Spine-chilling fears of small business owners (six of the best capsules of terror – not to be taken at bedtime)

 Alexander the Great battling monsters, the French 15th century miniature (Credit:  Public domain work of art)
Alexander the Great battling monsters, the French 15th century miniature (Credit: Public domain work of art)

My father who retired early at about 55 because of ill-health signed surety for a motor business owned by some real smart characters in Cape Town. He was excited to be a business owner for the first time in his life. Unknown to him the other part owners in the business were spending the money my father had put into the business hand over first. Large bank loans were outstanding.

The bank came and confiscated every asset my father owned including the family house on the side of the mountain at Kalk Bay where I grew up. He never died before his time of a heart attack but because of a broken heart, lying in a cheap boarding house in Wynberg.

Be very careful of signing a surety. Know the danger from your business adviser. Check and double check with your lawyer. I will never sign surety for anyone or anything.

Terror can strike a small business person because of a life-threatening illness. If you have been running your business by yourself, that’s likely to be the end. Someone I know was running a small independent landscape design and horticulture business and was affected by the rare and complicated Guillain-Barre Syndrome. She lost her small business.

Not seeing to it that that your tax affairs are in order can lead to a nightmare in any business person’s life. Just recall the well-publicised Dave King tax saga that ran on for something like 10 years. Small business owners without deep pockets cannot afford to take an extraordinary knock in taxes. Pay what is owned to Caesar.

A small business that is reliant on one product becomes extremely vulnerable as technology changes. Think women’s hair nets, men’s toupees and typewriters. If you don’t see the warning lights in time, your business can dry up virtually overnight. Cellphones that seem like the greatest innovation on Earth, for example, quickly become obsolete. Think Palm Pilot, I-Mate… and who knows yet but Blackberry could also eventually fade into history.

For small business owners over-extended to the hilt and not keeping an ever watchful eye on the cash flow, the terrifying prospect of closure could arrive rapidly. A big customer payment goes way beyond 120 days. A government contract turns sour. A 30-year-old small business I know of closed because they did work for a government department that refused to pay money owed. The company was “established” and among the best in their line of business.

Warning: Beware the innocent looking bookkeeper. Even the bookkeeper who has been working for you for years may be up to something that can have devastating consequences. A business found out too late about the bookkeeper who was living a lavish lifestyle at their expense after chiselling away more than half a million.

What are your spine chilling business nightmares?

If you are starting out, these hazards are not meant to put you off but to make your aware of dragons that may appear out of the blue.

New business ideas can be fraught with danger too unless you know what you are doing. Shaping a marketable idea and crafting a business model around it can be successfully done by enthusiastic amateurs but it’s best to learn from someone with hands-on experience. You’ll find that here.

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