Business failure can lead to future professional success; don't look at it as a personal failure.Q. You recently discussed some of the things that should be done if an entrepreneur suspects that his or her business is floundering. Unfortunately, I have no suspicions. After almost four years of struggle, I have come to the personally painful conclusion that I have failed and my venture is doomed. I read a lot about getting into business, but I can find no information about getting out unscathed. Any suggestions? A. If, after preliminary investigation, you determine that the "doo doo" is dangerously deep and that your prospects are glum glum adj. glum·mer, glum·mest 1. Moody and melancholy; dejected. 2. Gloomy; dismal. n. 1. at best, get the right help right away. Bring your attorney, accountant and an experienced closure counselor to the table to develop a formal plan to reconstitute re·con·sti·tute tr.v. re·con·sti·tut·ed, re·con·sti·tut·ing, re·con·sti·tutes 1. To provide with a new structure: The parks commission has been reconstituted. 2. or wind down your business in an expedited and orderly fashion. This isn't a pleasant process, but it is absolutely essential. It could keep a valuable business experience from becoming a professional failure. The first order of business is to conduct an inspection of your firm's financial, operating and marketing dynamics. This diagnostic exercise will help you and your advisers: * Gain a comprehensive understanding of your firm's key strengths and weaknesses. * Assess your firm's viability and determine its prospects for continuing as a going concern. * Determine your options for dealing with the downside and containing losses. * Ensure that you have implemented protections against unnecessary corporate and personal loss. Better circumstances If a bleak assessment is forthcoming and it is determined that your only practical options are a dramatic downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing or reorganization, task your team members and advisers to: * Re-plot your firm's cash flows to maximize their impact. * Renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. obligations to creditors. * Deal with outstanding tax liabilities. * Recast re·cast tr.v. re·cast, re·cast·ing, re·casts 1. To mold again: recast a bell. 2. your company's relationships with banks, other lenders, and investors, including family members. * Preserve essential vendors and customers. If it is determined that your firm cannot continue to operate without temporary protection from creditors, enlist your attorney to prepare to apply for court protection under Chapter 11 of the U.S. Bankruptcy Code Bankruptcy Code may refer to:
Your success in using this benefit depends on your preparations before you petition the court. You and your attorney should: * Document and classify all outstanding debt. * Formulate essential sales, cash flow and income projections. * Identify assets for liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy . * Establish a financial monitoring and reporting system. * Prepare a formal Plan of Reorganization. * Solicit capital for debtor in possession financing debtor in possession financing Financing arranged during the time a company is in Chapter 11 bankruptcy. . While most business owners fear a Chapter 11 filing because of the perceived stigma of bankruptcy, such government protection often helps dedicated and able entrepreneurs get the time and resources they need to put their experience and resources to work under better circumstances. If, in the final analysis, it becomes apparent that your firm will not be able to resolve its difficulties and continue operations under any circumstance, a voluntary or court-supervised liquidation will enable you to: * Sell asset configurations or lines of business to other business enterprises. * Satisfy tax, bank and other creditor obligations to the maximum extent possible. * Dispose of hard assets, inventory and real estate. * Realize maximum value from intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and intellectual property. * Deal with obligations to employees. * File essential tax returns and dissolution documents. * Terminate contracts and leases. * Achieve maximum protection of your personal assets and reputation. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , don't allow yourself to see these events as personal failures. If you see them objectively as external circumstances, you'll be able to identify quickly new opportunities through which your hard-earned experience can be deployed once again to create a new, more promising enterprise. Paul Willax is a professor of entrepreneurship and chairman of the Center for Business Ownership Inc., Amherst, N.Y. If you hove a question or suggestion for his column or to receive a free, weekly e-mail newsletter, "Brass Tacks brass tacks pl.n. Informal Essential facts; basics: getting down to brass tacks. brass tacks Noun, pl get down to brass tacks Informal Brainfood," or Brass Tacks BrainFoodToGo audio PODDZ that con be listened to on computer, iPod or MP3 portable audio players A portable audio player is a personal, electronic device that allows the user to listen to recorded audio while mobile. Portable audio players became possible in the 1970s and continue to be developed today. , write to Willax@TheBrassTacks.com. |
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