What to do when ‘the ship is sinking’

There are so many resource materials available to guide newbie entrepreneurs in putting up their business.
However, while most are engrossed in business start up plans, many may be forgetting entrepreneurs who ventured and failed. The experience is so devastating, not only for the business person, but also to their employees; not to mention the dependents who are relying on the earnings coming from the business.
While most entrepreneurs do all they can to avoid closure, sometimes it is the only choice. Bankruptcy is very difficult to handle. But if this is the sad truth, then you have to draw up plans to minimize the damage. Here are some measures to take when the “ship” is already sinking:
Don’t fret, you are not alone. Studies show that around half of businesses fail during the first five years of start-up.
Accept the reality. Refrain from blaming others. You are the captain of the ship, so you are ultimately in charge. If you blame others then you will miss the chance to correct your shortcomings.
Contact your creditors, and inform them of the status of your business. Ask for extension of deadlines for payment, and enter into a compromise agreement as to how and when they will be paid. Do not run away from your obligations. However, if you really cannot pay then make your situation clear to all parties concerned.
Learn from your mistakes. Never repeat the same errors you committed. Think of the reasons why your business failed. Analyze what went wrong. What can be improved next time? What should not be done? Think of your strategies that did not work. Do a “post-mortem analysis”, and make sure you write down everything that contributed to the failure of the business. If your lack of management or marketing skills is the reason why you failed, then try to improve those skills. If you think your business partner misappropriated the company funds, then do not be fooled next time. Be honest to yourself in making your assessment.
Don’t disregard your employees. Present to them what happened, and make sure you give them their separation pay; in case of closure, half a month’s salary multiplied by the number of years the employee worked for you. Remember, you are just out of business; they and their family may be threatened by starvation.
Plan for the future. Know your current financial status. Are you in debt? Take inventory of your assets and calculate how much is left that you can allocate to venture again in a new business. If you no longer have sufficient funds then you may opt to find a job instead.
Start all over. Stand up and do better this time. Your business failed, but you did not. Move on, and don’t be afraid of trying. You may be scarred, but let the scar give you strength in facing your next battle.
Be strong-willed. Remember, that after you fail, there will be few people who will trust your capability. Only you can maintain your faith in your capabilities. Most judge a person’s character by his successes. But during difficult times, you garner a bad reputation especially with the suppliers or creditors you cannot pay back. The upside is that you will know who your real friends are.
Even if your business failed, it is not the end of the world. Some famous people also failed during their first ventures. Bill Gates’ first business was a failure, and Steve Jobs was previously fired from Apple because of the company’s poor performance during that time. If these business icons had just given up then they would never have become billionaires and the titans of business today. They are just two of the countless entrepreneurs who became stronger from the experience.
It is sad that you have to go through the process, but for certain the failure has made you a stronger, better entrepreneur. I leave a quote by Nobel literature prize winner, Samuel Beckett: “Ever tried? Ever failed? No matter. Try Again. Fail again. Fail better.”

*Originally published by the Manila Bulletin. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.