Failed Business? Do not close like Mallya !

It is unfortunate situation where you need to close down your business due to losses! You know when the boat starts sinking.  You know it.  

If some top level executives are leaving company, it can be one indication that company is sinking. There is a saying that when boat starts sinking rats jump out first.  So watch out, if rats are jumping out in your company. ( This is useful for employees also :-)

And if you HAVE to shut it down, apart from following the legal exit route, take care of the following.

# Say 'Sorry! We are closed' ..instead of ' We are Closed'. There is lot of difference.

-  I have not heard him telling 'sorry' !

# You may have your eggs in multiple baskets. Ensure that none of the other businesses are affected by this failure....mainly financially.

- He lost much more than he put in King Fisher. 

# Most importantly, never have flamboyant style when closing a company. Some 'drama' will help.   Use some  PR resources to get sympathy ! 

-  He over did his flamboyancy. He had so many friends in Media. Could have used them well.  Once the story is over, no one can help. His Son was better, who vanished from Indian scene early.

# Take employees into confidence and tell them that you are sinking. If they quit, can you stop? I know that you want them till it sinks. But, if you request them to stay, take care of them. Never let them suffer for being loyal to you.  Pay the last penny to the employees. They do not have any other income than what you are paying.

-  Thousands of employees were not paid salaries. That is grossly unfair. We can question why they stayed back. May be because, they loved the company and were promised that they were taken care of? We will never know.

# You are an entrepreneur and know that you are taking risk. You are prepared to lose every thing. But, others are not. They depend on you. Do not cheat them.

- No comments!

# Never default statutory payments. Else, Government will be after you.

-  Every one is talking about TDS of vendor not being credited to Govt.  So is PF of employees ! You can not fight Government agencies, particularly when you are on the other side of the law and all your friends soon will desert you! ( remember Mr Raju of Satyam as well)

# Vendors have supplied to you many things. Keep paying them on regular basis. If you do not have money to pay  $ D , it becomes  $ 2D next month and before you realize it becomes $ 10D and if there are 10 vendors like that the dues will become 10 X  $ 10 D = $ 100 D . And I bet you are in no way to pay.

- it is a sad story and so many vendors may have many stories to tell.

# Do you know where it started leaking (losses, I mean)?  Why could you not plug it?  Is your ego one reason for the leak? Put aside your ego for the sake of company and so many depending on it. Listen to your senior people. Atleast this learning may help you in your next venture.

-  Was takeover of  Air Deccan  necessary? Gopinath may be having his last laugh. We all loved the KFA style and enjoyed the lounges. Yet, it shall not be at the cost of something else.

# If you are availing loans, give proper evidence and do not resort to influencing the  Financial Institutions as their short time temptation may lead them to jails.

- Many may have got influenced and overdid their jobs. And they will now pay for their mistakes.

# Do not close doors for you in starting another company later.

- It is  End-of-the road for him to start a new business in India.

Hundreds of companies are closed every year. It is part of Business. Some succeed and some fail. If you are successful, do not show off! If you fail, do not escape from your liabilities and responsibilities and those promises you made.