Gradually, I changed my perception on the whole situation and decided to focus on the positive sides of it - and how to learn from what I've experienced.
So, I've come up with the following to keep in mind if you're facing a business crisis or struggling to save your company. I hope they're of some use for you as well.
1. A bad business is not getting better the harder you work. Some people run their business from the notion that if they just work harder, the business will succeed. Dead wrong. It doesn't matter if the business concept is bad, the system is not working, the employees are not in their right position, the management is faulty etc. Working harder is not the key. A bad business model can actually get worse if more resources are ut into it.
2. Honesty pays off in the long run. Even though it's tempting to be dishonest with your suppliers and partners when facing a crisis, honesty is the only thing that will pay off long-term. Remember, you will have a life after the crisis as well (hopefully...). Admit you've screwed up. Admit you're struggling. Tell them you're fighting for your life and your business and you have not forgotten them. They will respect your honesty and quite often they will actually help you. I've just experienced the opposite - a partner protecting his "honor" for so long that he ended up owing me and a lot of other people in excess of $150 000 when crashing his company.
I wish he'd come clean earlier. We might have avoided a lot of the damage.
3. Don't burn bridges. When your in a crisis, it's easy to say: "Damn it - I don't care about that supplier, that person or that company. They're not affected by this. I need to cover my own ass". Wrong again. Even though I went bankrupt, I've had a lot of business with people I got to know when running the business. Some of them are also my friends today. People will respect you more when you treat them with honesty and stand up straight, even when your back is almost broken. Get a hold of yourself and have some integrity.
4. Letting something go in time is better than hanging on for your life. This is valid both for the business itself and employees. - If you love someone, set them free, the song goes. It's so true about business as well. Time and time again, I see business owners hanging on to their babies. They're so in love with their babies they don't see the reality. Cut Your Losses. This has been said so many times it's almost getting boring. Still, business owners are refusing to get rid of the things that drag the business down, prevent being efficient and don't make money.
5. Don't hire your friends. At the outset, hiring friends might seem like a good idea. You think you trust them, and you are good friends, right? What could go wrong?
The fact of the matter is: Everyting. Having a friend as an employee opens up for all kinds of problems. Managing friends at work can be very awkward when times get rough. I've had to lay off a friend once, and it's not something I wish on anyone else...
6. Have clear contracts - even with your friends. If you decide to do business with a personal friend, make it a business partnership. When you agree on the way in which you will work together, set up a clear contract. Get a lawyer to help you, it's definitely worth the cash. You might both agree on what the terms of the partnership are. Nevertheless, a good contract removes the need for discussing the finer details when times get rough or the money starts flowing in. This goes for contracts with dealers and sub-contractors as well.
As Sun Tzu said in The Art of War: In times of peace, prepare for war.
7. Open up and listen to advice. When struggling in our business, many of us, me included, think we have it all worked out ourselves. However, this the time to stop and listen to the people around you. Do you have someone who can take a look at your business with a fresh perspective? Get them to evaluate what you are doing and ask for advice.
8. Filter wisely. Not everyone gives good advice, obviously. Filter the advice you get, but be humble. You might need to make some tough decisions.
These are some of the things i've thought about in the wake of the bankrupcy. There's always something to learn whatever happens, be it good or bad. It's all about perception. I know that when you are in the midst of a chaotic situation, it's not always easy to think clearly. However, keeping these points in mind, I will try and avoid doing the same mistakes all over again.
If you have any thoughts on these points, please feel free to comment below.