I lost my business and it made me a better consultant

Yes, you read that correctly, and no, it’s not clickbait….

5 years ago, I had a thriving Tagar#startup and I was a proud Tagar#smallbusiness owner, with staff in Sydney and Melbourne. I led a small, happy team of Tagar#cloud business software implementation consultants, and things were going pretty well. I had built my business up carefully and strategically over 5 years. It was my baby. I loved it and I was so proud of what I had done and the relationships I had built.

I realised however, that working fulltime, undertaking a PhD and starting a family was beginning to take a toll. I realised I needed to begin to delegate.

One of my employees put her hand up and offered to take on some larger responsibilities. Let’s call her Penny (pseudonym). She had managed payroll and project scheduling in a previous role, so I gratefully accepted her offer to pitch in and help more. As I stepped back, I began to realise how truly overworked and overwhelmed I had been, and took some much needed recovery time.

It turns out, however, that I let my hand drift a little too far from the wheel. I became more reliant on verbal reports and assurances from my trusty right-hand lady and less on the reports from my Tagar#projectmanagement and Tagar#accounting software. I trusted her and let her take the reins.

Which worked out fairly well, until I woke up one morning to an alert that my business bank account was empty. Once I got over my initial panic and disbelief, I confronted Penny and asked her what was going on. She brazenly informed me that she was entitled to all the company funds and had taken them as wages.

Just the day before, I had signed a document, prepared by her accountant, giving her some shares in my company. Not a controlling stake, just a gesture of good will and appreciation for being so helpful. But that gesture, without the shield of a formal contract, destroyed my business.

I tried everything I could to get the funds back, but since all our arrangements had been verbal and I had given her the access, there was really nothing I could do. She even went as far as to try and personally extort me for the shares I had provided. I had no choice but to close down the entity. I had to kill the business I had spent the 5 years prior building and nurturing. It was truly traumatic, but I had to do it to break free from a toxic and destructive person.

After some investigating, it was clear that she had been skimming from the bank account and lying about the financial position for months. And when I reflected back to some early conversations and odd interactions with her former employer, I realised I was not her first victim. And I am 99% positive I am not her last.

It took me a long time to work through that experience, but there was value. I learned a few very expensive lessons. These are all lessons that I really already new, at an intellectual level, but when someone manipulates social norms and exploits intimate connections, they can be side-lined.

Get Everything in Writing

The smart, intelligent people who prepare business contracts and formalise partnership arrangements are like a set of knights, defending us from these rogue thieves. I will never underestimate them again! I wish a handshake deal could be enough, but when there is money and Tagar#equity involved, get everything in writing and reviewed by an independent, licensed corporate lawyer.

Use a Licensed Bookkeeper

It is so hard, as a small business owner, to justify spending costs on external resources, especially when a task seems easy enough. But the cost, when something goes wrong, is just too high. An independent, licensed bookkeeper is worth the money. They are the first line of defence against fraud. And a good bookkeeper will be proactive and help keep the finances in order to make the necessary business decisions.

Know your Unique Offering

Once the dust had settled and I realised I had lost everything and had to start again, the prospect seemed monumental. How could I possibly pick myself up and make something out of nothing, less than nothing, since I had already spent my savings building the business the first time…. I was forced to confront the question of “how am I any different from all the other consultants out there”? And that’s such an important question. Because we are all different, and we do have unique offerings. And once you really know what your value is, you can network and collaborate without any fear of competition. Even if someone else has a nearly identical business model, we will still see and solve things in different ways. There is a comfort in that.

Build and Lead from Authenticity

That experience made me strip all the layers away. I let go of the ego about building a team, having a multi-city presence and the brand I was establishing. I knew that even if Penny took all my money and my clients, I would still have a unique offering. I looked back at how I had been supporting and mentoring my staff and I realised that my value was in my analytical skills and my unique experiences and credentials. I took a deep dive into why my approach to Tagar#changemanagement and Tagar#processdesign was so different and difficult to teach, and I realised it came from the synergy of Tagar#organisationalanthropology, Tagar#businessadministration, Tagar#projectmanagement, and Tagar#systemdesign.

Designing for Complex Systems

Most people focus on one of those areas, but I see them all as genuinely connected and that is how I approach Tagar#software implementation and Tagar#processdesign. That deep dive galvanised my understanding of how I Tagar#thinkdifferently and approach designing for complex systems. I truly love helping people create order out of chaos and Tagar#sustainable Tagar#workpractice.

Rebuilding from that experience, after the process of searching for and identifying my unique skills and offerings as a consultant has fundamentally shifted how I engage with clients. I have a deeper, more grounded understanding of my value. I don’t get destabilised by difficult stakeholders, challenging environments and problems that seem unsolvable. I have jumped off the deep end into some really difficult contexts and had some amazing experiences with people and rewarding outcomes helping to guide them through change processes that other consultants had given up on.

It’s ok to Fail and Make Mistakes

And my final take away is that it is ok, not just to make mistakes, but to talk about them. I made a mistake in giving Penny access to my business finances. If I had not been overwhelmed I would have seen her deception a mile away. She wasn’t cleaver or cunning. She just played on my trust and good will at a time that I was vulnerable. I let that happen. I have learned a lot from the experience. As a coping strategy I used to joke that it was the most expensive short course in Tagar#businessethics and that I ever took!

Sharing our experiences and owning our mistakes, even in the strange realm of social media, can help others learn. So embrace your network, share the Ups AND the Downs and keep supporting Tagar#entrepreneurs and Tagar#startups. They need all of our experiences.

If you made it this far, I appreciate your attention. And I would love to hear your stories.