“Wherever you see a successful business, someone once made a courageous decision.” – Peter Drucker
Are you ready for a treasure hunt?
There we were standing around a hole, shovels in our hands, staring at the treasure chest, barely visible from the dirt. There we were, standing motionless, staring, thinking “well, this is it, the moment. “ The one we all have been waiting for, the moment of truth. Emotions mixed as we anticipate what is hidden inside. Is it the answer? Is it the way out? Is it a new a beginning? Is it the end? The truth is often hard to hear, and even harder to accept. But it was the moment of do or die – fish or cut bait.
Our happy little business that we have literally poured our blood seat and tears into was on the verge of collapse; we were being suffocated by the hands of big business. Everything we worked for was at stake; our business, our lifestyle, our livelihood our sanity, our happiness. We dug deep, we all looked deep inside to find the answers. We needed to find our why; why are we in business to begin with? Is it worth the pain, the heartache, the struggle? Is it still worth the blood & sweat equity? And, by the way, any aspiring entrepreneurs reading this make a note that sweat equity, blood and sentiment has absolutely no value to anyone but you. There is no place for it on a financial statement or asset list on a sale sheet. Therefore it has no influence on valuation of a business and therefore no monetary ROI. I bring this up for two reasons.
First, I have been on both the shopping & buying of the transaction. And, small business owners especially, try to calculate that into the selling price. I truly get it, but a buyer will not pay for sweat equity, blood equity, or sentimental value. It means nothing to them; painfully so.
Secondly, now that the soul searching was done, we had to look at our options. We could close shop and cut our losses. We could valuate our business and put it up for sale. We could try to license our brand and number one sellers. We could partner with a strategic partner/investor. We could get up, clean up, and rise up again.
We chose the latter. The only two viable options for us were the first and last. A sale was not feasible at the time. We didn’t have the leverage with our number one due the recent release of competing products I shared in earlier parts. In addition, we had just recently invested in our growth to add to our basket, increasing our debt. No buyer wants to buy your debt. As far as licensing or a partnership goes, the wounds were too fresh from the copy cats. Not to mention, there was one thing we did I did not mention yet. As soon as the competing products hit the market, we got our lawyers involved. Cease & desist letters were sent signifying the beginning of battle. We would be hard pressed to secure licensing agreement or a partner while in the midst of legal battle.
Let me get back to the treasure chest. Our whys were strong so the choices came down to; are we going to quit or are we going to fight? Obviously, we chose to fight. Thus we started into a long, drawn out legal battle. During which time we refocused and revised our vision and strategy. We leaned out even more, not as lean as needed, like I said before, I don’t like firing people. But, we got back to basics and carried through what we had started before the fall. The gist was rebranding and broadening our product line.
I will go a bit more into specifics in a later story. I share some great lessons for any aspiring entrepreneur out there. For now, let’s take a detour to Europe.
Stay tuned; I will see you next time, in Barcelona!