Death of a Business – Part 3
Now that we’ve got the legal part of a business closing out of the way (see Part 2), we can move on to a more interesting, and relevant topic – the emotional part of a business loss.
Having to close a business, especially in the face of a bankruptcy, is extremely stressful.
What I realized: It may be lonely at the top, but it’s lonelier at the bottom.
After all was said and done, I looked back at what I was going through during the time while I was closing my business. Being a typical male, it’s not that easy to put my emotions into perspective, but I managed. I was surprised how closely my stages of emotions matched the Kuber-Ross model of the Five Stages of Grief. I’ll go through each, and how it matched my situation, and what you can expect in your situation if you are in the process of losing a business.
Stage 1: Denial
This happens a bit before you actually have to close your business, but deep down you know things are on the way downhill. (Read the E-Myth
Stage 2: Anger
Anger. The damaging part of the process that affects the people around you. For me, it was against my partner and a couple of employees. I felt like I was the only one who had the heart and determination to keep the dream going, and they were only in it for a paycheck. That is when it hits that, in reality, employees are only working for you for a paycheck. You have probably went months, if not years, with barely a paycheck, if at all, and you were willing to put in the sacrifice for your dream. (As an aside, my lawyer told me that one of the biggest mistakes a business owner makes is not paying him/herself). I would snap at everyone for not working hard enough, especially my partner, who was supposed to be in it for the long haul. But you have to remember that they have families and responsibilities, and they don’t have the emotional investment in your dream that you do.
You will most likely be angry at yourself as well. But realize that you have tried your hardest, and sometimes there are factors beyond your control that led your business to its demise.
Stage 3: Bargaining
Yes, the bargaining stage. When we get so caught up with saving the business that we promise anything. In many cases, this gets us in a slightly worse situation than we were to begin with. First is getting more money to help you to stay afloat. I went to bank after bank with no luck. I actually did manage to secure an SBA line of credit to keep going for another month. I am still paying that off. (Note – read the fine print about being personally liable).
I also went around to all my customers looking for projects. This is a tough one, because you do not want your customers to know you are in dire straights. By this time all of your vendors know something is wrong, and current customers that you have delivery problems with know something is wrong. Word might be getting around that you are in trouble.
I was out selling harder than ever during this time, but, more often than not, potential customers know when you are desperate. And the business I was in had a six to nine month sales cycle just to get a project. I knew we would not last that long, but I still believed in my dream, and tried.
Stage 4: Depression
This is the stage that really hurts, and that no one but you can go through. For some people, like me, it takes quite a while to get through. Two years for me, in fact. I spend the summer sitting around not knowing what to do, waiting to hear what the lawyers were going to work out, thinking about how I let down my employees who were following me and my dream, my customers whom I made promises to, my vendors whom I owed hundreds of thousands of dollars to, and other small business that I worked with. There were a couple of vendors I owed money to that almost went out of business because of me.
Everyone goes through this during the closing of their dream. Failure was the word for me. I failed. I failed my family, friends, and myself.
Talk to people about what you are feeling. Talk to other business owners. Believe it or not, losing a business happens to more small business owners than you might think. You are not alone, but in a sense, you are. It is very hard. Just remember that you were not the only reason things went bad. Think about it. Learn from it. Make the best from it. And – most importantly – you will move on. Maybe one day to do it all again (although I am sure it feels like the entrepreneurial spirit has been beaten out of you).
Again, if you need to talk about it, call me. I understand.
Stage 5: Acceptance
I saw my business as my creation, something I “gave birth” to, put in my sweat, blood, tears, money, time, heart, and soul into. I don’t think I would call it a fault to say that most entrepreneurs are emotionally tied to their company – in fact, to be successful, you have to have that level of passion and dedication to what you are trying to create in order for it to succeed.
After a while, you accept what happened. You will realize that ‘failure’ is really the wrong term to use for having to close your business. When you are able to look back at what happened without being emotional about it, you will recall the warning signs, remember what was wrong and right, and you will realize that you have learned. And you learned it the good old fashioned way – by going through it firsthand. That is something that no one can teach.
And, in the end, you will realize that having to close your business was, in and of itself, a good learning experience. Next time you go at it, you will know what to expect.
I’m not saying it will be easy after you accept what has happened, and make it through the stages of grief – I will be paying off business bills for the next ten years – but you will know that next time, if and when you are ready – it will be easier. You’ve gone through what 99% of sane people would never risk.
You have gone through it – and survived.
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