More than a year now into the recession, and, for the first time in my career, having watched a largely suceessful clientele of entrepeneurs weather financial storms, I've learned that business people have handled this recession in different ways, some positive and some negative. In addition, in connection with my banking practice, I have seen other entrepeneurs deal head-on with the financial stress brought on by the recent financial downturn.
1. "Be good to the people on your way up the ladder 'cause you'll need them on the way down..." Lucky Dube, "The Way it Is." Some formerly successful people have not handled the downturn well--financially or psychologically. Perhaps they didn't save for the eventual rainy day, perhaps their business plan was too narrow to envision failure, or perhaps they had great plans, but bad timing. These people have fallen on hard times, and they're not handling it well. They're bitter at the system that they believe failed them. They're angry with the banks foreclosing on their properties and homes. And often, they wonder what has happened to many of the friends they used to have. Were these people just "fake friends" and hangars on? Maybe. But my law partner and I were joking about a particular entrepeneur in the national news who'd fallen on hard times: "What's the difference between the rich Mr. X and the poor Mr. X? The poor Mr. X is an S.O.B.!"
The point, reader, is not that poverty makes someone a worse person--it's that when a person who isn't friendly loses the thing that makes them powerful (wealth), they're still left with all their poor qualities.
2. The contrarian investor. In pure financial terms, some entrepeneurs have excelled in these down times. Yes, I watched them make wealth during headier times. But these individuals were not one-trick ponies: they weren't riding the "house-flipping" band wagon of the real estate boom, nor were they likely part of the dot-com craze a decade earlier (though they might have made money off of both). Instead, these individuals possessed something, by their raising, their genes, or some sort of gift that simply allows them to see what most of us cannot. These individuals have been able to find money-making opportunities in any economic climate, and have actually thrived.
3. The lesson learner. Most entrepeneurs--even the good ones--have still felt the pinch of this latest economic crisis, however. They're NOT making as much money as they once were--and it's not clear for some if they'll ever make that much money again any time soon. Though things are not going as well as they used to, these entrepeneurs are enduring, and are become better people for it.
Some of them have done well enough in the past that they're able to continue to survive off of their savings. Others have had to pare down their business operations--and their lifestyle. Some are even struggling with their finances, but are doing so honestly, contacting the banks, trying to work out solutions while being fair to those whom they owe. For these people, the economic recession has been a lesson. It has made them realize that even the most successful business can fail given the right climate, that even a wealthy man can lose his riches in certain circumstances. It has caused them to remember that money isn't an end-all, and that many of the characteristics that helped them first gain financial success--hard work, integrity, and thrifty living--will also help them weather the current financial storms.
This recession will fade one day, but others will likely come. Entrepeneurs, from a financial standpoint, will you have what it takes to withstand--and even financially thrive--in the next downturn? More importantly, will you have the integrity and character necessary to let you take on life's financial difficulties?
