HomeEntrepreneurAdviceAgainst the odds: How I came back after being defrauded

Against the odds: How I came back after being defrauded

Each Tuesday we’ll feature a business that’s endured an incredible challenge. This week, Damien James talks about how when a serial fraudster stole money from him, he was forced to rebuild his podiatry company from the ground up.

Despite starting off with the best intentions, sometimes it’s not your fault when your business goes under. That was the case for Damien James, owner of Aged Foot Care, Australia’s leading aged care podiatry company.

“We believe emotional comfort is just as important as physical comfort, so we’re about creating healthier feet and happier hearts. Our goal is to help create a world where residents living in aged care are joyous and optimistic,” James told Dynamic Business.

In 2006 however, things were not joyous and optimistic for James. After one particular incident, that sparked his suspicions, James organised for an external audit of the company and came across a nasty surprise.

“It all started to unravel from there. A trusted employee, who I subsequently discovered was a serial fraudster and convicted conman, stole $300,000 from my business. But that was just the tip of the iceberg,” James said.

After he discovered what had happened, James was shocked.

“My immediate reaction was ‘Oh shit!’ I felt sick to my stomach, because someone I trusted had betrayed me, I couldn’t believe this was happening to me.”

As the investigation into what occurred continued, more was revealed about the fraudster and his abilities.

“This person had a long criminal history, and what compounded the problem was while the investigation into the fraud was underway, this same guy set up in opposition to me, and offered my staff $2000 a week to quit working for me immediately, and join his new company. As a result I lost heaps of staff and contracts with aged care facilities, and within a few weeks I was forced to put the business into liquidation. My world collapsed, I lost everything, and my professional reputation was also in tatters.”

“I considered walking away from the industry, I’d had enough, I wanted out. But I didn’t leave, and sticking with it was the best decision I made.”

Despite losing everything, James stuck it out and managed to rebuild: “This time I knew I had to approach the whole thing differently. I had to do it smarter and better, I didn’t want to go through another disaster again. I gave myself 18 months to rebuild something really special. I was obsessed about building solid systems, incredible recruitment processes and financial reporting mechanisms. Every cent we made was ploughed back into strengthening each of those fundamentals. I didn’t even consider marketing the new business until that solid platform was established. I knew I wasn’t going to get a second chance to re-establish my credibility so the goal was to build Australia’s most respected podiatry team, rather than the largest or fastest growing.”

James learnt a lot of lessons during this time and added to his body of knowledge to ensure this would never happen again.

“I knew I needed to look at myself, and the way I’d been doing business. I accepted full responsibility for what had occurred. I’d employed the ‘bad apple’ and I had taken my eyes off the ball. There was no one else to blame except me.

“I learned everything I could about myself. I wanted to know why I had made the choices that led to some really bad outcomes. I completed several personality profiles so I could better identify my personal constraints, strengths and communication style.

Once I’d learned more about me I set about improving myself. I made a commitment to get smarter, enrolling in a Masters of Entrepreneurship and started working with a well-regarded mentor. I realised the business would only rise to my level of incompetence which meant I kind of needed to rebuild myself as I did the same with the business.”

Six years later, James has rebuilt the business and has put the past behind him.

“Today I’m proud to say we’re Australia’s most respected podiatry company, and we are also Australia’s largest podiatry company and one of the fastest growing SMEs in Australia. We treat over 3,000 patients a week.”

James also believes he’s learnt more than one lesson along the way.

“I really believe the unique challenges we faced taught us how to attract and keep the best people. Aged care traditionally has really high staff turnover  – but we have a rare ability to find podiatrists who love aged care and stay around. We’ve become well known for that and it’s become our competitive advantage – we can really help residents in aged care feel joyous and optimistic and provide emotional comfort by building relationships over time.”

James has three tips for how small business owners can overcome a challenge:

1. Keep close to family and friends, people you can trust

2. Put a timeline on future plans – break plans into chunks so the challenge isn’t too overwhelming.

3. Try to keep a cool head, don’t make major decisions when you are angry, tired, emotional or feeling helpless.

Rhiannon Sawyerhttp://www.dynamicbusiness.com.au
[NB: Rhiannon Sawyer no longer works for Dynamic Business]. Rhiannon Sawyer is the editor for Dynamic Business online. She also looks after online content for Dynamic Export. She loves writing business profiles and is fascinated by the growing world of homegrown online businesses and how so many people can make money in their pyjamas.