It is not all beer and skittles.

Ref Bonanza.com

With significant risks, there are great possibilities. That, we are told, is a sign fortune follows the brave. One of the greatest risks is to enter business using your own money. If the business succeeds the opportunity to make it is before you. The chances are you will have to prove yourself before anyone else will invest anything in something you start from scratch. It gets going, even if you have a lot of money. Be prepared because it will take more than you plan to spend.

A third and fourth career of mine was to help business manage cash. I did this for fourteen years. In my case, I have seen how easy and how hard it is. Many years ago I knew one family where both mum and dad were running a successful business, yet I saw the woman in tears. She remembered when she was told there was no money, none to buy a meal for the family. The mother went through her purse and found a few cents. Francene reached in the crevices of the couch and found a few more. She told me that after robbing the kids piggy banks she just found enough to buy half a dozen eggs so they could eat one night. Even after that,  she said, “Bob had faith this business would succeed.” With the T family it did, however, it took many years living, hand-to-mouth like this before it paid off for them. 

Only last month I heard a similar story of a family that had invested everything in farming. They had faced years of plenty and invested it all:  in more land, in more equipment, in more seed. The current season is the best they have had for 25 years, yet they were at the mercy of the weather for 10 days after they cut the crop before they could harvest it. Even then there was no guarantee until it was in the silo.

Such is the life of those who risk everything in the hope of — One Day. One day we will be ok. One day we will have a holiday. One day we will have enough to buy a new home. One day….

I have also seen people who didn’t have to go through these trials. I have spoken with people who have taken charge of the family business and decided the wisest way forward was to grow the business. The decision to borrow and expand is also fraught. Normally the generation that makes that decision is very aware of the risks and they work as hard as their parents did on the business.  

They make personal sacrifices and measure their chances with the risks of expansion. Like many farmers, they succeed where others might have failed

It is a factor of business the risk is not over even when they make the sale This is especially so when the sale is one made of business terms? We can be owed companiesed,  and owe thousands of dollars at the same time. All party’s reason the job be done before all payments are made.

Not that that is the end. If I return to my story from Mrs T. They sold their business to a multinational competitor after their years of struggle just to see the business close and the products be taken off the market. The millions they received did not make up for the work, recipes, name loss,  and pain – it just helped them have a very comfortable retirement.  

In the third generation of a business, things are more difficult. You take an enormous fortune and spread an enormous fortune, and all you get are arguments. If,  as is done with two very public big names – the money is left to one person to manage things can go wrong.

 James Packer has halved his wealth in a decade. The mental anguish is apparently awful. Noting what our eldest has said of his friends clever enough to have sold businesses for tens of millions. They talk of the pressure they have had not losing what was so hard won. It must be worse when billions are risked.

One fellow, and his brother, inherited Australia’s largest building company about 15 years ago. Most of it went to one grandson. Now, remembering when I was preteen, I travelled around the eastern suburbs in the early mornings with my uncle. Some first workers we saw every morning were stocky Italian chaps. Many of them arrived in this land with no English. The owner of the business knew these men before he came here. As his business grew he remembered these hard men. He knew there was no work for them in the aftermath of WW11, so he called on them. The country was short of tall men, and stocky men were even better for the job.

The jobs they worked at were dirty. The equipment they had was scarce, so they picked and hammered with manual tools forming roadside gutters and curbs. The old yellow grader was the only tool of note I remember with the name Grollo printed on the side.

Fifty years afterwards one grandson managed the expansion of the business across the world. He decided he could manage the building company and its expansion into a whole new field from New York. He lived part time there and wherever else it was possible to live as a jet setter and still monitor the business. All the stocky men had retired or died like his grandfather, so he hired the smartest people money could buy.

Last weekend the building company went into receivership. Daniel has named many reasons the company has run out of working capital, but the one person ultimately responsible for the loss.

It is awful to watch a company collapse. Many times, losing a business can be put down to happenstance. Things like the pandemic are not down to mismanagement. Sometimes companies fail because their customers run out of money. Many times good people get caught by sly operators. That hasn’t happened here, and it will not stop many hundreds of innocent people from being hurt.

I have worked with people on both sides of the ledger. I have seen the damage done to families when ill health is the cause of failure. I have seen the anguish when an owner has to find thousands a debtor cannot pay. Insolvency used to be a crime.

Occasionally it is no one’s fault. All too often it is. The lesson from all this entry is to learn from what I have seen close by — fortune follows the brave. Sometimes. Sometimes the brave one is just a foolish gambler. Sometimes the brave one is a thief that will steal and steal again with a Phoenix movement. Observationally i say if you want to play because you inherit the earth, play but don’t pretend your play is business. Better to invest your money and play with the dividends than play with your capital that is someone once worked hard to build it. 

(Not sure my last statement is correct.) What have you got to say?

prowritingaid.com finds fault with this whole piece. Is it so obvious?

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