Where I grew up, filing bankruptcy actually was a proof of being a criminal. Or a loser. Racing your company against the wall was the last thing you would have wanted to accept. Unless you are a fraud. And if that would have happened to your company, you would have been stigmatized, not only by society. For some professions, by law, you are not allowed to run another company in the same business.
Given that failing with your endeavor was not an option, two things logically happen: for one, you would pull every string to avoid the case, and for another, you would never ever let go until there is literally no way out.
I have been there. In my former professional life, I ran an advertising agency. And a combination of bad decisions, terrible financial planning and of course also some portion of bad luck (however, the former were the major reasons!) turned a profitable agency with 15 employees into a rollercoaster of pain, trouble, and fear for employees, partners, suppliers and of course me and my family.
While the dead-end was clear and obvious, I struggled and fought to keep the beast alive. A monthly visit to authorities to settle down-payments of taxes and dues, regular visits to suppliers to trust and keep on delivering, hoping for employees to stay with the company, even though salaries were paid late — all that just to avoid the “worst case”. A combination of ego-game with fear of the uncertain with an unstoppable hope that it will all work out.
In January 2016, I admitted the forlornness to myself — and the remainder of the team. The company filed bankruptcy on Feb 29th, 2016 (what a date!). What approached me as the worst nightmare imaginable, turned out to be the best decision of my life. And yes, there is no flipped life, no rise of the Phoenix, no happy end (so far). I am still paying a lot of money, every month, to reduce my personal debt, inherited from this (ad)venture.
There is a lot of learning and a lot of life, back, but overall a powerful insight, I want to share with you:
No one ever said, “why didn’t I wait a minute longer”
Don’t throw good energy after bad energy. Every entrepreneur will always fight for his company. However, there is a point, where keep on fighting just means falling deeper.
There are loads of situations in life, where we hold tight, where we do not want to let go. Interestingly enough, there is only one occasion, where a lot of people to the opposite: in relationships. When I was young, people got together easily and separated hardly. Now it seems that people are having a hard time, committing towards each other but splitting easily.
In most of the other cases, the truth is: if we have to hold tight, this is already a sign that we should let go. If things work smoothly, we do not have to hold tight, we run with a loose grip and a combination of trust, right decisions, wisdom, and good luck keeps us running. The moment, we have to hold tight, we lose all of the above. And we lose the endeavor.
So we should let go of it. It’s ok. No stigmatizing, anymore.
Still a lot of learning, though. And that’s a good thing.
For your next endeavor.
Good luck!