These words of advice were gleaned the hard way, from seeing an enterprise fail.

In the last severe economic downturn of the mid-'80s, I was forced to close the 200-plus-year-old wood products manufacturing company that I owned.

The company was a significant employer in western Maine.

It was painful to break the news to the employees, many of whom had become friends.

I think about this period of my life as "The Great Learning." I thought I had all of the management answers but, in an economic crunch, I came up short.

Personally, what I lost financially was substantial. However, what I gained in humility was not insignificant.

I was reminded of this experience in seeing friends facing similar situations in the current economic crisis.

Now, as then, banks have been badly burned. Many are reluctant to give business owners continued financial support if they see any deterioration in the company's ability to fulfill all of its bank covenant obligations.

What to do if you are a business owner or entrepreneur and find yourself in this situation?

For what it's worth, here are some lessons I have learned:

1. Reduce costs decisively wherever possible. This is step one in dealing with any economic downturn.

Too often employers take the "water torture" approach to reducing costs – one drip at a time.

This prolongs uncertainty and is a sure way to send employees looking for other opportunities. A better approach is to involve a core group of key leaders in assessing all alternatives.

Personnel reduction will likely be needed. This is always difficult. However, it is better to act decisively to maintain the ability to survive. With my company I waited too long to make decisive cost reductions and it ended up costing all of us our jobs.

2. Be honest with bankers, suppliers, customers and employees. Here I am not talking about honesty in a legal sense – that is a given.

I mean being proactive in communicating with each of these critical constituencies.

With your bankers, this means calling them before you send along your weekly or monthly reports. Let them know how you view the situation and what actions you are taking.

With suppliers it is important to let them know just what you can afford to pay and when they will get it. Most suppliers understand that difficult times mean they will receive late and partial payment.

However, if you work with them, they will most often support you. After all, they need your business also.

Customers are, of course, a special case. Without their continued orders, you are surely finished. With them you must be both honest and reassuring.

Convey that you are dealing with adversity, of course, but that you are moving aggressively to address issues and that their orders will not be affected.

Employees are another special case. They will know that the company is in difficulty, just by being there and networking with fellow employees.

They need to be reassured that you are being straight with them. They can take bad news and most will stick with you.

3. Draw on friends and business colleagues whose business abilities you respect to get other perspectives on your situation.

When you are in the middle of a business crisis, it is hard to maintain perspective.

You and your team are working daily just to keep the company afloat.

Occasionally, it is important to step back and assess the overall situation. Friends can be very helpful.

Sometimes it is just a matter of sharing the problems with someone else. Often, such friends point out factors you may have overlooked or confirm that you are doing all that you can.

4. Come up with ways to help relieve stress. The final six months of my crisis experience were some of the most stressful of my life.

The days were whirlwinds of activity with management and employee meetings, calls with bankers, suppliers and customers, and problems that required immediate attention.

Each of us deals with this kind of stress differently, but dealing with it is a must.

For me, a regular morning or noon run was the great stress reliever.

Something about the repetitive rhythms and sustained period of physical activity was cleansing. After a good run I felt ready to take on the next challenge.

I am also fortunate to have a supportive spouse who was a sympathetic listener and a source of lots of common-sense wisdom.

In fact, it was my spouse who was most influential in helping me see, finally, that the company was not going to make it.

5. Remember, most of all, that we are all capable and resilient.

Our worth is not determined by business success or failure. Our worth is determined by our values and the way we live our lives.

If you remain true to your values, there is life after business failure.

If you don't believe this, just ask my wife.