Debt traps when you are an entrepreneur are a nightmare! Entrepreneurs who have gone through a terrible period of debt and repayment know that when you lose money, you lose confidence as well. Rebuilding that confidence from scratch, standing tall in a society that judges you at every point, and finding the support you need when you doubt your capabilities are all real problems that hit us when we fall into a debt trap. It hit me as well.
My entrepreneurial journey started when I founded Quantum Leap in the year 2006 as a Corporate Training Company. 8 years, we built a clientele of 110 corporate organizations. In 2010, I set up 3 more businesses, in the Outsourcing, Recruitment, and Event Management space.
December 2012, I shut down my Outsourcing and Recruitment business after suffering a 70 lakh loss and a 45 Lakh debt. My family had stopped going out and meeting people and collectively we were going through a tumultuous time. I thought that the worst time is upon us and did not know what wrong had I done to deserve this. This is a common, relatable feeling for anyone struggling in a debt trap. You start questioning every action of yours and life seems unfair because all you wanted was to create, build, and grow something which backfired on you!
I understand that and as I delved deeper into the roots of why I fell into the debt trap, I realised that it was a lack of knowledge of how to do business that landed me there.
So, having experienced debt first-hand and then bouncing back to building successful businesses, there are some key lessons that I have learned that I want to share with anyone who needs to get out of the trap of debt.
Here are 7 things you must do if you find yourself in a debt-trap:
- ACCEPTANCE- Accept that you are in debt. It happened, accept it instead of thinking about WHY it happened to you. Acceptance is the first step toward finding solutions and moving on. When you accept this, firstly you feel free. You stop questioning the why and the how and start focusing on reality. When you accept, you make peace with it. That’s the first step.
- FORGIVENESS– Don’t be too hard on yourself and others who are asking you to repay the debts. Your intent behind taking loans or money from others was that you were looking to grow. So, forgive yourself first and then the others who may be talking about you.
- PATIENCE– Don’t become desperate and look for shortcuts to repay debts, they never work! Get-rich-quick methods never work because they may give you instant gratification but they are never viable options for the long term. They are not stable. Be patient.
- COMMUNICATION– Communicate to the ones you owe with all your intent of repaying money and with courage. Tell them that you have every intention of returning the money to them and do not avoid them. The more you avoid them the more they raise fingers at you. You know you took the money for a reason, communicate with them and tell them why.
- ACTION– Rebuild your business or career based on your strengths and capabilities. When you build something based on your capabilities, you already know the fundamentals. It helps in strengthening the base for a scalable and profitable business.
- CONSCIOUSNESS– Repay your debt but don’t spend every penny you earn. Reinvest in your business because it needs to grow. When you start making money again, the initial urge might be to repay all of it but don’t do that. Repay some and put some in your business so that you can start making money through your business.
- LEARNING– Learn your lesson, and never repeat the same mistakes that landed you in debt in the first place. The only silver lining that debts can bring you is in the lessons that you learn. Jot them down, track the root of the mistakes, the actions you took that landed you in that debt and assess how to avoid them in the future.
Falling into a debt trap can happen to anyone. Don’t judge your capabilities based on this. Your capabilities and intent matter more than your situation. When you start looking at debt from a perspective of learning, it lessens the pressures, the sleeplessness, and the dejection.
Do not lose yourself because you have landed yourself in a debt trap. Calm down and strategise wisely, confidently and with full sincerity. How you react to the debt trap determines whether you come out of it or sink deeper!
So, to anyone out there battling with the debt trap, make the most of your strengths and bounce back!
About the author
Rajiv Talreja, Founder of Asia’s Largest MSME Business Coaching Company- Quantum Leap Learning Solutions Pvt Ltd, Author of the Bestseller book – Lead or Bleed, Serial Angel Investor, TedX Speaker and Founder of DreamCraft Events and Entertainment Pvt Ltd, and DreamCatcher Investments Pvt Ltd.