Doing Business With The Same Vendors After A Workout
Believe it. After implementing a massive workout in which all unsecured creditors are wiped out, most of the secured creditors are also eliminated and possibly the first secured lender is partially paid, you can open a new business the next day and do business again with most, if not all, of the same people you just worked out and did not pay a single penny in the end. How can this be?
In a word, it’s all about greed, the driving force behind most businesses. The desire to do more and earn more, even with greater risk than one should accept. Business owners cannot say “no” to more business.
Its always a business decision. The vendor, lender, or whoever you worked out understands the high risk of small business. Most successful business entrepreneurs have crashed and burned a few times in their own march to success and stability. They know what happens and how difficult it may be to succeed. They know how easy it is to fail to pay your 941 payroll taxes. Every successful business owner has confronted these issues at one time or another. In fact, they are all thinking to themselves, “It could it have been me.” Thus, if properly handled and properly communicated, and if during the times trouble was brewing you continued to communicate appropriately, doing business after the demise is extremely likely.
No one wants to say “no” to doing business and everyone will understand that you got jammed and lost the inning. But the game has nine innings so you can get up to bat again and everyone will let you play. That is what business is all about–taking risk, winning and yes, sometimes losing. It’s a risk every business accepts and every business owner understands. It’s human nature to forgive and forget and give someone a second chance. If you did your business respectfully and appropriately, you will be greeted with open arms and tighter terms the next time around. Understandably, you may be required to pay cash in advance for a few orders, or C.O.D. until you reestablish confidence and credit. Shortly, you will be back on terms and doing business again, hopefully smarter and better than the last time.
If there are those who will not do business again, certainly there are more suppliers and a replacement can be found. If necessary, if there is a critical supplier that you must do business with, a different workout can be engineered paying back half the cash over a period of time with no interest as a showing of respect, showing the supplier special treatment, affording them a chance for recapturing costs. It’s a demonstration of consideration and it’s probably a good strategy, if necessary, as it is a drop in the bucket compared to the debt you managed to have discharged.
I have infrequently seen a second business effort be rejected by previous business vendors and service providers. Not only can it be done, it can be done with few problems and with great success.