Most business owners who find themselves in financial trouble seem to undervalue the importance of luck. Success is rarely a good measure of basic business ability. Rather, and in most small businesses, success is attributable to luck as much as it is to any other cause. Luck plays an important part in the founding and growth of a business.

Luck also plays an important part in the loss of a business. Failure to protect your little niche of the world with adequate entity, intellectual property, and succession planning can take your big fish business swimming in a small pond and pour it out into the ocean. Having gotten lucky with your great idea will make you a target for those who would like to take without earning. So, getting lucky usually just multiplies your problems.

This is particularly true when operating in a banking climate where lenders make liquidity decisions on the basis of current commissions for making the sale ignoring the question of whether a financially savvy person would make the investment at all. The result is that banks will let smart, lucky, small business owners make themselves into targets for predatory acquisition through foreclosure sales without a second thought to whether the purpose for the loan is sound. You may get lucky, and make good use of the cash you borrow against your business equity, but, for certain, you won’t have gotten any real substantive advice on whether you should borrow money from your bank.

Luck has a funny way of turning against us at the least opportune moments. When this happens, it is time to get advice. Bankruptcy lawyers know the real bottom line. They know what really can, and cannot, be done to you when your luck changes.

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