In late January, the business world was rocked (thought perhaps not surprised) as Kodak, truly an icon in the field of photography, filed for bankruptcy. However, for small business owners the filing represents more than just another piece of grim economic news—Kodak’s predicament presents a cautionary tale for business owners everywhere. But as you will see, the new for Kodak, and for many struggling businesses, isn’t all bad.
What can you learn from Kodak?
1) If you can’t adapt to a changing marketplace, you’ll be left behind. Just 20 years ago, Kodak was a dominant figure in the field of photography. But the emergence of digital photography took them by surprise—and they were never able to recover. The message should be clear: just because you are on top of your game today, does not mean that you’ll be on the top of your game tomorrow. Keep an eye on technological developments and on the state of your market in general—don’t be caught off guard.
2) Without visionary leadership, enduring success is hard to find. Enduring success in business is rare. It takes more than luck and financial resources to build a business that lasts—it takes visionary leadership. The late Steve Jobs was just such a leader, and his leadership brought Apple through a difficult decade in the 90s only to reemerge as a dominant force during the decade to follow. In contrast, Kodak’s leadership was unable to identify a vision for the future...and now it is paying the price.
3) Bankruptcy doesn’t mean all is lost for Kodak—or for your business. Here is the good news. Most people associate bankruptcy with the permanent closing of a business—but that isn’t always the case. In fact, Kodak has been granted debtor-in-possession (DIP) financing, which means that they will be allowed continue operations under specific conditions. The cash that will be injected into the business gives management the opportunity to restructure their operation—theoretically allowing them to emerge from bankruptcy as a profitable entity.
Kodak’s failure to adapt to the evolving marketplace led them to their current predicament. But fortunately for them, DIP financing offers an opportunity for them to reorganize and open their doors once again.
There’s good news for you, too: if your business is struggling, bankruptcy solutions such as DIP financing may offer you a chance to turn your business around. Ask your business bankruptcy attorney about the options that may be available to you. No business owner hopes to end up in bankruptcy—but bankruptcy doesn’t have to be the end of the line for your business. In fact, bankruptcy may be the tool that allows your business to return to the marketplace in a stronger position than ever before.
[Image: Bikeriderlondon via ShutterStock]