The
resilience
of
American
entrepreneurs
is
not
to
be
underestimated.
In
just
this
past
week,
I've
heard
from
two
business
owners
whose
businesses
were
not
able
to
withstand
the
recession.
Both
realized
they
could
not
survive
and
decided
to
pull
the
ripcord.
In
both
cases,
just
in
time,
before
putting
a
lot
of
personal
assets
at
further
risk.
Not surprisingly, this week's news is that both have landed on their feet and started new ventures from scratch. Owing partially to their own experience and partially to ideas, support and relatioships they've had in place through Chief Executive Boards International, both have brought new ventures to revenue generation and cash flow in record time -- less than a year.
One of these cases provides a number of lessons others wish they'd learned:
Not surprisingly, this week's news is that both have landed on their feet and started new ventures from scratch. Owing partially to their own experience and partially to ideas, support and relatioships they've had in place through Chief Executive Boards International, both have brought new ventures to revenue generation and cash flow in record time -- less than a year.
One of these cases provides a number of lessons others wish they'd learned:
- First,
that
you
need
to
protect
your
personal
assets
from
getting
dragged
into
the
demise
of
a
business.
Unfortunately,
I
have
multiple
friends
and
acquaintances
who
violated
that
rule
and
let
assets
from
qualified
plans,
such
as
401(k)s,
otherwise
bulletproof
even
from
judgements
and
bankruptcy,
get
drained
down
in
efforts
to
keep
banks
happy.
- Second,
that
it's
hard
to
start
a
business
with
no
money
(see
item
1).
In
one
of
these
cases,
the
new
business
started
with
a
$300,000
line
of
credit
to
cover
working
capital
needs
on
the
strength
of
the
founders'
personal
balance
sheets.
Not
without
risk,
of
course,
but
a
lot
different
than
liquidating
personal
assets
and
putting
$300,000
cash
at
risk.
- Third, that bad times create opportunity if you have some dry powder. That same business found Class A space downtown in an NFL city at bargain rates. A larger company shut down its local office, and offered a sublease at 1/2 their primary lease rate, including all furnishings right down to the fax machine and water cooler! Even better, at the end of the remaining lease period the new business owns all those furnishings. Wow, talk about a fire sale!
