, stressed, angry, tired, and a shell of who you once were trying desperately to control everything that’s going on around you, and all the while feeling as though you have no control.

Where are you at?

Depending on what state your venture is in depends on the type of action you must take. The key here is, that you must take some action.

It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.  Franklin D. Roosevelt

Fear of failure immobilises you. To overcome your fear you must take some bold decisive action. The action you take may work or it may not, however the point is that taking some kind of action empowers you to change the situation. If you’re unsure of what to do, start by asking yourself: ‘What would I do if I knew I could not fail?’

Write down any ideas that you may have, no matter how unachievable they may seem.

What could be achieved if you had no fear?

Set aside your negative thoughts for a moment and allow yourself to be creative. If you are travelling down the path of failure, wouldn’t it be better to know that you tried absolutely every avenue to make it work before you decided to give up?

Now is the time to be brave. It is certainly hard to face the prospect of failure, but wouldn’t it be a little easier facing that prospect with the knowledge that you tried your absolute best to make it work? If you’ve already taken action and it hasn’t worked, try something else.

Getting creative and trying new things cannot make your situation any worse.

What have you got to lose?