Excerpt
INTRODUCTION

Owning a successful small business is everyone’s dream at one time or another. For only the self employed are truly free. This revelation first came to me after I graduated from UCLA in the late 60's. After having struggled to get through college with a wife, two children, and another on the way, I was excited about the prospect of getting a job and finally starting to live the American dream.
After pouring through the classified ads in the Dallas Morning News I made a list of interesting jobs that were available. There were quite a few, so I felt optimistic and started calling and lining up interviews. But when I started actually meeting with prospective employers it wasn’t long before an ominous feeling came over me. Most of my interviewers had a somewhat arrogant attitude and showed me little respect. They weren’t at all interested in selling me on the job, but only concerned with how I would fit into their operation. This was logical but also unsettling and made me realize that once I went to work for someone else, I would be under their thumb and forced to do exactly what they wanted.
This gave me pause. Did I want my life and destiny in the hands of someone whose primary concern was their bottom line or personal profit? Someone who might promise me the stars to motivate me but then lay me off the moment I didn’t fit in to their business plan? Was this the American dream I had worked so hard to achieve? I had heard about factory employees being laid off after years of service with little or no notice but hadn’t given it much thought until then. Would this happen to me? Could I one day receive a pink slip instantly voiding years of hard work? Could I afford to give away this much control over my life? The answer was obviously no, so my job search came to a abrupt halt.
But if I couldn’t work for someone else it seemed working for myself was my only option. The problem was I didn’t have a business or profession to sustain me at the time, so much to my chagrin I realized I needed to either start a business or go back to school and earn a professional degree. Having neither the cash, credit or knowledge to start a business, I opted to go to law school. I wasn’t excited about going back to school. School had been difficult and tedious for me, but I realized I had no choice if I wanted to be truly free—free to carve out my own destiny in life and to achieve as much as my talents and ambitions would allow.
So, my wife and I struggled for three more years, both working while I went to SMU Law School. It was difficult but we knew our hard work and sacrifice would pay off in the end. After graduating and passing the bar, it took me almost a year before I was able to hang out my shingle and start the practice of law. Fortunately, I had been involved in politics and got to know a lot of successful businessmen, so it wasn’t long before I was quite busy. Even so, being naive like most new entrepreneurs, I made the same mistakes I’ll be warning you about later on as we take a look at the perilous task of starting a new business.
Being an entrepreneur myself I became interested early on in representing other small business owners in the myriad of problems they faced everyday. In time it became my specialty of sorts and over the years I have presided over the births and deaths of hundreds of small businesses. As an attorney, I have watched many of them grow, mature, and thrive, but I have seen many more stumble, fall, and die.
It is painful to see an entrepreneur, once so full of hope and excitement, suddenly desperate and defeated. I am saddened when I drive down the street and see an empty storefront, as I know someone has suffered an immeasurable loss, and endured extraordinary grief and pain trying to save their piece of the American dream.
There are few experiences in life as painful and brutal as the failure of a small business. For a small business conceived and nurtured by its owner is like a living, breathing child. Its loss is no less traumatic than losing a loved one. After all, a business owner spends most of his waking hours at work. He will invariably become very attached to it, particularly if it is the business he loves and the one he has always wanted to pursue.
Inevitably the business becomes an extension of the owner himself. When it is ailing, he is ailing as well from stress and worry over whatever problems the business is facing. When the business is thriving, he will be happy, confident, and enjoying life to the fullest. If the business fails, the owner will feel like a failure and suffer deep emotional scars that will greatly impact his personal life for the rest of his life..
With business failure often comes marital strife and divorce. I don’t claim to be a psychologist, but every day I see husbands and wives torn apart because one blames the other for a business failure. Or, if they don’t blame each other, they are often so tired and battered from battling with creditors that they give up on the marriage. The sight of each other only brings back bad memories. Too often the unhappy couple opts for divorce. If the marriage does survive, it will never be the same.
Having watched my small business clients closely over the years and having operated my own law practice, I have come to some conclusions about why some businesses succeed while others fail. The sad fact is that many of the businesses I have seen fail could have been successful had they been properly managed. The good news is that it’s not too late for anyone still in business, even if only holding on by a thread. Once you realize you are in trouble there are a myriad of things that can be done to turn things around.
Don’t get me wrong. This book doesn’t contain any magical formula for success. Turning a business around requires hard work, discipline, and sacrifice. But what I hope this book will do is give the reader insight into why so many small businesses fail, allow them to identify their own shortcomings, and provide solutions and strategies that can help turn around an ailing business.
This book is intentionally written in a simple, informal style for the average business owner rather than for college graduates or MBAs. I’ve found that the cause of business failure isn’t just a lack of education, experience, or business training, but just as often a lack of common sense. Often small business owners, or entrepreneurs as I will call them from now on, do things they know are stupid and reckless. Why? Because entrepreneurs by definition are risk-takers. They like to experiment and do brash things that may only have a slim chance of success. They are the eternal optimist and often have unrealistic expectations.
Obviously there are a lot of different kinds of small businesses, but for the purpose of this book that doesn’t matter. I don’t intend to dissect the workings of any particular type of business. I have found that most people who go into a business know the basics of that particular enterprise. They have either worked for someone else in that field or have been trained somehow to perform their trade. What they usually are lacking is basic business training, education, or experience.
The knowledge I have learned over the years has come primarily from trial and error rather than from a textbook or classroom instruction. Sometimes I’ve learned from my own mistakes, but more often it has been from the mistakes of my clients. Unfortunately, clients usually come to me after they are in trouble rather than consulting with me in the beginning, and possibly avoiding the problems that then confront them.
Although my major at UCLA back in the late 60s was political science, fortunately, I did minor in economics. The business courses I took were helpful to me when I started in law practice in 1976. More importantly was the on-the-job training I received at Metropolitan Life Insurance Company. While I was in law school I had to support my wife and four children, so I worked full time selling life insurance. This wasn’t a glamorous job, but I did learn much about financial and business planning—something that had scarcely been mentioned in high school or college.
This book is not intended to be a manual or reference book. It is my hope that it will be interesting, entertaining, and informative. I fear too many self-help books get stuck on a shelf and never read cover-to-cover because they are too much like a textbook. This book is about adversity and how to overcome it. Its full of practical advice and ideas on how to deal with just about every adversity an entrepreneur might face.
Go Broke, Die Rich is full of real life events that should be of interest to any entrepreneur. Obviously, the names and locations have been changed and the facts altered enough such that no confidences will be breached. Hopefully, you will be able to identify with the characters in these stories and understand the problems they face. If you are an entrepreneur, you will no doubt be facing similar problems and can learn from the mistakes made by the entrepreneurs in these stories.
As needed, I will provide legal and business advice but it will not be technical or hard to understand. It is not my intention to burden you with the complexities of the law, but simply to give you ideas and alternatives that will provide direction and avenues to take toward solving the problems faced by entrepreneurs.
I consider every business failure a tragedy and, when it is one of my clients who goes down, it is even more troubling. I often lie awake at night wondering if there was something else I could have done to save a client’s business and spare him and his family the dire consequences of a business failure. My only hope is that this book will help other entrepreneurs save their small businesses so they can live truly free and remain in control of their destiny.