Tara Dobbs was CEO of Easy Care Restoration Ltd., a full service disaster restoration company. She had to put the company into receivership earlier this year. This is her story.
Sometimes, even when you do all the right things, it’s still not enough.
Seven years ago, when my father was dying from cancer, I took over running his ailing family business . To me, it was a golden opportunity. Yes, I probably paid more than it was worth for my equity, but it got me into the position of being an owner and running a $3 million dollar a year enterprise.
What I didn’t know, was that this business had problems to overcome. A few of these problems were that our reputation in our marketplace was questionable due to neglect of the business while my father was dealing with his illness, the culture within the business was about as dysfunctional as you can get, and the cash flow was horrific.
These three things on their own were each enough to topple the business, and in various ways, each of them eventually did.
I learnt a lot of lessons the hard way. Given this hindsight, what would I do differently? Lots.
- Since I was so green in business (I went from being a financial planning assistant straight to running this business), I would have found an advisor to look over the deal and tell me whether it was a good idea or not to acquire equity.
- Since I didn’t have a lot of connections back then, I probably would have asked my accountant or perhaps a financial planner. Given who I now know today, I would have gotten a fellow entrepreneur whom I respect to look it over.
- I would ensure that a written shareholder’s agreement was in place with my future partner that addressed the possibility of buying each other out, what happens when refinancing is required, what happens if we have a difference of opinion about company direction, amongst other things.
- I would not go into business with my family. Period. Family and business. Do. Not. Mix.
- I would find out from the targeted market what their opinion of the company is. Not just from the existing customers, but people who are not customers.
- Did I mention not going into business with family?
Ultimately, those five things would have radically affected the decision I did make at the time — taking a decision that was made in a very emotional, from the gut sort of way, and made it a much more informed, well thought out choice.
Written by: Tara Dobbs
Tara has four kids, with her youngest being 5 months old. Tara is looking forward to her next big adventure in business. You can learn about what she’s doing next at www.taradobbs.com