BankerGirl

Posted by Heidi on April 30th, 2008 in Entrepreneur, career, debt, loans

This is a guest post from my partner, Matt.  Matt is a former photographer - and while I did not know him when he was an entrepreneur, I have enjoyed the stories about his ill-fated venture greatly.  I thought I would share the text from a piece that he did as a design student with you.

My best friend and I went into business together immediately after finishing our associates’ degrees.  We thought we would parlay our combined creative genius into a hugely successful image-capturing empire.  As you can tell by the title of this post, we were wrong.   

Step 1
Choose an industry with a notoriously high failure rate.  I thought that I wanted to be a photographer.  Photography studios have a marginally higher success rate than restaurants (and its common knowledge that 90% of all new restaurants fail). If you know even less about photography than the restaurant business, than opening a photography studio is probably the way to go.

Step 2
Make sure you don’t complete a business plan.  As a matter of fact, it’s best to have no practical business experience. At all. Take a single business class and assume that this is all the information you would ever need to be a successful business owner.

Step 3
Partner with a close friend that also has no experience in running a small business. As long as you have no experience or applied skill in operating a new venture, why not compound the problem and invite an equally inept friend to join you?

Step 4
Buy new equipment and supplies before you have a need for them. Take on significant amounts of debt.  If you have no money to start your new business, it is always a good idea to contact your local banker, and borrow just as much money as they will lend you. Be sure to place everything that you own up as collateral, except the business of course, which is, in fact, worthless, because you have not yet purchased any equipment that could be used as collateral.  It is also wise to avoid contacting an attorney to make sure that you are not putting yourself in a potential liability position.

Step 5
Invest a significant sum of money in leasehold improvements. As long as you are already deeply in debt from over-buying equipment, you may as well sink the rest of your borrowed proceeds into renovating a rental property. This is a great idea because once the money is gone and the space is remodeled, if (and when) the business fails you don’t have any way of recouping your investment. After all of your hard work and substantial financial investment, you can present your landlord with a great new space - which is just a nice thing to do.

Step 6
Place someone with no accounting or bookkeeping skills (ideally yourself) in charge of maintaining the business’ finances. If you have problems with addition and subtraction, you are a perfect candidate to do your own books! Trust the opinion of a clerk who works at Staples, Office Max, or a similar office supplier, as to how to do your bookkeeping (i.e. what accounting log or software you should buy).

Step 7
Open the doors of your business without having any marketing or advertising plan in place. Operate under the “if you build it they will come” mentality. Just do nothing and people will line up at your door and beg for the opportunity to give you money for doing it.

Step 8
Now you are deeply in debt, sitting around doing nothing in your freshly remodeled business, admiring your dry wall skills, and watching as the small number of clients that you have desperately seeking services elsewhere.

After several months with no significant income, you will have to find a way to make your monthly loan payments. Accept a second job working for a company that keeps you out of the state for weeks at a time.  This will make it impossible to make or keep any appointment. Entrust every detail to your “business partner” (refer to step 3). Since he has done less physical work and put up less financial capital than you in this venture, now is the perfect time to give him all of the responsibility and leave him in charge of everything.

Step 9
Hire a newly minted undergraduate to act as your administrative assistant. Put this individual in charge of all bookkeeping, including accounts receivable and accounts payable. Now that you and your partner have done everything possible to run this business into the ground, it is time to give someone else a crack at it. Be sure to hire someone with even less experience than either you or your partner, and even more importantly, make sure to keep everything that you have learned over the past year to yourself. This will make it completely impossible for anyone to have any success at all.

Step 10
Repeat Step 9.
Hire yet another student after the first one completely screws you over and leaves you with a stack of unpaid bills and possible litigation from clients because you took their money and produced no viable product or service.

Step 11
Close Business.  Consider bankruptcy.

Step 12
Hold on to all the equipment that you have purchased and store it in your mom’s basement. You never know when a 10 ft wide roll of background paper will come in handy around the house. Also, lend all of you camera gear out to your friends, because as long as you can no longer depreciate the equipment on your taxes, it may as well still have to suffer wear, tear and misuse.

Stumble it!