Submitted by Rachel R on Wed, 09/30/2015 - 11:18am
Henry Ford and other business legends used bankruptcy to get back on their feet
Image Source: Flickr User cea+
Business owners and entrepreneurs can use Chapter 11 or Chapter 7 business bankruptcy to help get out of a bad debt situation. Even the savviest of business men and women can get in over their head with debt, particularly when their market or the economy, in general, takes a nose-dive. The bottom line is that there is no shame in admitting you need help and turning to bankruptcy. It is a legitimate and legal remedy to prevent your business from collapse or help close it down with fewer complications and impact on your personal finances.
If you’re contemplating bankruptcy to bail out your business or bring it to a close, here’s a look at five household brand names that also went through bankruptcy and went on to great triumph later. This subsequent success was likely due in a large part to the ability of these business leaders to use bankruptcy to get a fresh start.
#1 Henry Ford
Henry Ford filed bankruptcy not once, but twice prior to finding success. The first company that Ford founded was Detroit Automobile Company that opened in 1899 and was dead by 1901. The company had a couple of politician as investors – Ford blamed them for the collapse of the company – and produced just 20 vehicles before it collapsed. Fresh on the heels of the collapse of his first company, Ford started The Henry Ford Company in late 1901 and that company flopped within 10 months. After two bankruptcies in short order, Ford started Ford Motor Company in 1903 and created a business legacy that is still going strong after more than 110 years in business.
#2 HJ Heinz
No doubt you have a Heinz Company product in your house – and likely more than one. Heinz, Inc is the king of ketchup, mustard and relish, but it was horseradish that started HJ “Harry” Heinz’s legacy. Heinz went into business for himself at just eight years old when his dad gave him some acres to farm. Heinz stated with clear bottles of horseradish, but too-rapid expansion and an economic hiccup saw Heinz end up with $50,000 more in debt than assets. In today’s money that would be equivalent to about $300k in the red. He filed personal bankruptcy and his debt wiped his parents out financially. His family went hungry for a time, but he used bankruptcy to bounce back and created a billion dollar biz.
#3 PT Barnum
If you’ve ever been to the world’s most famous circus – Barnum & Bailey – you know PT Barnum’s name. Phineas Taylor Barnum was an incredible showman. Barnum started as a shopkeeper and was involved with the first official lottery in the US. He ran a newspaper, bought up a number of museums and took his cast of strange individuals he had gathered on tour all across the US and Europe. He also invested heavily in changing public opinion about theater which was, at the time, considered “evil.” But it was investments in the city of East Bridgeport, Connecticut that wrecked his finances. After using bankruptcy to get clear of his debts, Barnum created American’s first aquarium and began his circus at age 60.
#4 Milton Hershey
For chocolate lovers the world over, the name Hershey resonates with “yummy.” Like Heinz, Hershey started in business early – he was an apprentice candy maker by age 15. At 19, he borrowed $100 from an aunt and opened his first candy shop in Philadelphia. That shop was out of business within six years due to his poor health and debts. He then had a string of flopped candy shops in Chicago, New Orleans, and New York. The fourth store sent him into bankruptcy when a gang of kids robbed his delivery truck of all his product. A former employee backed him, and they started Lancaster Caramels. But it was a German demonstration of chocolate at the World’s Exposition that led him to found Hershey Chocolate.
# 5 Walt Disney
You wouldn’t know, looking at the international mega-corporation that Disney is today, that it came after a string of failed enterprises. Walt Disney’s first studio, Laugh-o-Gram Studios, founded in Kansas City made animated shorts shown in movie theaters before the feature films. The animated productions grew in demand such that Disney needed to expand and sought investors to help him grow, but the company that invested in Disney failed. Disney tried to save Laugh-o-Gram by living out of his office and eating canned food while working non-stop, but he had to give up and declare bankruptcy. His last few bucks went to a bus ticket to Hollywood, and the rest is cinematic history.
As these tales of business titans clearly show, filing bankruptcy not only won’t stop you from becoming a flourishing entrepreneur but may be the key to getting you out of a failed venture and on to your next success. Contact the Law Office of John T. Orcutt if you’re a struggling North Carolina business owner that needs help with debt. Call +1-833-627-0115 for a free North Carolina bankruptcy consultation at one of our offices in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.
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