SBA Loan Default: The Single Most Self Destructive Force in an Entrepreneur's Life

Small business owners generally have a common disease....an over controlling ego.

It is understandable in part, the ego part, as an entrepreneur must have a strong ego to stand out in front of the crowds and take the risk of opening up a business. This requires a very strong self image and an abundance of ego. However an ego out of control is a dangerous thing, as it will drive you to make the wrong decisions thinking you are 100% correct, irrespective of what logic would dictate and what the numbers clearly show. Too strong or controlling ego makes you believe you are invincible and take you down a collision course.

No one wants to hear this, because no one whose ego is engaged believes this. 'Not me,' they say...emotionally. ( emotion lives in one's ego). But they are losing money month after month and refuse to make the hard decisions, such as reduce payroll, "can't fire anyone." they say, "I need them."

Best yet is the inevitable issue, the stone cold realization that the business cannot survive based on current revenues and dumping any more money in is folly, if there is any more to dump in. So one should clearly shut it down, but no, they prefer to work it till the doors are shut by some other force to everyone's extreme detriment, much wasted capital and time and the elimination of better options. But ego controls and onward they go right over the cliff, without a parachute or a plan.

I have spoken to many business owners who want us to remove their debt, a task we can accomplish and give them their second chance, our mission, and yet when I ask them if the removal of their debt will turn them right side up...and they ponder and say " well no, but it is still what I want to do as I believe I may be able to make it work without the debt" wishful thinking even though he is not paying his debt service now and is deeply under water unable to survive, operating below break even.

What's the point? I ask...pure ego driven emotional commitment...that will not work out.

Many businesses will not, cannot and should not survive this recession. The point is we need not go down with the ship. There are far better more productive, safer, options including shutting the doors, on your terms.

Needlessly and foolishly walking off the cliffs edge without a parachute or a plan is irresponsible and very wasteful. It maybe even dangerous to one's family and self. Yet many recklessly walk this ego controlled path, refusing to accept or admit that this business must be closed.

It makes no sense. If you are losing money, month after month, take a walk and talk to yourself, ask yourself what you would advise a close friend in this situation and then take your own advise...close it down with a re-emergence or survival plan in hand.

It is the right thing to do. Prepare for another day.