Coming Back from Rock Bottom

by David Kagjanich

The Bottom

“Dad, are we poor?”

Our early teen daughter had just finished getting ready for school and was heading out the door when she stopped and asked me that question.

The irony of the question struck me first. when our six-year-old son had asked, “Dad, are we rich?”

It was about seven years earlier when our six-year-old son had asked, “Dad, are we rich?”

Staring out the window into our backyard, I took a drink of my water and turned to my daughter. I looked at her face which was a combination of worry and pleading. I did my best to reassure her.

“No, we are not poor, we are broke. Broke is temporary.”

Not sure if she understood the difference or if it gave her any reassurance. I said, “Don’t worry about anything. Have a good day at school. Things will be alright.”

She didn’t say another word and left for school.

That was the bottom.

Sure, financially we were already there. Our business had crashed. We were sustaining losses at an enormous rate. By that time, we had depleted all our savings, retirement accounts and college savings. We were forced to close three businesses; our house was in foreclosure, and we had no income. We had one business left. Unfortunately, it had just lost $250,000 for the year, had over $2 million of debt and was about to be closed by the county for unpaid property taxes. Past due bills and lawsuits were piling up.

Facing the reality of not being able to provide for your family… THAT is THE bottom.

To tell how we were able to turn everything around would take a book. However, the key is, one person does not take a disaster such as this and turn it around by oneself. One person will need to provide the vision, strength and confidence to make it happen, but it takes a lot of people to carry it through.

The anxiety and sense of panic were frightening. The doubt was tremendously difficult to overcome. When I think back, my strength to not give up and to save the business, and essentially, our lives, came from four different people and four statements.

Our accountant and shareholder asked me if I thought I could turn it around. Normally confident in most situations, I was so shaken by the situation, I heard myself say, “I don’t know.” His response was the first step. “You have to. We have no choice. We will never recover from the debt if we close the business.”

The next statement came from a close friend and fellow franchisee who had fought through his own financial issues when his business first launched. He said, “I’m looking at my financial statement and looking at yours. You can do this. There are some cost issues to fix and build some sales and you can get this to break even.”

Still lacking confidence, ashamed and embarrassed that I had let it get to this point and unsure of what to do, I was close to giving up. Then, my sister, who had been bringing food over to feed the kids, said, “David, you’re smart. You’ll figure it out.” My Mom followed later, saying, “You did it before. You can do it again.”

Without knowing it, those four were instrumental, with seemingly innocuous statements, in getting back on our feet. First, the reality of the situation and the challenge ahead. Second, the hope that it could be done. Third, the building back of my self-esteem and fourth, the reminder I needed that I had done it before, which built my confidence.

That’s the beginning. Pride is a difficult thing to overcome. Nobody wants to seem vulnerable. Sometimes, you need to derive your strength from others. You’re never alone. There are always people willing to help. Once you realize that, it’s as if a cloud releases. You don’t feel worthless and defeated. Other people still care about you and see you for who you were before the challenge.

Making it Happen

Then you must make it happen.

Fifteen minutes before the county was to padlock the doors, our shareholder paid the past-due property tax. Last chance. Time to get to work.

Having to rally the management team and employees was not easy. As usual, honesty is the best policy. It was difficult to sit down with the managers to explain the situation and to inform them of the sales and costs targets we needed to hit. Telling our longterm, loyal managers that we need them to work more hours and take a pay cut was worse. I told them I would understand if they said no and left, but when we survived this, I would make it up to them.

They took the challenge and were the reason we turned it around. Together, we built an astonishing team. We attracted some of the best people we could have ever asked for. With a relentless focus on people, we built the business back.

If you build the people, the people will build the business. We truly had some of the best people working together toward a common vision and goal.

In three months we were at breakeven and were profitable that first year. The business continued to grow and over time, exceeded all expectations and has become an icon in the community. We never forgot what our managers did and rewarded them many times over.

Turning that business around was the most difficult thing I have ever done. I am grateful for the experience because it made me better. It never would have happened without others; first believing in

me and giving me the confidence to start over, and those who worked their tails off alongside us. Forever grateful to everyone.

As John Maxwell said, “Your first step to success is having the confidence you will succeed.”

David Kajganich is one of Pillars of Franchising’s Million Dollar Mentors. He began his career in franchising in 1992 when he became the first franchisee for Buffalo Wild Wings. Within the first year, he reached more than one million dollars in revenue, and for nearly three decades, he successfully ran multiple units until he sold the business in 2020. David was also involved as an area director for a quick service sub sandwich concept as well as for a fitness franchise. Through his experiences, he honed his skills in the areas of leadership, performance coaching, influence and persuasion to help franchise owners get the most out of their managers and employees. He is currently a performance coach through his business, Eagle Status Performance, LLC. You can reach David at david@davidkajganich.com.