FOR many entrepreneurs seeing a business they have built up fall through is one of the toughest experiences they will ever have.
In the past the genuine entrepreneur has worried about the stigma that often goes with a business failure.
However those who have worked night and day to establish a viable venture should not worry one iota about this, as today as there is a more positive attitude among financial institutions.
Major companies that supply components to the smaller firms, or employ them as sub-contractors, are prepared today to recognise the genuine entrepreneur and the problems they go through – and more importantly the effort they put in to sustain their companies.
These companies are definitely willing to support the entrepreneur who has the drive and the determination to pick themselves up and have another go.
This more business-friendly climate has always existed in the USA. Genuine entrepreneurs, who have had one failure behind them, are given support to try again.
This is because financial institutions recognise the experiences the entrepreneurs gain from their first failures makes them far more determined to ensure they never make similar mistakes again.
It is no accident that generally standards of living in the US are higher than in Europe.
This is because they recognise the prime importance of entrepreneurs in generating wealth.
Men who were pioneers and willing to take risks helped to create the American economy, which is admired today.
Some of them initially failed, but the system ensured they came back again, but much stronger.
The day after your business failure, take one good look at yourself, get the family’s support, then go straight back out determined to build a new venture.
Don’t hesitate as you need to get out in the commercial world as quickly as possible and demonstrate clearly that you are having another go.
See your bank and put your cards on the table. Have an open and honest discussion with them. I am sure that they also will encourage you.
But it is important to demonstrate you are only going to operate in areas which brought you success in the past.
I have said many times in this column that a sound business has to start with a solid customer base.
Go and approach some of the customers who you previously dealt with.
If the first time around you had good relations with your customers and kept them informed of your previous difficulties, I will guarantee that some will be prepared to give you a second chance.
At this point you should be able to produce a business plan.
This will indicate the cash requirement the new venture needs.
To raise capital you need to demonstrate you have a quality and committed management team behind you.
Encourage the best performers in your previous management team and some of the key employees to join the new venture.
Immediately offer them the opportunity to provide capital to secure an equity stake in the business from day one.
Also, are there any personal assets you have which you can either sell on or use to provide security to raise fresh capital?
If you can go to an institution with a strong management team, supported by a number of key employees, who are financially committed to the new start-up, it will make a positive impression.
This is the best way to create confidence in securing support from trade suppliers. Finally, before you approach institutions like a bank or venture capitalist, to complete the jigsaw try to find a well respected businessman, lawyer or accountant who may also be prepared to put some money into the project.
With this total package I can ensure you people will very quickly forget the problems of the past and give you the financial support needed to get the business up and running.
