Dear Coach,
My friend and I put everything we owned into a business four years ago and were just starting to succeed when the world fell apart. We borrowed heavily to start the business and used an inheritance to invest in land for our dream organization. We also bought two rental houses and thought we could turn them around for some big money. The renters have moved, we don’t have the money to pay the mortgages and the bank is threatening foreclosure. We’re behind on repaying all loans; and our business in general has plummeted. We’re only 29 and 31 years old, overwhelmed, and know we’ve made some bad mistakes. What to do? We feel like such failures! Broke in Minnesota
Dear Minnesota Entrepreneurs,
First of all, don’t beat yourselves up over this seeming catastrophe. I don’t know if you are aware that entrepreneurial people often go through four or five businesses until they find the right one. Entrepreneurs love challenges. The thrill of “starting up” really grooves us. And the economy hasn’t been exactly helpful!
After resigning from federal government service (feds do not like entrepreneurs making their own decisions) my husband and I started a record label in 1984. Richard and I thought we had all the answers: a new idea, a gap in a huge market where we would be the pioneers, low startup costs, ingenious marketing plans, great stamina, the willingness to work hard and the intention to operate a socially conscious business…long before that term had made its appearance.
At the beginning, we hired an expert consultant from the gift industry. She told us that, even though we had a cute idea, we would never do more than $60,000 a year. Eight years later, with five million dollars annually in sales, we frequently laughed about almost believing her and giving up before we barely got started. But it wasn’t easy. And this next paragraph may be the most important tip for you.
What we didn’t know, in our entrepreneurial ignorance, was how to manage cash flow and expansion five years into the future. We spent too fast, got caught up in the excitement of working with big-name wholesale buyers, didn’t get early financial management advice, and generally, operated by the seat of our pants…until…#5 year approached when we looked at our statements and said “what’s happening?!”
Fortunately, the market we sold into was still very strong, and we were able to take evasive action immediately. It was painful taking responsibility for some of our actions, but it wasn’t the end of the world.
You are young and you have not failed, but you have learned valuable lessons for your next startup. There’s only the truth of what is—the present situation. When you can acknowledge the honesty of the circumstances (without blame) then a strong plan of action can be developed.
As you move forward, these questions and thoughts might be useful:
- Have you gone to an accountant who specializes in start up businesses, one who has had numerous experiences with entrepreneurial businesses and understands cash flow? Ask this person to be upfront with you about your current position.
- Do you understand how courageous you were to start your businesses in the first place? Maybe it’s true that you expanded a little too quickly without a solid business plan, but what did you learn from this? Make a list on paper. Do not keep it in your head. Be clear about what contributed to the demise, and successes, of your business.
- Is there a strong vision in place for the dream you have? I work with individuals and companies all the time to help them envision the ultimate business, or life, and then create a strategic plan of action to bring the ideas to fruition. Get clear and focused. Are you willing to do what it takes: creating a well thought out plan of action and committing to short and long-term goals? You may need a business plan. It doesn’t have to be complicated at first; however, I’m sure you will want to know whether or not your new business is financially feasible from the beginning.
- Are you honest about what is really important to you…the values that stir your grits? Perhaps you’ve thought about what will make the most money, or will be the most exciting. However, maybe your internal consciousness is guiding you to create a business that will help millions of people to be more healthy or happy. How will you reach deep inside to discover your truth?
- Have you been realistic about what is necessary to balance your life? What actions do you take to nurture yourself? Were you working 24/7 and forgot the words “burnout”?
How might you begin another venture with renewed energy?
These circumstances have presented themselves for a good reason. Be grateful and rejoice in the lessons you are learning, and know that each one has been necessary for your forward momentum. You do have some big decisions to make, and whatever they are will be perfect for you. This is an opportunity to rejuvenate yourself, acknowledge your strengths and your not-so-strengths, find professional partners that complement your skills…and, most importantly, create clarity about your desired outcomes and how you will achieve them.
When you were a youngster, do you remember your parents or a sports coach telling you that how you played the game was more important than winning? If you played your game with honesty, and a heartful intention to make this a better life for everyone you touched…then you have succeeded beyond all material realms.
Regroup, use your experiences to rekindle a strong foundation doing what you love, and create a better world for all of us to live in…while…incidentally making all the money that you really need, not necessarily the pile that you want.
If you’re in transition of any kind, starting or growing a business, or just wondering what to do next, please write to me with your questions at www.Sharon@VisionJourneys.com. I offer free consultations and specialize in creating achievable and exciting strategic plans of action. And I am passionate about your success in business and life!
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