Dear Aunty B,
I am writing to you for help because I am about to be booted out of my business.
Our one mistake was buying a large business which diverted our focus, got us in too much debt and we are now trying to break up and sell.
We have a solid long-term strategy and the underlying business is profitable. If the economy hadn’t collapsed we would be travelling very well.
I find that there is no help for people like me who have done their best to build a company and are now going to get kicked out through no fault of my own.
I would except it if I had done something wrong or stupid. But I took the same risks that everyone else was taking and no one predicted it is as bad as this. And even the most experienced executives have got burnt, so why was I expected to have picked this train wreck.
Once I am booted out I will have nothing. No company, no employees, no salary. It will be so hard waking up in the morning and not walking into my office. I am young and I would like to start another business but I am afraid of a repeat situation next time the economy goes bad.
Angry and Defeated,?
Dear Angry and Defeated,
Look, I feel for you. I really do. But you can’t blame the economy. While one competitor in your industry is doing badly, another one will be doing well – in the same economy.
The test of a leader is the management of risk. To be successful you must anticipate what might stuff up, and what you can do about it.
How do you work out what might stuff up? You tap into mentors and business people who are highly experienced and been through the wringer several times themselves. And then you have to listen to them! And every time you think they don’t know what they are talking about, you clamp your mouth shut and open your ears. And listen again.
You also have to stay ahead – or at least on top – of things as they unfold. And you need to read about the experiences of other entrepreneurs. That means reading SmartCompany and other media daily!
And by the way; we did plenty of stories warning you of what was coming. We also did stories with seasoned entrepreneurs who told anyone who would listen that a collapse was coming. And they did get out and put everything in cash, and they didn’t get burned. Often we copped criticism from everyone for spoiling the party and “being negative”.
So you have not made one mistake. You made some large mistakes. They include not understanding your risk exposure, not building in resilience or shoring the business up for difficult times, not getting the right advice, which would have advised you of the dangers of acquisition and over exposure, not understanding banks, not staying focused, not reading the economic landscape and so on.
But of course you still start another business. Do your best to clean up the mess in an honest and ethical way, dust yourself off and go and have a holiday. I would give it a few weeks before you are planning your own business again.
And rather than blame the economy, understand the mistakes you made and realize that you have been given a valuable gift: Lessons from an honest failure.
Your Aunty B.
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