I have experienced an entrepreneurial failure firsthand. I owned a small used car dealership in Greensboro, NC that was growing and profitable. In 2008 I felt the economy shifting, credit tightening and the cost of my inventory was rising due to the short supply. At this point in the market, there were less people trading used cars in on new cars so the cost of a good used car at the auction skyrocketed. Part of my business plan was to put together my own financing arm which I was already self funding from the profits of the dealership. The tightening credit was causing bank financing to become more difficult. However, creating my own financing company solve that problem and I decided I could afford to pay more for cars at that point because I would not only be making money on the sale, but also on the interest and I would not have to rely on the bank for financing. Then the
proverbial shoe dropped. My lease was coming up and the property that I was looking at purchasing would not be ready for one more year. My landlord had begged me to sign another lease which at this point I was willing to do. I called him and told him I was ready to sign a new lease. The next day he told me my rent would almost double. Given the economic situation that was
occurring and the fact that there was not a piece of commercial property available in the proper location for me I had a tough decision to make. I decided to sell my business in pieces because I did not want to accumulate any debt not knowing how bad the economy would get and how long the down turn would last.
At the time it was heartbreaking to see everything I had worked so hard for all go away, but I knew that with my rent going up that high and the economy going down this path I would not be as profitable, if at all, over the next couple of years. I sold most of my financed accounts and all of my inventory in September of 2008. A month later I knew I had made a good decision because the economy and stock market crashed, but I still felt as though I was defeated. I still have another company, which occupies my time, but the car lot and finance company were what I had banked on retiring from in twenty years. Needless to say sometimes you feel as though you make all the right decisions, but failure still creeps up on you. Looking back the only thing I might have changed was signing a longer lease, but even that is hard to say because I knew I always wanted to own my property and have a service department in the dealership as well and I was unable to do either at that location. Now I look at this as a good learning experience and I am going to be able to apply it to whatever I do next.
Bryan Lawlor
