When it comes to giving people the bad news that they will be losing their investments of time, money, and hard work because the business is folding, it is never easy news. It is, however, a responsibility the entrepreneur takes on when he or she first takes the risk to start a business. When you deliver the news, you’ll want to do so in an accountable and gentle manner. You don’t want to burn bridges, and you’ll want to leave yourself the possibility of a second chance.
There is no set way to break the news; however, there are some things every entrepreneur can take into account no matter the industry or the temperament of the investors and family members involved.
1. Come Prepared
In order to maintain the relationships created throughout the business building process, make sure you come to the meeting fully prepared to explain why the business folded. Having the proper knowledge of why the company was not able to continue can mean the difference between having a second chance and completely ruining a relationship with an investor.
2. Take Responsibility
Although many businesses fail because the outside circumstances couldn’t be controlled, the entrepreneur must be fully aware of his or her role in the failure, especially if this failure is the result of not recognizing the conditions ahead of time which brought the demise of the business. Taking responsibility will help your investors see how you shoulder the bad as well as the good, which is essentially important to any business – even a successful one.
3. Come with a Plan
If there is any way that even some of the investors can be paid back for their time or energy, the entrepreneur should come with a plan detailing how this is to be done. Money talks in these cases, and if there is just a little to go around, it is best to share so people know they can depend on you in times of loss as well as gain.