I'm still in the middle of starting up my new venture Comrz and closing down my previous company Emojo (I was the majority share holder) so things are a bit raw (and un-finished) but here are some key lessons I've learnt from the process so far.
1) If you're in pain, seriously look at your options
I spent way too long trying to 'save' Emojo, and in retrospect it made my life far harder than it should have been and made me personally much more out-of-pocket.
There are great options in the UK now for struggling companies to do a structured turn-around if you have a business which is viable under all the mess which surrounds it, which may-or-may-not have arisen because of the recession.
If the company is basically sound, and you still have some finances in place, but are collecting bad debts (like we were) and in turn becoming a credit risk (ditto), then the Pre-pack insolvency is a great option. You will need funds, and should contact an insolvency practitioner at the earliest opportunity. Essentially you can buy back your company as a going concern, but with all your debts wiped. This needs to be done in a highly structured manner, and clearly can't be fraudulent, but for a well run company which has been brought down by the economy it's a great option.
The other alternative is a liquidation. You can still buy back all of the company's assets, but have to start from scratch as far as the brand and marketing efforts are concerned. This may be no bad thing if your plight became a headline, and there's nothing wrong with a bit of re-invention. It creates much more of a clear slate, but obviously means a lot more graft required to re-establish yourself. In the end, this was the option I went for. I was able to buy up all the assets of my previous company, including the IP assets, and have now re-sold some of them to my new company to clear up my overdraft.
Looking back, I should have done this a year ago, but was too mentally tied in to my previous venture to look at the big picture. Had I done so I would have been at least hundreds of thousands of pounds better off ... c'est la vie.
2) Aim for a quick turn-around and continuity
We've done everything we could to get things turned around and launched with the new company, and two months after we closed down the previous one, the new one is up and running, and most of our customers have had seamless continuity of dialogue, support and service. We did execute on this very rapidly, and what it has done is give our customers a solid platform (at least for them to be comfortable whilst re-thinking their options) and it's given us the start-up capital we required without seeking any finance.
My recommendation is always going to be to do whatever it takes to avoid taking money from others. Signing up customers quickly to your new venture is a big priority in minimising any external funding requirement.
3) Use the chance of a fresh start
The great thing about starting again is that you have the opportunity for a fresh start, to leave many of your headaches behind and to go with your gut instincts in a way that were previously complicated with contracts and commitments.
Use the opportunity before you get cluttered again.
4) The world has changed since you started your previous venture
It really has. The way the web has come of age in the past year means that companies can be run completely differently today than the could have been even six months ago. Look around, do serious hands-on trials with all the new tech and services and go for it.
5) Outsourcing is much better now than before
I can't recommend outsourcing highly enough. You have to be comfortable with it; have good procedures in place; and most importantly have an excellent communications setup and good skills for it to work. When it does work you'll find yourself slashing your costs, not just by 10% but up to 90%, no wonder India and China are doing so well. The Internet has really transformed the ability to communicate over distance and work together in a distributed virtual enterprise.
Since my new venture is a smaller scale, we're working with the 'generic out-sourcers' such as Google and Amazon, and small companies and individuals. It's fair to say that 70% of what we previously owned and did in-house has now been outsourced. It allows us to focus on our core skills, whilst reducing commitments and greatly improving our bottom line.
6) Distributed working is now a reality
It really is possible to work in a distributed setup, with no office, and using the new setup of professionaly business clubs such as
One Alfred Place, and the myriad of cafes, hotels and other business clubs which are available. More often than not you're going to be more effective at meeting up virtually than physically. All comms can now run through an individual's PC and mobile devices and the emergence of personal Wi-Fi (MiFi) means you can carry your own network with you.
At the start of the new venture we met up for all our project meetings, now they're all done through
Skype and take 30 minutes versus 3 hours of lost productivity (per person) previously. Now we just get together for key meeting, client engagements, and to party.
7) Revisiting the Ideal
When I was thinking and soul-searching about the new venture, I spent a lot of time thinking about all the things that had not worked out, or gone the way I envisaged with my previous venture.
There were a lot of ideas that I had which simply weren't possible the last time round (10 years ago). In so many ways Comrz is the company I wanted to found 10 years ago but was prevented from achieving by real-world constraints. Luckily this time around almost everything has just fallen into place nicely, and after initial (inevitable) gremlins, things are looking pretty good.
8) Learn from your mistakes
It can be painful to review your mistakes (it certainly is for me) but it's essential if you're not going to re-live them.
Have a low annoyance threshold, if something feels wrong with the new setup, nail it straight away, don't take any bullshit. It will only get worse.
9) Love many trust few
The best advise my mother gave me. Keep things simple with the new venture, you'll need to, if only to get through all the corporate paperwork you have to deal with.
Outsource wherever possible, on short-term contracts in case you need to evolve things quickly. Only tie things down once things become settled and always keep things simple (until you've got the scale to have a legal and HR team).
Do whatever you can yourself (and save on the salaries and man management time required). Having fewer staff has a downside in that you need to have great self-management skills, but it will save you big bucks and lots of headaches.
10) Some things take waaaaaaay longer than you would expect
It took two months for me to get all the banking and payment services set up for the new venture, which is precisely six weeks longer than I had anticipated. This can cause chaos when it comes to receiving moneys and making payments. Luckily I was prepared, but I never expected it to take so long.
The other problem is that when starting up you have to be very controlled when it comes to prioritising. It does mean that you'll be doing some essential tasks months after you've started, but so be it.
Wrap Up
My last venture was the first one to actually fail, and as such I've had to learn a whole new set of skills. The best thing was finding a good insolvency practitioner who was able to advise me on what steps to take. Just remember though that they're in it for the money so always research your options further online and seek a second opinion.
This is a great time to be starting up in terms of what is possible, not a great economic environment, but at least your money goes a great deal further than previously and the technology enablers are now pretty much all there.
The key thing with a re-start is that you have to keep things simple, so use the opportunity to either out-source or stop doing anything which was not profitable previously.