What To Do When Your Business Fails

There are an awful lot of websites about how not to fail at a business but not many on how to fail at business. To some extent that is understandable, no one starts a business believing they are going to fail. However, the sad truth is that many businesses do fail within the first year of start up. Some estimate that number at one third by the end of the first two years and sixty percent by the end of four years! No one wants to fail but some people do.

When you are learning to ride a horse, one of the things it is important to learn is the falling technique. No one wants to fall form a horse, but some people do, and if you are one of them it is important to know how to hit the ground in a way that causes as little damage as possible. It is the same with business.

If your business fails, there are some important steps you should take.

• Contact the person that does your taxes to get information on what receipts and paperwork you will need at tax time.
• Contact your creditors and tell them what happened. Ask them to give you a few weeks to figure out what your finances look like. Tell them you will contact them in the next two weeks, and then follow up.
• Just do the next thing. Now is not the time to think about why it happened, or what you should have done. Do the things that must be done and leave the analytics for later.
• Take stock of your finances. Know exactly how deeply in debt you are and what assets you have that you can sell. Be sure that you take an inventory of the furniture, stock, or whatever, and know what belongs to you and what is collateral.
• Talk to your lawyer
• Don't say "Never again."
• Do not put a home equity loan on your hose to pay off unsecured debt! You may feel that that is a great way to handle the problems but in the long run it will add to them.
• Figure out what you can pay to each creditor and come up with a written plan to pay them. Send them the plan by certified mail. Be sure that you do everything you have said you would

After the initial shock has worn off sit down and try to figure out what happened. Make notes. Think it through carefully. Remember that this is not the end of the world, and many people have gone on to be millionaires after their first business, and sometimes second or third, folded. Don't kick yourself over your mistakes but plan on learning from them and moving on.

A failure of a business is not the end of the world, only the closing of one door and the opening of another.