In today’s challenging business environment, many business owners face the new reality that what worked in the past will not work today. Many make the necessary adjustments while others refuse. A few years ago I had a textile client who had severe business issues. The owner ignored his controller’s advice who was concerned that the company’s largest customer had a substantial amount of overdue receivable. When they received another large order, the owner extended a credit line to this customer, ignoring the controller’s advice that their factoring company would refuse to insure the client.
When the customer declared Chapter 7, it had a devastating effect on the business. Refusing to face his reality, the owner invested his wife’s inherence in the business, hoping to keep it going. This didn’t help and my client found himself faced with bankruptcy court. When he came to meet me in my office, he asked me to continue providing him with consulting services, hoping the information would help the bankruptcy court determine Chapter 11.
When I asked him how he planned to pay for our services, since he had already owed us a substantial amount of money, his reply was, “I have been your client for ten years and I need you to help me. If you don’t, I will lose my business.” Working on long term relationships, I instructed my people to provide the necessary information the bankruptcy court needed, incurring an additional amount of unpaid consulting fees. The bankruptcy court didn’t feel that my client’s company was salvageable, declared Chapter 7 and we encountered a substantial amount of lost revenue.
Five years later I attended the IBM business partner meeting in Orlando. At night my wife and I took the bus to the amusement parks. When we boarded the bus, we met my client, who was sitting next to his wife, children and grandchildren. He was uncomfortable seeing me not knowing what I would say. I walked over to him, shook his hand and asked him how he was doing. Happy I didn’t bring up the subject of the unpaid bills he said, “I would like to thank you for trying to salvage my company. I am retried and my family forgave me for investing my wife’s million dollar inheritance in the business despite my children’s advice not to. I am thankful I that have a supportive wife and family.”
Facing My Own Reality.
A few years later I faced my own business reality. At the time I had had a computer consulting firm for 25 years, had a partner who refused to do his share of the work and had highly paid employees who followed his example. Realizing that I must part ways with my partner and change my business model, I spoke with my business mentor about it.
For two years I resisted his suggestion to give up my “old business model” and represent the ERP Software Company I currently do. My business mentor, recognizing the dilemma of giving up my 25-year-old business model said: “you feel your company is your child and you can’t give it up. The reality is you have employees who get paid $100,000 per year who are doing you a favor working. It’s a common issue business owners have because they are emotionally involved and unable to make the logical decision let go of their old business model.”
“Leap of Faith and Find Your Safety Net.”
Attending an 11 day photography workshop in Alaska’s inner passage on a 50-foot boat, I photographed the magnificent scenery of the glaciers and wild life, realizing that I must face my reality and change my business model. When I spoke with our favorite photography teacher and the boat captain about my dilemma, their response was: “when you are ready to face your reality, you will know what to do.”
My photography teacher told me that prior to becoming a well-known nature photographer, she was a psychologist treating women with terminal breast cancer and was divorced paying her two children’s college tuition. Upset about her patients losing the battle with cancer and dying, she decided to give up her practice, opened a chocolate store and became a successful business woman. After her children graduated from college, she sold the chocolate store at a substantial profit, studied photography for two years with famous photographers and became a successful photography teacher in her own right whose workshops were booked a year in advance. When I spoke with her about my business dilemma, she told me: “I learned from my terminal patients how to love life, and not let obstacles stop me from doing what my heart desires. ‘Take a Leap of Faith and You Will Find Your Safety Net.’”
Speaking with the boat captain about my business dilemma he told me that for 25 years he had been a professor and the head of a biology department at a well-known university. Not being happy with his reality resulted in a severe car accident that could have been fatal. After getting out of the hospital and recuperating, he went to his university, quit his job, gave up tenure, bought the charter boat and never looked back.
My photography teacher and the boat captain, who had changed careers and found their happiness, made me realize that I must face my reality and follow my business mentor’s advice. When I returned home from my Alaska trip, I changed my 25 year business model from being a high level computer consultant who met the IBM executives in 1985 in a round table meeting regarding the IBM distribution software, to becoming the “trusted advisor” who represents the ERP Software Company I currently do, and who writes business articles that have been published in major web magazines. Prior to changing my business model, I arranged that my associate, who had been with me 25 years, would be hired by the Software Company I represent and he receive the same salary and medical benefits I provided him. It enabled me to “live with myself” knowing he would not have to pound the pavement looking for a new job.
About SMC & Dani Kaplan:
Since 1980, Dani Kaplan has worked with manufacturers, distributors, food distributors and food processors as the trusted advisor, helping them lower their operating costs, streamline their operations and control inventory.
Dani can be reached at (917) 647-2466 – http://www.smcdata.com/