Guest Author: Steve Mark
My self-employment journey started like most others. An idea, a dream and a desire to leave behind the 9-5 in pursuit of a better work life balance. I made all the classic mistakes, buying an expensive chair when a cheaper one would do, getting the most expensive business cards when the standard option would have been fine.
I started my business in 2006, a print brokerage with design services. Back in the days before social media had taken hold, YouTube was just getting started, Facebook was being rolled out in US campuses and email marketing was the primary source of lead generation. Looking back, I was so excited and keen to get started I skipped some of the details, like getting a good accountant and a bookkeeper. More on this later!
And then came the crunch!
Business life started well, I picked up some clients, started business networking and managed to start earning enough to pay the bills and re-invest a little back into the business. But it wasn’t long before thing started to cut up rough. In 2008, credit crunch hit, which took the wind out of the business sails, all of a sudden, things got tougher. Both on the home front and in business.
I always felt like I was on the back foot in business. Always trying to chase the money, do the work, find new clients and keep putting enough away to service my tax and VAT. I always seemed to have a healthy surplus owed to me, but it never came in together (I know a few people reading this will sympathise with this scenario).
Iceberg, straight ahead
By now in 2010, after struggling for two years post credit crunch, the iceberg was straight ahead, and I felt like I was the Titanic, heading straight for it. A mixture of naivety, laziness, poor planning and just plain bad money management meant the ship was about to hit the berg. Remember earlier when I said I negated the fact I’d need a good accountant and bookkeeper? I thought I could do it all myself, I thought it would be fine. “One big job and I’ll get everything cleared up”.
One day, there was a knock at the door
“Mr Mark”, asked the tall fella in a grey suit. “Yes”, I replied. “HMRC VAT inspector, can I come in”.
The words I had been expecting but never thought I’d hear. Thud! You could of heard me hit rock bottom from 100 miles away. With my partners’ car clamped, my rented house contents in a walking inventory and the threat of losing everything very real, I didn’t have much choice.
After taking advice from various sources, family, online and Citizens Advice I took the step I never imagined I would and applied for bankruptcy.
My head in my hands
My day in court arrived, the day I would be declared bankrupt. It was a fairly clinical affair. A few words from the judge and an acknowledgement from me that I’d learnt from my failings and that was that, bankrupt.
I remember sat outside the court, head in my hands contemplating my future. Let me be clear, never once did I contemplate anything worse, there was a sense of dismay that my life had hit this new low, but also a sense of the only way is up.
Never give up hope, there’s always a way back
I’d never owned a house prior to bankruptcy. And if I’m honest, I’d given up all hope after. I was 37, with at least a year of being ‘in bankruptcy’ and then at least another 6 years until it came off my credit file. My dreams of owning my own house suddenly died.
After a year in bankruptcy I was discharged. I could then start repairing my credit.
Year two post-bankruptcy saw me get a mobile phone contract, I paid this diligently as if my life depended on it. During that year I managed to get a high interest credit card with a limit of £500. I only used it for food shopping and paid it off in full every month.
A timely stroke of luck
In my third-year post bankruptcy I was offered a permanent position with one of my first ever clients. The job was to head up their marketing division and was salaried. Knowing I needed a steady wage in order to fully recover I took the role and gave up self-employment.
Four years post-bankruptcy I had been in my permanent role for about 18 months and managed to save a couple of bonuses plus put away a little extra each month to build up my deposit pot. For the first time I saw light at the end of the tunnel, along with some key to my house I had dreamed of.
In March 2017, after saving for the deposit and getting a mortgage approval I moved into my own home. Never did I imagine when I was on the stairs of the court nearly six years previous, did I think I would be able to buy a house. Dream achieved! Nearly two years on, I’m in the same house and spending my weekends doing the garden up and making it my home.
What lessons did I learn?
1. No matter what the disaster that hits you in business or life, there is always hope and always a way back.
2. Get a good accountant! And, from day one when you start trading, I wished I had.
3. Be honest with people about your situation. I buried my head, but if I had reached out earlier, I know people would have helped.
4. Surround yourself with a great tribe. I’m a member of lots of positive business groups full of people that I can call upon if I need advice.
5. Always put aside more than you think for your tax. If you put away more than you need, it’ll be like a little windfall bonus at the end of the year!
A final word
OK, full transparency. I’m not proud of bankruptcy, it’s the last option in a bad set of circumstances, but for me, the only sensible option. I didn’t screw over any small businesses I dealt with and paid back what I could before bankruptcy. The advice above is just that, my own advice, if you’re in a bad financial situation, always seek professional advice.
Steve is a marketing consultant that specialises in Growth Marketing and Hacking, finding ways to help businesses grow and reach new audiences at a profit without big budgets! A former business owner of 9 years and board member for 4 years, I understand the pressures and demands of business, and the impact this can have on your life.