If you read my articles a couple of years ago, I wrote about my near-bankruptcy experience. I was dragged down by my 2 ailing businesses – both were franchise units of a leading business service franchise in my country. It was 2009, and at that time, the recession has pushed potential customers – both individuals and businesses – to go frugal, cut unnecessary expenses just to survive.
Along with the fact that I mismanaged my franchise units, both stores were finally tumbling down; I sold one back to my franchisor, and closed down the other one. It was a disaster to me – financially and emotionally.
So – how I switch from my business failure to business success?
Saying “switch” sounds easy, but believe me – it’s not.
Here is my brief experience switching from my near-bankruptcy experience into a journey to a new business venture, and how I manage my personal finance during the tough times. You can take a lesson or two, if you feel obliged :)
1. I fail fast
It was difficult for me to see my 2 franchise units fall deep into the abyss. It was even more difficult for me to decide to close down and sell the stores. It was a leap of faith – something that I am thankful today I take the step.
After putting up much thought, I decided that the franchise units’ future is dark at best – the line of products and services are near-obsolete, “thanks” to WiFi technology and the launch of mobile devices, including tablet PCs. I’ve warned my franchisor to deal with the issues fast, but they didn’t seem to think that my concerns were legitimate.
Then I decided to fail fast to stop further losses – I sell one store and close another one within 6 months period.
2. Be resilient
Yes, business failures disappoint you – a lot. But how long you will drown yourself in depression? What makes or break an entrepreneur is his/her ability to cope with failures and pursue yet another business opportunities.
Every time you fall down, you need to get up again – until you get there. It’s a war out there in the business world, and it needs people with strong willpower to take the whole things to the next level.
3. I consult with my family
Many small business owners like to decide on their own or consult with their mentors. But there are not many small business owners consult with their family members regarding the difficult situations. You NEED to get approvals from your spouse because your business issues will somehow affect your personal finance. Your personal finance’s stakeholders include your spouse and your kids. Take them seriously.
4. I build new business before I close down the failing ones
I can’t afford to close down my businesses without proper preparation. I had my back on the wall – I had no choice. I MUST succeed in the new business venture. So I built a new business – online business – before I closed my businesses.
5. I restructure my business debts
My businesses was founded by both banking institution and family members. My bank loans were settled using sales of an asset and restructure other loans as well, while avoiding filing for personal bankruptcy. Lessons learned – don’t bury your head in the sand; face your monster and slay it! And yes, don’t take more loans to repay existing debts.
6. I start up a business with $1,000 in credit card loans
It’s not ideal, but I had no choice. I can’t afford to borrow from financial institutions, friends and family again; I need to use other creative financing methods. I started up my online business with $1,000 loan on my credit card that I repay in full as soon as possible.
The initial investment is for domain name purchases, learning resources, and scripts. It has been recouped not long after that. I could start with no money, but I want to speed things up (yes, money gives us leverage, somehow…) – I have family to support and with a spouse and one baby need to look after, I MUST achieve success quickly!
7. Go frugal
Most people want to maintain their lifestyle, but when needed, you MUST lower your lifestyle, as survival is way much important than status, image or prestige. During tough times, you need to go frugal. DON’T try to maintain your lifestyle sacrificing much needed budget to launch a new venture.
8. Don’t go back into the workforce!
It’s only common sense really – when your business fail, you are tempted to take an easy route: Go back into the workforce. If you think the same way, too, please re-think and consider your options.
Heed this: If you went back into the workforce, you will likely to get stuck in your job. Why? Because you need the money to support your living expenses. Also, recovering from a business failure requires you to spend a certain amount of money… another “false alarm” that gets you into thinking that you need to stay in the workforce.
You might want to try #3 above – try starting a new business even before your existing business is finally going out of business.
9. Don’t look back!
This is probably the best advice I can give you: In recovering from a business failure and achieving business success, you shall not look back!
Don’t feel sorry about yourself; don’t mingle too much with your stress, anxiety and depression; get up, pick up the pieces and move on. Don’t look back, as the past can drag you down in no time. In fact, you can’t afford to think about how much money you loss with your latest business failure – you need to focus your energy on the future.
10. Trust in God
The most important thing you MUST do in recovering from business failure:
“Trust in the LORD with all your heart, and do not lean on your own understanding. In all your ways acknowledge him, and he will make straight your paths.” – Proverbs 3:5-6
Claim your success NOW!
So, there you go – 10 tips I have from my very own experience about my entrepreneurial journey. I hope this will inspire you to stay on top of your game and be resilient in facing challenges in your business and life.
Business success tips