For a caterpillar to become a butterfly it has to digest its own body inside the chrysalis that it constructs around itself. The caterpillar soup that remains carries enough information to rebuild a completely different creature from whence it came and the final result is a lovely butterfly that flaps away on a summer breeze.
The idea of metamorphosis has sat front and centre this week as we deal with the reality of closing down HUCX. The decision that was so hard to make last week has been dwarfed by the reality that we’ve faced as we officially start to digest our own body. We always knew this part was going to be awful, but just because you know it's going to suck, it doesn’t make it less suck-ie.
The worst part so far has to be meeting up with the liquidation team - who are all lovely people by the way. Even given the circumstances, it was easy to empathise with the severity of their day to day work. The lead guy told me some terribly sad stories about having to fire 40 people on the spot after a business they were trying to sell had to close immediately. Most of their staff had been working there for 20+ years.
People are in a state of grieving when they have to close their business, so when the liquidators come in to clean everything up, they’re often not well received. They even have some muscle on site just in case things go pear shaped. Matt and I were obviously on our best behaviour and I think I only cried once. I could’ve cried way more if I wasn’t trying so hard to be brave.
One thing that we’re always believed to be true is that Matt (not me of course) has been cursed with bad luck. There have been a string of unfortunate circumstances that have plagued our progress over the years (i.e. getting kicked out of our old factory) and it turns out that even in our demise we have been hit with an uncontrollable, and completely unexpected bit of bad luck.
The Government has been paying hardwood timber furniture manufacturers $100k to shut up shop as they try to close industries that rely on native logging for raw materials. This affects us because we’re trying to sell similar machinery to an oversaturated market where the normal buyers are being paid to leave.
Part of the liquidation team was the valuer / auctioneer who walked through the factory with a clipboard and a camera taking photos of anything that he thought worth selling. This was the worst part by far. After all the money and time we’ve fed into HUCX, seeing it belittled to tiny dollar amounts was heartbreaking. Stuff like the display TinyOffice that we could easily sell for $15K is less valuable than the temporary fencing that surrounds it in the eyes of the valuer.
Ironically we need that TinyOffice at home now that Matt and I are both working from home in our little rental! Noise cancelling headphones might be great to muffle the gentle hum of public transport but do little for the yelling involved with the morning school routine.
Having never done this before, I’ve been surprised at how serious it all is. I know that sounds silly, but most small businesses evolve from an interest or a passion. There isn’t a tremendous amount of thought that once you have an ABN, staff, payroll you’re just as liable as a company the size of Target. By going into liquidation, regardless of if it's by choice or not, you trigger a series of events that are all very serious.
For example, once the forms were signed, we are no longer in control of anything related to HUCX. We’re not allowed on site and the liquidation team is in control of all of our affairs. In some ways it’s kind of nice that we don’t have to deal with it all but in other ways it's sad because it means we failed. At the moment it feels like we’ve just pulled the lever on a terribly sad pokey machine and were watching the barrels spin to see where they land. Only then will we know how much personal debt we’re in. I’m glad I’ve been training myself to not worry twice so we’ll deal with that when we get to it.
Another interesting thing I’ve learnt is the benefit of having an onsite auction compared to an offsite one. With an off site auction they take everything of value away which means you can hand the factory back to the landlord quicker. This is important because at $13k per month for rent, we’re increasing our debt substantially. With an onsite auction, you get a classic ‘everything must go’ fire sale. This is the best way to clear out a factory as people pick through the remains of your life buying up anything and everything that they can.
We’re lucky that our landlords have been very forgiving and are happy for us to do an onsite auction. In fact they want their factory back for their own business so we’re doing them a favour in a weird way. I was quietly proud when the liquidator said that the interaction with our landlord was probably one of his best. It’s always been important to us (as people and business) that we maintain strong relationships, even when things aren’t going well. The landlord’s reaction and kindness was evidence of that.
It's hard to tell if the worst of it is over now or not. I keep ruminating on what could’ve been and the consequences to come and can feel my anxiety rising but then it dissipates. It never escalates to a full blown panic attack because even though it's awful and sad, it's still the right thing to do.
In fact the week just has been one of the best our family has had in a long time. We’re still very much in the chrysalis, swimming in our own soup, but we also managed to walk the kids to school everyday this week (except today as the weather is terrible in Ballarat). This is something I’ve always wanted to do but never had the time. I’ve also consolidated our home and work bookshelf and now have a mini library beautifully displayed in our hallway. This brings me so much joy.
While this hopefully is a once in lifetime experience for us, we are certainly not alone. ASIC's data shows more than 11,000 companies entered external administration for the first time in 2023-24. Isn’t that extraordinary? While it certainly doesn’t help our immediate situation, it is humbling to know how many people have given their all and still had to let it all go.
We’re not alone and after my blog last week, I’ve had a few people reach out to me with their own stories of closing their business. Everyone of them is as heartbreaking as ours but they still lived to tell the tale. Despite Matt’s curse we feel incredibly lucky that we’ve had so much support from our community. Sharing our story, especially the hard parts, has given us some control over this very new and uncontrollable situation. It’s all part of the metamorphosis.
