Blog

Jacqui Wilkinson’s adventure tourism business collapsed under the weight of the Covid-19 pandemic in September after operating successfully for a decade.

Wilkinson built Adventure Capital from the ground up. The company offered bike, camping and hiking equipment rentals and ran popular bike tours in Auckland and Wellington.

After an unfulfilled career in marketing and advertising, Wilkinson says switching to tourism in 2011 was like coming home.

“When I got into the industry, I thought, ‘Oh my god, this is the place for me,'” says Wilkinson.

CONTINUE READING:
* Covid-19: Lockdowns are stressful like rocket attacks, says a former Afghan businessman
* Waves of “zombie” business failure predicted as Covid support withdrew
* Covid-19 Level 3 rules: How many stores are allowed to open?

Wilkinson says he’s proud of what she’s built after 10 years of hard work.

At its peak, Adventure Capital served about 10,000 clients per season and continued to grow rapidly.

“Before Covid, we hadn’t seen the extent of what we could have achieved. We were definitely not a sunset business, ”says Wilkinson.

Delivered

Jacqui Wilkinson had built a successful tourism business from the ground up for over a decade, when Covid-19 came to us, her hard work collapsed within months.

In 2019, Adventure Capital increased its sales by 88 percent compared to the previous year and Wilkinson is positive about the future.

But in the past year and a half, Covid-19 has irreparably decimated their business, Wilkinson said.

“We could never have predicted how the last 18 months would go. However, when we realized that the pandemic was going nowhere in the foreseeable future, we came to the decision that it was not worth going on. “

Wilkinson says there are three options for business owners in their position; sell, hibernate or close permanently.

Delivered

Satisfied customers of an Adventure Capital tour group in Wellington in the days before Covid-19. Before Covid, the company would serve more than 10,000 customers in one season.

Selling wasn’t an option because bargain hunters made deals that didn’t reflect the value of their business.

Hibernation wasn’t possible either, as the cost of moving the company to storage was risky if the effects of a global pandemic could last for years.

So Wilkinson took the painful third route of permanent closure.

“When you’re a business owner, you take a risk to get into the business and you take a risk when you get out, people need to realize that,” says Wilkinson.

David Webb, national head of restructuring services at Deloitte, says that during the last lockdown, calls from business owners seeking help more than doubled, reaching the highest level the consultancy has seen since the pandemic began.

Many of these calls are from companies that have a better understanding of the Covid-19 business environment and that they may need to break up.

“This time, people understand which levers to pull and which not. I feel like business owners know if they can turn this ship around or if they need to think about closing it, ”says Webb.

Delivered

David Webb, national head of restructuring services at Deloitte, said the closure of SMB stores could get much worse by early next year.

According to Webb, almost two-thirds of calls were from SMB companies.

He predicts things could get worse for many of these companies.

“I think what we’re going to see is people hold out until Christmas, and next year we’re going to see the real pain that is out there,” says Webb.

Tony Maginniss, director of corporate advisory services at BakerTillyStaplesRodway, says if a business owner is even considering a closure, they need to seek professional advice as soon as possible.

Delivered

Tony Maginniss, director of corporate advisory services at BakerTillyStaplesRodway, says that running a business can be even more complex than starting a business, especially when corporate debt is linked to personal loans.

If the company cannot be saved, it is critical that the directors know what personal guarantees have been given as this can mean the difference between losing a company and losing it all, says Maginniss.

“In the worst case scenario, if your personal finances are not separated from your business finances, you can lose your business, lose your house, lose everything,” says Maginniss.

Maginniss thinks it’s important to consider how things would play out in a liquidation scenario.

“Take a look at which employees the company has. How much is the staff owed? How much IR are owed? Look at all of the assets that have potential collateral and that could be collected. Then estimate what the net realization could be if all creditors are paid, and whether there would be any money flowing back to the director after that, ”says Maginniss.

Lester Bryant went through this process as a business owner.

In 2020, he spoke to Stuff about the process of his business failure and wrote a book about his ordeal.

According to Bryant, it is critically important for the business owner to avoid personal bankruptcy at all costs.

“Company bankruptcy is an admission that it didn’t work out, but you can build on it again. A bankruptcy is almost impossible to rebuild. While the government will forgive you, credit agencies and banks won’t, ”says Bryant.

ALDEN WILLIAMS / STUFF / stuff

Lester Bryant, author of Going Broke, has had the painful experience of losing his business and has written a book for others who have had the experience.

Bryant also learned the hard way that relationships can change when a company goes under.

Banks that find out that the business they loaned to is going bankrupt will be quick to recall the loan, he says.

And banks aren’t the only relationship that can turn sour under pressure.

“I’ve spoken to a lot of people who have had bankruptcy problems and we all found that our accountants wanted money up front and it was becoming very difficult to deal with. Accountants don’t suddenly become your friend when you have bankruptcy problems, ”says Bryant.

During the emotional pressures of a failing business, it’s important for owners to remember to hold on to their values, he says.

“Is there a life like this? Yes there is. One of my court rulings was to liquidate a lot of personal assets so that in the end I didn’t owe anyone any money. Although this decision hurt me a lot, I believe that a clear consciousness makes a soft pillow. “

For Wilkinson, the decision to shut down is one she’s happy about.

“When you are in a limbo of what-if situations, there is no point in jeopardizing your entire financial future. You just have to make a decision, stick with it or close.

“Once you’ve made that decision, everything will be so much better,” says Wilkinson.