Procrastination: What it is and how it plays out with financial problems
In my previous column I wrote about how applying for a debt counseling program works for entrepreneurs. It is clear that there is not one type of entrepreneur and that all these entrepreneurs all have different interests. At my follow-up column it turned out that these interests also emerge during the intake interview. So I told about Ron and Ramona from the documentary Guilty. Ron and Ramona had to go under the protection of their debt counselor after a forced eviction, but she did not feel at all. She wanted to continue to have their own funds, even if it meant that they would not get a new home.
The example in the documentary reminded me of a presentation by Tim Urben from 2015 (http://waitbutwhy.com). In the presentation he explains that he himself is very bothered by procrastination. And of course he is not alone in that. And of course many of our entrepreneurs have that too. And perhaps you yourself too… It is not uncommon for the entrepreneur to report when it is 2 to 12. Sometimes due to fear of failure or fear of the consequences of such an application, but sometimes also due to the reasons described by Tim Urben.
Tim indicates that everyone's head looks like the picture below.
Everyone has the options (that funny guy at the helm there) to make rational decisions. Only why don't we do that? How come when you have an office deadline on Friday you never start working on the project as planned on Monday so that you can finish everything on Thursday with peace of mind? Why is it that we all start en masse on Thursday and sit behind the laptop late into the evening and hit the deadline with huge bags on Friday? That's because that little guy on the wheel isn't alone. He is accompanied by someone who lives alone in the here and now:
De instant gratification monkey only thinks about the here and the now and actually only wants to do fun things. Certainly not things related to deadlines. But debt problems are also something that monkey doesn't want to know about. Our entrepreneurs often go on doing business for a long time and postpone seeking help. After all, it still looks like everything is going well from the outside.
There is often a long way to go in which entrepreneurs do not want to see that their business is actually not going well. After all, that one assignment will continue tomorrow or next week… A period will follow in which one hole will be filled with another and the so-called ostrich policy will be applied. That monkey has a great time during this period. Fortunately, according to Tim, there is not only that monkey, but there is something that influences our decisions:
This is often the moment when people make that first contact with us. The debts take over, for example, there is an eviction or cut-off of water or gas. At such a moment that monkey also has no input anymore and the panic monster determines the call for action ...
During an intake interview, we check with the entrepreneur whether he or she also shows this type of behavior and what we can do about it together. That may be the procrastination mentioned, the behavior that people want to determine everything themselves, as we saw in the documentary Guilty, but other issues are also discussed. Examples are incapacity for work, addiction problems or domestic violence. The large amount of financial worries also sometimes causes marital problems and of course this is also discussed extensively during such a conversation.
Also, a lack of accounting and one or incorrect tax returns are often a problem, which we and the entrepreneur continue to encounter. To this end, we have set up Stichting Hulp Bij Boekhouding (SHBB).
Because the entrepreneur is often the first to stop paying the accountant in difficult times, he gets down in the rain. There are ex officio attacks and the process stagnates, because the tax authorities (rightly) refuses to cooperate. After all, the debt to the tax authorities cannot be established. At SHBB, accountants work at a very reduced rate from a social point of view. They often only charge about 20% of the current market-based hourly rate and in this way things can be rectified within a very short time.
As soon as the returns have been filed and the rest of the financial situation has also stabilized, communication with all creditors will start. We first write to the creditors with a request for a postponement and then also request the amount of the claim. Despite the fact that the creditor is sitting on the other side of the table, you also see the same recognizable behavioral patterns here. Creditors also have different interests and therefore also exhibit different behavior. Sometimes reasonable, but sometimes not. The neighbor from whom the entrepreneur has borrowed money has completely different interests than the bank where he has an open credit. Certainly if the entrepreneur has not only borrowed money from the neighbor, but there is also, for example, a conflict about the property boundary. Sometimes reason and fairness can be hard to find because of emotions.
Where the creditor is actually better off by cooperating on a remission, it may of course be the case that he is not waiting for it at all. He is angry, feels cheated, or may very much need the money himself. At a large bank, the employee may have to adhere to the policy drawn up and not grant the remission.
It is up to our advisers to act as an intermediary and to find the best solution for all parties involved. In accordance with applicable laws and regulations, we offer the maximum achievable to his creditors on behalf of the entrepreneur. We do this in the last phase: the remediation phase. More about this in my next column.
Manon Luitjens-Bakker, team leader insolvency at Zuidweg & Partners