If It All Goes Wrong: Don't Rush to Bankruptcy.
It's a sickening feeling when your debts start to stack up, your marketing strategy is failing, and it doesn't look like you'll ever be profitable. Your family is getting stressed, your business can't pay its bills, and customers are starting to make angry phone calls asking why the things they paid for aren't happening.
At this point, many people feel ready to throw in the towel. I'm here to tell you why you shouldn't be one of those people.
There's an old Chinese proverb I'd like to share with you: the temptation to quit will be greatest just before you are about to succeed. Nowhere is this more true than in home business. You might feel like you're failing over and over again, until you feel like giving up. The paradox, though, is this: you haven't really failed until you've given up.
If you really want to, there will always be ways to raise money for your company. You probably have all sorts of bills for things you don't use, not to mention possessions that could be sold or downgraded. Did you know that the average person has thousands of dollars worth of random stuff just lying around in their home? In other words, you can always find the money if you're really determined and not afraid of losing everything.
The only thing you should really try to protect is your house and some money for basic food -- everything else is expendable. Never forget that the worst thing that can really happen to you is that you'll have to go out and get a job. Would that really be so tragic?
Fear is your enemy in business. You cannot give in to your fear and give up before you've given it your all -- the real reason why so many home and small businesses fail is that their owners chicken out and run away at the first sign of trouble.
The Captain Goes Down with His Ship.
When the chips are down, the only thing to do is to stake your personal success on the success of your business. After all, what's the point in bailing out before you have to? You're guaranteed to lose money that way.
Someone once told me that the difference between an average Joe and an entrepreneur is this: the entrepreneur will not give up on a business until his creditors come and take everything he owns. And even then he might try to hide from them and keep things going from his friend's basement.
Don't Tell Customers.
It might seem dishonest, but for goodness' sake do not tell any of your customers that things are going wrong because your business is in trouble. They will immediately run a mile, putting your business in a far worse situation than it was before. You must always try to make it look like everything is going just fine -- admitting problems will put the final nail in your business' coffin.
Try a Voluntary Agreement.
If your creditors are at the point of knocking on your door, you should try to get a voluntary agreement with them before you even consider declaring bankruptcy. This is when you negotiate your debts down to a lower level using the threat of bankruptcy, and your creditors sign an agreement with you to say that they will leave you alone once you've paid that money.
The Absolute Last Resort.
I simply cannot get across to you how much you should not consider bankruptcy as a viable option, ever, until you are absolutely forced into it. Think of it as being like suicide: the absolute last resort. Would you commit suicide because your business was going badly? I hope you answered no -- which means that you shouldn't consider bankruptcy either.
Having had a bankrupt company stays with you for a long time in everything you do: your credit rating, your employment history, and even just in the way you think of yourself day-to-day. It's better to have everything wrestled from your hands than to give it up voluntarily -- otherwise you'll always be tortured by wondering what would have happened if you'd kept going just a little longer.