Thursday, January 2, 2014

How it happened

The Family Business

My story is a simple one…sort of!  It wasn't just that I had credit cards that I used to spend a ton of money because that was not the case.  Instead, our problem came from a dream of owning our own business.   Fifteen years ago, my husband and I decided to buy a restaurant.  This was something that he always wanted to do.  Although we had no restaurant experience we thought we could figure it all out.  So, when his idea to own a restaurant came into existence, there was no stopping us. At the time I was a stay at home mom raising our two boys.  Admittedly, I was excited to be the “owner” of a restaurant as well!

I had the real estate expertise to purchase the building in which the business resided and was able to write a business plan to present to the banks for financing.  We were able to secure the financing through the bank that held our personal accounts.   Now mind you, we had very little money to work with but we were able to secure the loan for the property.  To this day, I really have no idea why the bank decided to go out on such a limb for this endeavor, I mean everyone knows that the restaurant business was the toughest business to be in.  Silly me, to be all puffed up with pride because I felt so privileged that the bank lent us the money...they must have thought we were so special that they invested in us!

I must interject at this point that at the time we bought the restaurant, we had perfect credit, had a 6 room house with a small mortgage, 5 automobiles all paid for, a decent income (by our standards), a stock broker with a stocks portfolio and a pretty good financial life.  When we bought the restaurant, my husband had to officially “personally guarantee” almost everything we bought because he was the one with the income.  Every vendor account, every utility and insurance purchased had to be personally guaranteed by him.  We never really thought about the impact that it could have on us someday that we were literally signing our life away.  What the heck, we just believed that we would continue to rise up from day one of the business opening.  I remember saying to someone after the first month we were open that I was able to pay all the bills and still have money left in the account!  Little did I know that it was probably the only month that would ever happen.

The business should have closed probably after year two.  The successful business that we had dreamed of just was not happening!  Our business after 9/11 dropped off considerably and we had no clue on how to get it back.  We constantly needed money and the bank was right there, every time, to hand us a check. BANK “You have plenty of equity in the building, no problem!” ME “ Are you sure because we are spending so much of our own money and are counting on getting it all back.” BANK  “No problem, you have PLENTY of equity.” 

When year number 5 came along, we were deeply in debt, behind in our taxes, unable to renew our liquor license, had a couple of payrolls bounce and many, many more problems. We had no choice but to close the doors. It was an excruciating decision.  It was like when you are at the casino and have lost all that you brought with you but the thought of walking out of the casino empty handed was not good enough.  So then you go to the ATM and pull more money out in the hopes that you can turn it around and win some money to at least break even.  I am not a casino gambler but have gone occasionally so I know the feeling is the same. 

 One week after the decision and announcement was made to close, to our complete and utter surprise,  my husband permanently lost his job of 21 years!  The income that we lived off of and helped support the business was now gone.  I ran the restaurant and was never able to pay myself a salary and that was OK with me at the time because our family was financially supported by my husband’s salary.  Now we had nothing but unemployment for him coming in for a while. 
Talk about scary!  But I just believed that things would turn around.  Like many others in the same situation, you just think things are going to turn around!  At this point, you still do not make many changes in your lifestyle because you just think things are going to turn around!