The Depths of Business Ownership
Why Are You in Business?
This is a slice from a book I am currently reading, Small Giants, Bo Burlingham.
“Among other things, the experience forced him to think about why he was in business in the first place, and what he was really looking for. It also made him aware of the tremendous responsibility he had for his employees.
Before we got in trouble, it was all about getting more sales and building a bigger company, he said. I didn’t think about the effect of my decisions on other people. I was in denial about that right up to the day we filed for bankruptcy
I understand when you’re in the middle of a financial crisis, you’re surrounded by chaos.
Everybody’s calling you, wanting to know when they’re going to get paid.
Your only concern is keeping your company afloat. When your lawyer says, maybe we should look at chapter 11, you say, hell, no, that is not an option. Don’t bring it up again. You simply don’t accept that you can’t turn things around.
So, you plunge ahead and get swallowed up in the day-to-day minutia and sink deeper and deeper. You need to collect your receivables quicker so you ratchet up the pressure on your customers who don’t like to be pressured.
You need to hold on to your cash so you stall your vendors who don’t like to be stalled. Your employees know something is going on. They’re getting calls of their own.
You’re being isolated. You really don’t want to talk to anybody. You’re in this downward spiral and you can’t cut costs fast enough.
Maybe you last another three or four weeks, but it’s complete torture. By the time you realise you may have to look at chapter 11 after all, there’s nothing else to do.
That’s when reality sets in.
Suddenly, you see what the next step is and you think, oh my God, look at all these people I have to lay off. I mean, even though I put a ton of money back into the company, even though I’d stopped taking a salary and was paying all the expenses out of my pocket, I’d have to cut back on my lifestyle, but I’d be okay.
Here were all these other people who depended on me, and now they’re going to be out of work. If you’re a decent person, if you have any conscience at all you have to say, how did I screw this up so badly?”
Have the conversation early.