Olivia Franklin found herself "living in a tomb to [her] dead dreams".
A self-professed "over-achiever" since school, the 30-year-old was desperate for "something different" after the pandemic-impacted years.
Olivia was working as an educator in the prevention of violence against women space when in January 2022, she bought a new notebook. A new notebook to help plan a career change.
"I put a budget together, then I found a space and moved in, in October 2022," Olivia says.
After months of renovations, Follies Bar — a vegan tapas bar in the heart of Naarm/Melbourne's trendy Fitzroy — opened in early 2023.
She lived in an apartment above the establishment and says things started well.
"We had this great beginning" and then "winter hit so hard", Olivia says.
"I had to borrow a little bit to get through that period and everybody was like, 'just wait till summer'."
But things didn't improve. An attempt to attract investors failed and she paid consultants for advice in an attempt to keep things afloat.
"One of the hardest things, emotionally, was standing in that restaurant day and night, looking out the windows and having one or two customers," she says.
In March this year, Olivia says she made the "very, very difficult decision" to sell the business.
It took more than four months but Olivia has now "sold the bar for a small amount, basically to take over the lease", she says.
Olivia owes about $120,000 to creditors, which includes two loan provider companies, a finance software company and the Australian Taxation Office.
She says she's been told she has three options: bankruptcy; a part 9 debt agreement under the Bankruptcy Act (where you pay a reduced debt over a three-year period based on your income); or an informal debt agreement.
Olivia says there's also a small amount owed to suppliers and friends and family who helped out, which she's working to pay off.
Consequences of bankruptcy
According to the Australian Financial Security Authority, bankruptcy is a legal process that can release you from most debts, provide relief and allow you to make a fresh start.
But, being declared bankrupt can affect your ability to get credit, travel overseas or gain some types of employment.
Olivia says a tsunami of "little defeats" has led to this point and while facing bankruptcy "is the bottom of the barrel, at least it can't get any worse than this."
But, she says people around her "have been really freaked out about it" because of the stigma.
Can you come back from bankruptcy?
University of Adelaide Finance expert Daniel Rossetto, a former investment banker, says it's important to realise that bankruptcy or business failure is "actually reasonably common".
"If you look at a lot of successful business people, it's quite common to see that they've had one or two business failures previously".
He says it will inevitably impact confidence and bankruptcy does carry a stigma, but he warned it's only really "relevant to the extent that the person involved actually really starts to believe it".
Seeking help
Mr Rossetto says when a business isn't working, one of the most important things is to "realise as quickly as possible" so things can be "managed and changed".
He says once an issue has been identified, and help sought, a person "might have to stop their business".
"[Or] they might have to change a lot of their personal activities, possibly even their lifestyle, to restructure and get things back onto a sustainable path."
But he adds that sometimes "the person has waited for too long to seek advice".
Olivia wishes she had reached out to some people – including her property manager — earlier.
"It turned out he was actually so lovely and understanding and open to working with me."
Through the process she's discovered helpful services she didn't know existed, such as a debt helpline and a free financial advisor through an organisation called Partners in Wellbeing.
Moving forward
Mr Rossetto says there are lots of choices to make after a business failure but someone who experiences it can return "to a nine-to-five job".
"[They should] start trying to rebuild themselves financially, to rebuild their capital, save money, pay off the debts they owe, that sort of thing".
He says younger people in these positions often have "plenty of time to learn from this experience".
As far as first failures go, Olivia says she's outdone herself.
She has moved back in with her parents and is preparing to return to a job, and is aware she's fortunate to have the option to do both.
"I feel like one of the really positive things is it kind of cracked me open," Olivia says.
She adds that she doesn't think she'd do it again but still has a desire for variety and risk and hopes some of what she's learnt during her ownership of Follies can be put to use elsewhere.
She says her family — who have been a great source of support — would take some convincing.
"My family are like, 'not another business, please. Never again'."
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