How To SAVE Your Business & Make It GROW In Tough Times

C O N T E N T S

FOREWORD .............................................................................. xi
PREFACE .................................................................................. xii
PART I SAVING YOUR BUSINESS ............................................. 1
TURNAROUND CRISIS .............................................................. 3
Cash Flow Management ............................................................ 9
Denial, Poor Financial Reporting and Bad Management .......... 18
Signs of Bad Management ........................................................ 24
Cash and Profit are Not Always the Same Thing ....................... 31
SYMPTOMS AND EARLY WARNING SIGNS OF TROUBLE ...... 39
CUSTOMER SERVICE ...............................................................57
PART II GROWING YOUR BUSINESS ....................................... 77
UNIQUE SELLING PROPOSITION (USP) .................................. 79
STREET-SMART BUSINESS PLANS ........................................ 93
BUSINESS MODELING ............................................................. 107
RISK ......................................................................................... 117
BRANDING ............................................................................... 125
PART III REAL LIFE EXAMPLES ............................................... 131
INTERVIEWS ............................................................................ 133
Bill Brewer ................................................................................ 133
Dan Gaby and Lydia Vega ....................................................... 137
Stephen Hall ............................................................................. 144
Allison Hill ................................................................................. 149
Mark Lieberman ....................................................................... 153
Tony Maniscalchi ..................................................................... 157
John Palmer ............................................................................. 162
Richard Pumilia ........................................................................ 166
Gail Schaper-Gordon, Ph.D ..................................................... 171
Bruce Taylor ............................................................................ 177
SAMPLE LETTER INFORMATION ........................................... 182
Sample Letter A ....................................................................... 183
Sample Letter B ....................................................................... 184
Sample Letter C ....................................................................... 185
Sample Letter D ....................................................................... 186
SAMPLE SCRIPT INFORMATION ............................................. 188
Sample Script A ........................................................................ 190
Sample Script B ........................................................................ 192
Sample Script C ........................................................................ 194
Sample Script D ........................................................................ 195
Sample Script E ........................................................................ 196
BONUS SECTION ..................................................................... 199
HOW TO BUY A BUSINESS ...................................................... 201
HOW TO SELL YOUR BUSINESS ............................................. 223
SACRED COWS MAKE THE BEST BURGERS ......................... 235
RESOURCE SECTION .............................................................. 243

 Experience is not what happens to you. It’s what you do with what happens to you
Aldous Huxley

I wish I could tell you plainly and graphically how awful it is to be working in a failing, sinking company. It’s like the old trite saying that unless you’ve experienced something dreadful and chaotic, just reading about or hearing about what happens isn’t close to the reality of the circumstances.

It’s a war, really…no question about it. All the contingent plans for possible disasters get blown up along with all the other casualties. It takes cool heads and leadership ability to side-step the mine fields.

This is especially true when failing companies are hit with external cataclysmic afflictions not of their making. Such was the case in 2008:

• Lehman Brothers failing.
• Merrill Lynch being taken over by Bank of America.
• Countrywide also upside down-gobbled up by Bank of America.
• Wall Street imploding costing trillions of dollars of investor losses.
• A poorly functioning and know-nothing Congress, jammed packed with Representatives and Senators who forget they work for us-not themselves.
• Dozens of banks closing, followed by credit windows closing to worthy borrowers.
• GM, and Chrysler on the edge of bankruptcy with tin cups reaching out to Washington D.C for billions of dollars of prop-up-support and getting billions of dollars from the White House.
• Millions of Americans are in foreclosure, and have lost jobs.

 

 

Fight or Flight         

The disorder of upside-down companies is like a battlefield. Bombs, grenades, small arms fire, mortar and artillery shells (incoming) are exploding every moment and in the midst of all of this is confusion, known sometimes as “the fog of war”. And further, to make matters even worse, is the fear and uncertainty that saps courage and clear thinking from the lowest-ranked commander up through the chain of command.

So goes the turmoil in companies that are messed up and are on the brink of disaster---perhaps leading to bankruptcy.

 

Start Sorting Things Out

Turnaround self-management demands extreme focus on virtually insurmountable problems that have taken months and years to show up. But action needs to be taken in hours and days in order to save companies from shutting down. Much like the overweight person who has ignored good nutrition and self-management for years, and finally decides to take immediate corrective action, but wants to lose the extra weight in days, not months, troubled business owners look for quick fixes.

To be sure there are band-aids that might save businesses. But while they offer temporary help to open wounds, they’re not permanent and not all of the quick-fix methods are applicable in the market place.

As a business manager and perhaps the owner of a severely distressed company, you have to ask yourself these questions:

• What do I do now to save the company?
• How do I do it?
• I allowed this to happen…do I trust myself to fix it?
• Do I call in an expert turnaround advisor?
• Where do I find such a person? Who do I ask?
• How much about our situation do I share with my people?
• Why didn’t my CPA tell me how bad things are? (He probably did)
• How many employees must I lay off?
• How do I make the payroll this coming Friday?
• Will we be late with the rent check again this month?
• And most important of all, what do we do to overcome the economic

     mess we’ve got in  this coming year? The government bailed out all         kinds of entities, but not my small business. Where and to whom   do I turn?

 

Great Questions, Aren’t They?  

How honest are your answers?  Now’s the time to be brutal and blunt with yourself.  Go over this list and add additional items that may apply to your specific business. Decide if your company is in a serious jam, and if you’re the CEO, you should spend time thinking about whether you need to replace yourself with someone new.

So, is it prudent to permit the existing management team to carry on-but with outside consulting advice? Or should the entire lot of “mismanagers” be sacked and a new crew brought in to rescue the company?

My answer?...it all depends. Each situation is different as are the people involved. There are other books that speak to the subject of crisis management, turnaround tactics, restructuring and even about selling businesses that can be saved by acquisition.

Most of these kinds of books are good. In fact any kind of self-help book in this genre will help. But few of the books are brutally practical. My book is that and more. If your company is in a real battle to stay viable, you don’t need any more tedious descriptions of what trouble looks like. You already are living the nightmare.

 

Help Is On the Way

I will be giving you my experience which covers lots of clients and their businesses. I will be sharing interviews with different kinds of professionals. You’ll meet attorneys, accountants, business owners, consultants and other people who have been willing to tell me about their challenges and their experiences.

You will discover information, techniques and success/failure stories not previously published. Real names will be used as much as possible unless the person being quoted has requested anonymity.

 

Best Deal of All

One more note of importance-you’re getting two books in one volume. A great two-for-one-deal if there ever was one.  The first section, Part 1, speaks to turnaround and crisis practices. The second section, Part II, deals with how to rapidly boost sales and profits in your already successful company.

This book has been written amidst all the economic problems facing the country. The timing couldn’t be better. Half the book is directed at saving companies and the other half is about taking a good business to new heights.

 

Learn the Economic Conditions

Here’s more on the timing of this book. We have a serious mortgage mess in our economy. A recession has caused the Federal Reserve Bank to reduce prime rates so the challenges facing business owners are overwhelming:  Huge banks and lenders are writing off billions of dollars of now-worthless debt obligations, and they are not making new loans to companies or each other. Many other banks failed in the summer and fall of 2008. Suddenly, liquidity became far more important than in the last 50 years.

Cash holdings became more important than ever. He who had the cash- staying power-became not only the King of the Roost, but also became the entire royal family.

Huge institutions disappeared in hours. The government allowed Lehman Brothers to fail. The financial market was in a free fall…bailing-out money was shoveled by the billions. All of which brings you to…

 

Your New Friend, Your Banker

Get close to your banker as soon as possible. Banks make money lending (really renting a commodity) just as you make money selling or renting your products or services. How long can they go on keeping their money locked in vaults? 

There are very few companies today who don’t need cash infusions from time to time. Even if your bank says no to your requests for loans or credit lines, don’t give up.  Don’t slink away, beaten and defeated.  If you have a strong business case, with a clean financial record, and a favorable history with your bank then fight hard to get them on board with you in these unusually different and difficult times.

In keeping with my counseling running all through this book, make your banker an integral member of your team. I encourage you to build a relationship with the bank person who calls on you from time to time; but more importantly, get to know on a first-name basis, all the management people up the chain.

 

Another New Best Friend

You must also get tight with your CPA. You have to master your company’s numbers like you never have before. Your inside and outside accountants/financial advisors are more critical and crucial to your current success and immediate future than ever before.

 

The World Today

So many external forces in our global economy need to be factored into decisions that we make for our companies and that impact our lives.

In many ways small businesses have been affected by government denial and mismanagement. And perhaps the gravy train was too seductive to be  ignored. Hundreds of our citizens got sucked in by greed, power and absurd notions of making money without ethics or morality… not to mention buying beyond their means.  But what goes up artificially must come crashing down, faster, harder, and with devastating effects.

Real estate companies are now struggling as is the new home construction industry. Domestic autos continue to lost market share to overseas manufacturers.  We are losing market share to China in terms of factory production.

So now you are armed with the knowledge of the challenges ahead.

This book  in addition to the risk and branding chapters has sections on business planning, business modeling, Unique Selling Propositions (USPs) and much more to help you not only survive all of your internal and external calamities, but also to financially fireproof your company from future assaults.

 

Someone Always Has It Worse

How would you like to own a limousine company in New York City that depends on steady business from customers (tourists) that need transportation to Broadway shows? For a short period of time in late 2007, Broadway show stagehands went on strike. Millions of dollars a day were lost from all the ancillary businesses that depend on the “theatre” to support their companies, big and small. If you’re one of these owners, what’s your Plan B?  Hotels, restaurants, bars, taxis, limos and retail enterprises suffered and perhaps went under because of this strike.

 

Time to Get Going

I believe this book can help ease your worries and pain and could be the famous “silver-bullet” solution. Maybe, maybe not. Your attitude and courage will determine whether you make it. It’s time for clear thinking and common-sense management decisions and action. You can make the difference if you have the passion and desire to save or improve your business.