If you’re in business for many years or work with people long enough, it’s inevitable that you will experience conflict. Good deals may turn bad. Or even worse, you will be cheated out of a large sum of money. When this happens to you, how do you and your business recover?
Over the past fifteen years as a business owner, I’ve had several conflicts to resolve. They’ve ranged from simple disagreements with employees or between business partners, to corporate theft, and even sabotage. Thankfully, they were all resolved outside of court. Each experience taught me a valuable lesson that I vowed never to repeat.
Most recently, I brought a couple of new partners into one of my retail businesses. These partners promised to take my store to a whole new level. They boasted of their accomplishments, said all the right things, and we signed a deal in good faith. Six months into the new partnership, my co-owners asked me to loan the company a large sum of money to open a second store. Still in the honeymoon phase and excited at the prospect of expansion, I quickly agreed. I was promised a reasonable return on my investment and a bright future for our company.
Sadly, only two installments were paid on the loan, and they were both considerably late. Shortly thereafter, I began getting calls from our bank informing me that our account was overdrawn. Customers were filing credit card chargebacks for unfulfilled orders. As the original owner, I was listed as the guarantor on all financial accounts and therefore had to settle all of them personally, or risk a negative report on my credit.
When confronted, my new business partners became very hostile and blamed me for all of the problems. I learned a little too late that these guys have burned other business relationships and cheated people out of money in the past. I was the most recent casualty.
Within one year, the store was closed, and I lost hundreds of thousands of dollars in assets. Thankfully, I own a few other businesses and I keep them all separate. While this deal did not financially ruin me, it did cause me a great deal of emotional pain. I felt betrayed, and I was angry. How could I let something like this happen?
After consulting with my attorney, we considered three options. First, we could follow my instincts and file a lawsuit against them. Second, we could back a truck up to the store and repossess the remaining assets. Or, finally, we could end the business relationship as quickly and amicably as possible.
We concluded that the first option should be our last resort. The amount of time and money required to win a lawsuit would likely exceed what I would win in a judgment. Don’t get me wrong: sometimes there is a time to fight simply for the sake of honor. At this particular time, however, I had just successfully sold one of my oldest businesses and was already building another. I am a positive person, and I would rather spend my energy growing a business that I am passionate about than being mired in a wasteland of negativity.
The second option would not have ended well for obvious reasons and would likely have resulted in a physical altercation. So, my attorney recommended the third option. Since these men have a track record of bad business dealings, disassociating myself with them as soon as possible was the wisest course of action. My last request was that they return the brand and customer database to me and repay the loan. While I was able to retrieve my customer database and I am salvaging the brand, they have not paid anything further on the loan. And they never will.
While I will never fully recover from this bad experience, I have made the decision to forgive and forget. I am not going to let these narcissists live rent free in my head. Plus, I have learned yet another valuable lesson.
As an entrepreneur, I have concluded that my time and energy would be much better spent making money. So, I challenged myself to grow my new businesses and earn back more than I lost in this nightmare. I have already made half the money back and have had a great time in the process.
I think Frank Sinatra sums it up perfectly: “The best revenge is massive success.”