PLAN B BEFORE BANKRUPTCY
Does Your Business Future Look Bleak? You May Have More Options Than You Think.
By Jeffrey Dobkin
PART ONE
Business is not only lousy, it stinks.
Every one of your accounts--or at least the ones still with you, is slow pay. You owe money to a lot of people, and it's not getting any better. Former business associates and suppliers no longer call to speak with you, they just have their accounting departments call and ask for money. Smaller vendors call demanding immediate payment. Some call you names. You can hear the disgust in their voices. As an honest person, you cry a little inside at each of these calls. Since starting your business, these calls are the toughest thing you've ever had to endure.
After a couple of months of this, when the phone rings, you cringe. This reaction accompanies any call. Now you dread answering the phone. The ringing pierces your every thought. When it rings, it penetrates your stomach with a sharp pain, like a stab with a pencil. Then the feeling comes back up your throat accompanied by an acid burning. The bad taste remains in the back of your mouth the rest of the day. It's only Monday, you have the rest of the week to look forward to. Is this what business is really about? I don't think so. What a mess. What now, mes amis, what now?
Well, I'm not going to tell you not to worry. You're in a hell of a pickle. But you're not alone. Yes, it has happened to others. Many others. Bigger companies than yours, I'll guarantee you that. And lots of companies, too. Way more than you ever imagined.
Sometimes companies fail. Big companies--with the biggest and best minds--they sometimes still crap out. And all through the decision-making process, with the best advisors and the best advice, with research money out the wazoo; with enough focus groups to choke Rhode Island, some companies still go belly-up. So if things are going down the tube, don't feel too bad--you're not alone. In fact, you're in good company.
More common than failing businesses, are product failures. New Coke--remember that? The Edsel, the Ford Falcon, and the Chevy Vega. Remember IBM's OS2? How about Apple's Newton? Lots of products fail. It's fantastically easy to have a product that doesn't do well...and if you're a one-product company, c'est la vie. Or, more appropriately, c'est la morte.
The hardest part is, if you're like me, you're as honest as the day is long. You take all the calls and letters personally--just like I did when my company went through hard times. Although you may think you have some new ones, I know every feeling you're going through. Tough, tough times. And hand-to-mouth is no way to run a company. But it may have to do for now. So until you can get back on your feet, here's what to do.
Numero Uno--The first rule of order is to reassess being in business. The further beating of a dead horse to try to bring him to a gallop is neither practical, nor feasible. If you really have no possible alternative, and no bright hope on any horizon, let it go. In the final evaluation, is your business worth saving? If not, engage your exit strategy. What? You don't have one? Oh well, I don't have one either. Most people don't. Just being realistic here. So now what?
Rule Two--Follow your reassessment plan. If it's to close your doors, then dissolve the business as best you can, and start looking forward to your new life. Hey, no one said you could only start one business in your lifetime, and if that didn't work out, you could never start another. Or that you had to live in grief the rest of your life, either. Sure it's heavy. But life is short, and you absolutely have multiple chances.
If your business is big enough, and you do have high hopes of bringing it back to life, filing for bankruptcy is an option. For a small firm, this is always my last option--like right before death and taxes. Don't go bankrupt. This is always the worst choice, and just the beginning of a headache. It's dragging you through the court system, endlessly. Lawyers are expensive, all of whom will insist on payment up front. It's a horror, and then you drag the government bureaucracy in. I don't know about you, but I've found that whenever the government gets involved, everything gets worse. It get more expensive, and your money buys about 1/3 as much. I don't recommend you even think about declaring bankruptcy until it's forced on you.
In the next issue, I'll discuss your options when faced with a tough business situation.
Jeffrey Dobkin is a direct mail copywriter and a direct marketing consultant. You may contact Mr. Dobkin at PO Box 100, Merion Station, PA 19066.
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