5 important things I learned from closing down my business

I owned and ran my own company not too long ago. I had managed to escape the shackles of everyday corporate slavery and venture out on my own. After a few years, the dream came crashing down harder than a 50 mega tonne nuclear warhead. The dream had ended, but, as I found out, it wasn’t truly over.

During the process of closing down my business, paying back those that still required money, and trying to make people happy, I learned a few important things.

Here are the five key points I learned from my experience.

The money you don’t have

There’s a good chance you’ll still owe money to suppliers, customers, and a range of other entities. It’s a crushing experience to look at your financial books and realise how much you still have to fork over, even if there’s no way of doing so at the time.

Whatever you do, do not to downplay or ignore your financial problems or payment requests. The best solution is to approach each company individually and speak to someone in a position of power in person. These individuals are usually more understanding than someone who’s job it is to squeeze money out of you (such as a finance department).

Just talk; most of the time it works and all parties can come to an acceptable repayment solution.

Banks, overdrafts, and credit cards

Banking institutions can be incredibly scary entities. They’re quick to offer customers overdrafts, loans, and credit cards, but when you cannot pay, the smiles vanish, the claws come out, and legal threats are issued.

In my own case, I quickly realised that speaking to a representative in person as opposed to emailing was the best solution. It’s a time-consuming process and there are many things that can go wrong. As with the first point, always speak to your personal business banker face to face and they’ll be more understandable. These individuals have usually been in the industry for some time so you won’t be the first business problem they’ve handled.

Banks are scary, but the people working in them aren’t.

Consolidating debt

Sometimes this works; sometimes it doesn’t. I found the latter to be mostly true. During some point in the closing down process — I haven’t managed to figure out when — you’ll feel as if the world is crashing in on you with the amount of money you owe; Table Mountain crushing you would be less of a strain. It’s at that point you’ll want to pay off everyone as soon as possible with as few transactions as possible. In my opinion, try to not approach consolidated loan companies.

During my research on the subject, I contacted several such companies, all of whom ignored me. Eventually, one of the larger entities were happy to help and listen to my situation. Unfortunately, said company wanted me to take out a loan through them, through the same bank I owed money to. Not only would I still be in debt to that bank, but I would owe them more money with the additional interest.

When I tried to explain my situation again, the emails stopped and I didn’t hear from the entity again.

You did something great

This is where the article starts stops being about the company and more about you.

Towards the end, I started learning more about myself. If you’ve ever up and left a stable employment and income to run your own company and eventually had to stop, there’s nothing to feel bad about. Even if you went through disaster-filled time with agonising depression for months on end, you need to take a step back and look at yourself. You need to realise you did something great and something that not many people can accomplish.

Sure, there are more successful people out there who are driving the car you want and living in the house you dream about, but how many times did they fail before they got there? Or worse, how many times have none of them failed, which, in my eyes, is a far worse than failing.

You’ve learned a lot over the past while, you supported yourself, and you created something people wanted to use, or buy, or envied. We all run into bad patches — some worse than others — but it’s nothing to feel bad about.

You did great.

Don’t undervalue yourself

You’re going to need a steady income to not only live, but pay off anyone that you still need to. You’ll become desperate, think people don’t want to hire you, and apply for jobs that either don’t suit you, or undervalue you. It’s true, I’ve been there.

I turned down a managerial job at one of the largest up-and-coming companies in South Africa because I felt that after what I’d previously done, I wouldn’t be utilised correctly. I also didn’t enjoy the co-owner’s attitude towards my field and skills. Some may scoff and call this privilege to turn down such a job, but I like to think that I dodged a bullet.

You need to realise you have skills that not many people possess. You started a business, closed it down, and now you’re back in the game and looking for work. Any potential employer who gives you strange looks or comments about those skills isn’t worth your time. If they don’t realise what it means to shut down your very own pride and joy, to learn from the process — which may save them as well — then move on. I understand moving on is a tough decision to make in these economically uncertain times, but it’s something to consider.

You did something great. Remember that and maybe one day you’ll do it again.

Oh, and never give away a business plan because you think it’ll get you a job. It won’t.

Feature image: Steve Snodgrass via Flickr