If You Are Not Taking A Reasonable Paycheck, You Need A Debt Workout.

There is a universal disease that every entrepreneur has. When things get tight, they stop taking a check, or they take an insultingly little one, certainly not enough to live on. Every one one of us has experienced this phenomena.

It makes a certain amount of sense. The entrepreneur is always betting that the next day, the next order, the trend will turn, things will get better, it will catch on, the big order will come… He is so committed that he will gladly give up his paycheck to add operational cash so others may be paid, or a few bills may be paid. When things are just too tight for everyone, the entrepreneur steps back, unselfishly feeding his addiction—the business. His addiction, in other words, the thing that controls him.

People are always asking me how to know when they should enter into a debt workout. It’s easy, now you know the answer: no paycheck! If the business cannot afford your paycheck, then either do the workout and lose the debt or liquidate the business and work out your personal guaranty. Those are your only two choices. Do the debt workout or walk.