We’ve talked about this before, but the reason a lot of small businesses go under is because the business owner gives up. Take this recent story of a third generation butcher recently filing bankruptcy in Massachusetts; “There were many times when you walked into work and (would) feel defeated just starting the day,” said Richard Despres, owner of the now-shuttered Normand’s Meat Specialties, “You just don’t know what to do to correct the situation.”
After closing the store without warning in October, Despres filed bankruptcy in December, citing high operating costs, a down economy and competition from “big box” stores, and leaving members of the butcher’s “Meat Club” in a lurch. Sixty creditors, including suppliers and members of the store’s meat club, hold unsecured nonpriority claims, but a court-appointed trustee will only have about $31,000 in assets to distribute. “In a case like this we’ll take a look as to whether there’s enough value in the equipment or furnishings to do a sale,” the trustee said, “The chances are there isn’t.”
There are three big takeaways from this story: a third generation business doesn’t guarantee success; it is commonplace for assets to not have enough value to hold an auction; and failing to have a strategy to compete with the “big box stores” led to the shop’s downfall. Not to beat a dead horse, but we suspect they weren’t GAFA (Google, Apple, Facebook, Amazon) compliant either.