I've done my fair share of freaking out over the past couple weeks and have finally come to terms with my fate as a business owner with a big stake in the hospitality industry.
I, like you, will probably take some big financial hits because of the COVID 19 situation.
My business is a decent size and if yours is too, you’ll know the pain of the multiple fixed costs that bigger businesses have to pay. These costs hurt very badly regardless of the government supports in place.
Insolvency may happen if this thing drags out. In recent days I’ve learned to accept that.
Owners must prepare mentally to lose everything because, let’s face it, that will be the reality for several of them. This quarantine could last months, which will starve businesses of much needed sales to stay afloat.
I know some of you reading this have already gone out of business. Don’t feel bad about any of it—I’ll probably end up with you. That’s the bad news.
The good news is that even if you go down, you don’t need to lose your cool. You can find peace if you keep the following things in mind.
1. Even if everything around you collapses, you can rebuild it all faster the next time around.
After I was done crying about all the lost business and hits I would be taking from quarantine, I gathered my senses and had an epiphany: My business skills have never been greater than they are now.
In fact, what I’d built prior to this disaster was pretty darn impressive. And I’ve taken it much further, refined it, and evolved it into an entirely different beast than it was when I first started. Plus, I’m mature now. I’ve put away all childish things so my ability to focus on business is much, much stronger now than it’s ever been.
When I started this business, I was still a punk kid. Now, my skills are more diversified: I know how to do the accounting and marketing for two entirely different businesses. I don’t need to find good accountants, lawyers and suppliers for my businesses—I already know everyone.
If I had to start over, I’d still essentially have the same set up as before with all the same things that have produced fruit in the past. If you can relate to any of these things in your own life, being reminded of this will hopefully make your temporary troubles seem less significant. In fact, your skills and relationships virtually guarantee that you’ll be able to rebuild another business (if you have to) based solely on the person you are right now.
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Remember, when you first started you didn’t have any experience, so you had to refine your techniques after making a bunch of costly mistakes. And while starting over at this point in your life may seem like a daunting task, if you had to you could rebuild your business in a fraction of the time it took you to build the one you may have just lost. So, don’t lose hope if you see your achievements crumbling around you—you still have your brain and your abilities.
2. Gather confidence from your ability to sell.
I rest confidently at night knowing that even if everything goes to hell, I can communicate better than the average person, and therefore will always have a place in the market. And while I may experience temporary setbacks in cash flow due to taking on the risks of business ownership, it doesn’t impact my ability to meet new people with a value proposition and make a deal.
Selling is selling. In my life I’ve sold car washes, gym memberships, nightlife and bar consulting services. It’s all the same stuff at the end of the day. So, as long as you know the psychology and how to move people through a sales process, you’ll always have a way to make money. Be confident that your sales skills will always ensure your survival.
3. You can create more wealth in the next 12 months than you’ve in the last 12 years.
This is what Dan Kennedy calls “the phenomenon.” It’s entirely possible for you to hit a freak homerun in the very near future and make money quicker than you’ve ever done over your entire career up to this point. In my life as a consultant and former employee of the bar industry, I’ve met and seen people who started out as a worker and rose quickly to become a multiple bar and/or restaurant owner in a relatively short period of time.
These meteoric rise situations exist, and I’ve met people who have done this. You can also achieve this kind of rise, but it requires speed and a high tolerance for chaos. It will require clear and duplicatable systems for all aspects of your business. It will require radical new thinking about what’s possible and significant changes in how you spend your time, and what you allow to hold your attention.
Read this: Now More Than Ever You Need to Be the Leader
It’s a big proposition that will stretch your concept of what you believe is possible. Whenever you get down about the financial stuff, remind yourself you can hit a hot streak at any time, paying for the next house cash just in case yours is being foreclosed on.
4. Your key investors will probably back you on your next deal.
Losing someone’s money doesn’t necessarily mean it’s the end of the relationship. Many of us have partners involved in our deals who have backed our businesses financially but don’t play an active role in the day-to-day operations.
It’s entirely possible you’re going to lose investors’ money and will have to share the bad news that you’re going to struggle to pay them back. But even if your deal goes down in flames, you’ll have a good chance to come back later in the future with the same team of backers if you handle this situation with class. If you communicate truthfully and often, even if the business and money are lost, at least the relationship will still be there. And if the relationship is still there, it’s highly likely you’ll get their support on your next business deal.
This type of relationship management is also relevant to your vendors—you may be forced into a position where you can’t pay some of them. Telling someone you can’t pay isn’t fun but it’s what you need to do if you want to preserve the relationship for the future.
5. Bankruptcy isn’t the worst thing that can happen to you.
You don’t need to freak out if you’re unable to make big payments because of lost business due to COVID-19. No one is making payments right now and we’re all headed to the same place, which I predict will be a massive influx of bankruptcies that send the economy into hyperinflation. I know the idea of seven years of bad credit sounds like the end, but it’s really nothing to fear for the following reasons.
Many super successful people have gone bankrupt and come back stronger. Dan Kennedy and Donald Trump, for example, are both individuals who have declared bankruptcy and moved onto greater success.
Kennedy has written perceptively on the nature of money and how fear of bankruptcy is based on the illusion that it’s the end of a career. It’s not. I work for several people who have experienced bankruptcy more than once, and guess what? They still own businesses. While some have failed, they’ve always returned with a new business.
One of my best clients has gone bankrupt three times. Three. And he’s still a business owner, calling the shots and controlling his destiny. You don’t have to get depressed if your business goes insolvent. If your business goes bankrupt, let it go bankrupt. It’s not the end and quite frankly, you’re in good company. Just accept it and move on to the next deal.
6. The wealth pyramid doesn’t change in any governmental system.
I know many of you are thinking that somewhere behind all this pandemic stuff is a sinister plot that involves bad people taking power after a population is economically devastated. It has happened in the what was formerly the Soviet Union, Germany, Iraq, and many other countries where maniacs took advantage and filled the void in power.
I understand those fears, but if things change, they change. You can only frown for so long before you must adapt to a new environment. The good news is, your skill will ensure that your ability to earn an above-average income remains regardless of the governmental system that’s in place.
The wealth pyramid basically consists of the top two percent who control most of the wealth, 18 percent of people in the mid- to high-income earning range (where most of you reading this probably are), and 80 percent of people who are basically living check to check or are deemed poor. This doesn’t change, regardless of where you are in the world.
Money has no conscience and moves to people based on skill and respect—it doesn’t flow based on state-mandated taxation and distribution schemes. Those things interfere with the flow of money, but entrepreneurs always find ways to get ahead despite oppressive governments.
So, while I can identify with the loathing that people may have for bigger government, I have to say I’m quite numb to it all now, and have chilled out on it lately because I know my place in all systems has to do with my ability to navigate them. I’ve done well under right-wing, central and left-wing governments. Fearing and complaining about the government is unhelpful and makes you miserable. It’s also pointless. Money obeys the laws of wealth, and government policies eventually submit to them. Rest assured that you can and will find a way to get rich in any government system if you focus on the tasks at hand.
7. Your wealth is in your relationships.
Your real business is not your infrastructure—your real assets are the relationships you have with your repeat guests and ability to find new customers consistently. So, even if all your leases go to crap and you can’t pay anyone anymore, it doesn’t matter so long as you maintain your relationships with the people who pay your bills.
Your entire business could collapse but it doesn’t impede your ability to earn income at all. I know a nightclub entrepreneur who has gone bankrupt more than once and still throws huge parties to this day. Why is he always able to thrive? Because he knows and stays in touch with a lot of party people, and when he summons them to come to one of his events, they come and spend money. Some of his employees who he owed money in the past after he went bankrupt the first time eventually came back to work for him at his next concept. Why? Because he has the customers.
That’s what real entrepreneurship is about: knowing and keeping the buyers focused on you and what you’re doing. If you have good relationships with people who spend money, that’s your real security. That’s your real wealth.
Kevin is a Sculpture Hospitality franchisee with over a decade of experience working directly with bar, restaurant and nightclub owners on all points of the spectrum. From family-owned single bar operations to large companies with locations on an international scale, Kevin works with them all and understands the unique challenges each kind of company faces.
He is the author of a book titled Night Club Marketing Systems – How to Get Customers for Your Bar. He is also a regular contributor to Bar & Restaurant, and publisher of a newsletter called the No B.S. Inventory Control Letter, which is a series of how-to articles, industry-related Rants and “Random Thoughts About Weight Lifting.”