Posted by
John Crutchfield on Thursday, November 20, 2008 8:41:57 AM
A long time ago, a young guy decided it was time to set out in his own business. Joe had developed enough skill, he figured, working part time in his field of endeavor to give it a go. And so, he set out to make a name for himself and over the next few years, the business grew quite steadily to the point where he felt the need to hire someone to help share the load.
Soon, Joe thought it was time to open a shop where he could ply his craft and provide better service to his customers. After some searching, he found a good location and laid out the triple net fees the landlord required. He paid the necessary insurance, the water and the heating bills and endless miscellaneous business related expenses including building some inventory and tooling up the new facility.
As the business continued to grow, it was necessary to bring on some extra help, so Joe hired another man and then a couple of part time people a little later. Business was booming and everyone was happy as could be.
With everything going his way, Joe decided six years of paying rent was enough and purchased some land where he and his wife, Nancy could build a solid business to provide for their financial security and to leave something for their children. The building was great. It was carefully designed and very well thought out and Joe was the envy of all his peers. Ahhh, life was good..........too good.
Without warning, only a month after moving to the new location, their biggest client closed it's doors after one hundred years in business. The following year their second biggest customer closed after forty eight years in business. The economy was in decline and work was drying up. Joe found he couldn't plug the leaks fast enough and his ship of dreams was sinking fast.
He tried to hang on to his people, but there was no way. Eventually they all moved on to greener pastures. Thank God they could. Joe wasn't so lucky. He had leveraged his house against the business loan and with every passing day, found himself a little deeper in debt and no relief in sight. His business was dying, his credit was junk and the marriage was suffering terribly. The situation seemed hopeless. It was a dark time the couple would just as soon forget.
For the better part of six long years Joe fought to keep his dream alive, but in the end, he had nothing left to give in this losing battle. The couple had used up all their savings, cashed in their life insurance policies and ate up all the equity in their home trying to keep the business going. Credit cards were piling up and suppliers threatened to shut them off. The commercial property had lost close to half it's value and the bank moved to foreclose. Filing for bankruptcy was the only way Nancy and Joe could save their house.
When it was all said and done, the couple had lost over two hundred thousand dollars. They could have run around blaming every Tom, Dick and Harry, but the truth is they were victims of their own ignorance.
They had made a critical error so common to budding entrepaneurs and corporate CEOs alike. They had failed to plan for the worst case scenario and when it happened, they were unprepared for the ensuing beating. But unlike the CEO, the entrepaneur risks his own money and sweat equity. Failure, for him, is personal.
Nancy and Joe have had to revise their goals downward from building a business to just paying bills from week to week. Still paying off lingering debt fifteen years later and with all that's going on nationally, they are wondering how they will ever be able to retire.
Joe and Nancy's story is only one among millions of hard working people who took a chance and paid dearly. For most of them, it isn't over yet. Like Joe and Nancy, they're watching their home values drop with the housing market and their 401Ks are tanking with the stock market. Their nest eggs are being plundered by a faceless pillager against which there seems to be no defense.
These are the folks who want to know why their government thinks it has to use our money to insulate the UAW from the realities of life and the financial difficulties the rest of us have to suffer through. Surely you won't be surprised to learn we don't endorse $700 billion bailout packages for mismanaged corporations and schemes of spreading the wealth around. Those solutions only reward failure and encourage more of the same.