Rising again after insolvency

BBC figures have shown that small independent businesses are driving a rise in business insolvencies, as the cost-of-living crisis, the changing way we shop and the financial strain caused by the pandemic causing many companies to fold.

But while closing down or losing the business you’ve built up can feel like the end of your career as an entrepreneur, for many it turns out to be the beginning.

“Bankruptcy doesn’t define your worth or your future. It’s a chapter, not the whole story,” says Konrad Bergström, Swedish serial entrepreneur, whose lifestyle business Megascine went under in the early 2000s, leaving him homeless and half a million euros in debt.

“With hard work and determination, you can bounce back, stronger and more resilient than ever,” Bergstrom says. He went on to found Zounds, one of the fastest-growing businesses in Sweden. “I’m living proof that even the darkest times can lead to the brightest days.”

Here, Bergstrom and others give their tips for building back better as an entrepreneur, even after the worst happens.

Take control

Karim Ullah started a media business in 2007, but it closed three years later after being affected by the credit crunch and his own poor health. He later started a restaurant in Stansted, Essex, called Brohmon, eleven days before lockdown hit.

“We nearly lost it all within two weeks of opening, but we did survive,” he says of his second business attempt, which was recently named the best restaurant in Essex by a local newspaper. Ullah credits his success to the attitude he developed after losing his first business.

Find everything that’s in your control and find all the good people you know to help you
We are all blessed with certain gifts, and we need to use them to the full. If you’re good with numbers, use those skills, if you’re good with technology use those skills,” he says.
“There’s no magic trick, just using good old common sense and being good to people. Not all people will return the favour, but you don’t need everyone to do it.”

Choose your mindset

Bergstrom says that, of all the lessons he’s learned from coming back from failure, the most important was that mindset is everything.

“Surround yourself with believers, not pessimists. Don’t let the negativity of a recession blind you to the potential for success,” he advises.

“Bankruptcy doesn’t define your worth or your future. It’s a chapter, not the whole story. Seek support from mentors, friends, or professionals who can guide you. Stay adaptable and persistent in your pursuit of success.”

Do what comes naturally

Veronica Pullen ran a bookkeeping and payroll business before declaring herself bankrupt in 2009.

“I felt embarrassed, ashamed, as a bookkeeper I should manage my money better than this and I thought it meant I was a rubbish business owner,” she says. Veronica took a part-time payroll job but dreamed of being able to write from home for a living. She realised that she was someone who uses social media quite naturally and that businesses would pay for that skill. “Today I help small business owners write words that sell their personal brand services online – sales copy, social media content, and compelling comments/responses,” she says.

“Bookkeeping and payroll were skills I learnt. They were not subjects I loved learning about or work I’d do for free if nobody paid me. “Writing copy, content and comments/replies and online marketing is in my blood. I type to people online because I love it and it is relaxing for me. “That is the key to a long-term successful business in my view. Look at what you do easily that other people come to you for help with because they struggle with it. Then match the parts of your gift to what people will pay for help with.”

Don’t rush the return

Dalia Hawley, from Leeds, lost her sports massage business in the pandemic. “When everything shut down, so did my business,” she explains. “Losing a business is painful. It becomes part of our identity. It’s easy to have a knee jerk reaction when you lose a business.”

Dalia launched a new skincare brand, Dalia Botanique a few years later, but took her time over formulations and research, working in a part-time job to support herself while she transitioned back to being a business owner. “It’s easy to get super excited if you are an entrepreneur,” she says. “I get a big rush from new businesses and new ideas and it’s easy to jump in headfirst.

“But don’t rush, do your market research, customer value proposition, check your competition. Taking your time will ensure a more successful outcome.”

Rosie Murray-West

Rosie Murray-West is a freelance journalist covering all aspects of personal finance, as well as business, property and economics. A former correspondent, columnist and deputy editor at The Telegraph, she now writes regularly for publications including the Times, Sunday Times, Observer, Metro, Mail on Sunday, and Moneywise magazine.