Equity vs. Debt … There is a difference

 

Over the past year, Revitalization Partners has been asked by several our clients to assist them in raising additional debt for their companies.

In most of these cases they have either outgrown their current debt facilities or the company has hit a roadblock and needs funds for restructuring.

In any case, the current lender has declined to lend additional funds.

 

Borrow or Dilute Equity?
As some of these companies are owned by or have large investments from private equity funds and these funds have often added to their original investment through bridge loans or additional equity, they would like to see the company borrow the additional money needed.

In other cases, the board of directors prefers debt to equity as they do not want to see their equity positions in the company diluted.

 

A Failure To Understand …

What equity holders often fail to understand is how differently they see the company and its prospects from that of a banker.

Equity holders invested in a company to benefit from that company’s long-term growth.

They believe in the future of the company and even in the case of a downturn or hiccup, they believe that they can make the changes that will, in the end, bring a benefit that will increase the value of their investment.

 

Same Situation … Seen Differently

Lenders view a company very differently.

Their return consists of getting their money back along with the agreed upon interest payment.

Unlike investors, they only look at the historical performance of the company to determine if, based on that history, the company will be able to pay back the loan in the future.

No matter how well the company does in the future or how much the value of the equity becomes, unlike equity investors, a lender is only entitled to repayment of principal and interest.

 

When Something Goes Wrong …

In many cases, the company may have a senior secured lender already in place.

A senior secured lender has a lien on the assets of the company; in most cases it is receivables and inventory.

In some, it is equipment and real estate.

But should something go wrong and the company is unable to make the agreed-on loan payments, the senior lender can seize the collateral and sell it to recoup its loan.

 

Dependent On Cash Flow …

In other cases, the company needs funds in addition to those supported by the assets or collateral.

This is where we hear the term subordinated or mezzanine debt.

These are lenders that will loan a company money that is only secured by any assets of the company beyond those that the senior lender might have to sell to recoup its loan.

In many cases, there are not assets to cover the loan, so the lender is totally dependent on the cash flow of the company that is above its operating expenses and existing debt.

These loans are more expensive than secured debt and the due diligence of the lender is greater.

 

Upside vs. Risk …

The problem often arises when the investor believes it has dealt with the problems of the company and now needs to borrow the money to execute the company’s plan.

The company puts together a plan, the investor believes in that plan, but the execution of the plan hasn’t happened yet.

The lender looks at the performance of the company, the amount of secured debt the company has and the historical and current cash flow.

The investor sees the upside, the lender sees the risk.

The investor wants to have the lender view the future the way that it does, while the lender would like the investor to see the risk that it sees.

 

Do You Speak “Bankanese?

What is needed here is the ability to speak, as the title of a webinar we did a few months ago, “Bankanese”.

The role of the third party such as Revitalization Partners is to make sure that investors and the company are understanding the lender’s issues and that the prospective lender understands why the investor believes in the future as strongly as it does.

 

Are We A Good Match?

Matching lenders, companies and investors is also critical.

Lenders, especially Mezzanine or subordinated lenders often have industries that they understand better than others.

Some have both lower and upper limits as to the amount of a single loan.

It does no good to focus on a presentation to a lender whose interest starts at 5 million dollars, if you can only support a two-million-dollar loan.

 

Successful Relationships Matter!

The exception to the above is where the party approaching the lender has relationship with the lender and has brought them successful loans.

Like any other part of business, successful relationships count.

Whether you’re an investor looking for a loan or a lender looking at a loan, being willing to listen to and understand the other parties thinking is critical to success.

And speaking “Bankanese” doesn’t hurt.

 

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at:
http://revitalizationpartners.com/we-could-write-a-book/ or on Amazon.

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.

Hidden Danger – The Labor Market and Your Bottom Line

 

We recently have read several surveys citing increasing business optimism, particularly in the lower-middle market.

In fact, a survey published by the law firm, Dykema, in late October of this year, expressed an overall bullish viewpoint of the economy bringing a new level of optimism not seen in several years.

Nearly three-quarters of the survey participants expect business activity to rise over the next 12-18 months.

 

Unknown Challenges Ahead !

Despite this optimism, businesses face a challenge they may not be considering.  One of the recent issues is an increasing lack of qualified job seekers. 

Some businesses report they would gladly pay higher wages if they could find suitable candidates. 

On the other hand, there are many businesses that do not believe they can afford to pay higher wages as they cannot afford the impact on the bottom line.

 

They Are In A Dilemma …

In our practice, we frequently hear that businesses are losing employees to their competitors, or to other industries because they cannot match wage rates.

We also hear that they cannot find qualified skilled replacement workers at the rates they were paying the employees that left.

That is, until they find themselves in a dilemma where they must pay a higher rate, or face a decline in sales because they cannot produce their products at a rate sufficient to meet current or future customer orders.

 

Avoiding A Mass Exodus …

Case in point, take the example of a recent client company that was experiencing a high employee attrition rate.

They realized that their employees were leaving for a different job, where they were getting paid 30% higher and with better benefits.

The company needed to do something quickly, so they decided to raise wage rates by 30% to attract new employees.

Not only did they have to pay more for new hires, they had to raise everyone’s rate in the company, or face a mass exodus as a result of paying new employees more than the existing staff.

In not anticipating this issue, the company incurred significant unplanned additional wage expenses that negatively impacted their bottom line as they could not raise prices fast enough to mitigate some or all of the rapid wage adjustment.

 

Know Your Labor Market …

Employers must take the initiative to understand the labor markets they compete in and the wage rates that are required to attract qualified workers.

The key here is QUALIFIED workers.  One common way to understand what the market wage rates are, is to monitor pay rates required for open positions.

If applicants are consistently asking for wages higher than you are offering, that is a sign you may be paying your existing employees less than market rates.

Another way to monitor wage rates is to network with your peers in industries that do not directly compete with yours.

Understanding what other companies are experiencing in certain job classifications is another way to monitor wage inflation. 

Once you determine that you may have an issue in paying employees less than market rates, then you can develop a proactive plan to resolve the problem.

 

Basis For Optimism …

The key to business optimism is the desire to grow revenue and the bottom line.

Retaining your existing employees and finding qualified new staff to support growth plans is key to increasing your business!

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at:
http://revitalizationpartners.com/we-could-write-a-book/ or on Amazon.

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.

Barbarians at the Bank

 

As you know, we generally write our own blogs every two weeks.

But, in this case, we read an article that was so compelling that we wanted to share it with our readers.

The writer is Charlie Perer of Super G Capital, one of the new, creative lenders that has been formed to support the mid market following the last recession.

And here are the important thoughts from Charlie.

 

 

Just Ask Anybody …

The barbarians are standing right outside the bank waiting and biding their time.  Just ask anybody. 

Community banks, middle market banks and especially the nation’s biggest banks are taking on risk like a sinking ship taking on water.

Ask a lay man off the street as to why and you might get a vague answer about the economy or politics, but ask an industry professional off the record and you will get the truth.

We are in a low interest rate environment, record stock market and strong economy that is generating record earnings for banks – they don’t want it to stop.

According to Bloomberg News: “The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse.”

 

Private Credit Markets Are Headed …

For avoidance of doubt, the purpose of this article is to not forecast the next great recession or be a doomsayer.

The main takeaway is that the private credit markets are headed toward a bubble as the current trends are not new.

Since I started at Super G three years ago with the thesis that there exists a void in the credit market because banks have only booked more assets.

Since that time billions have been raised to gladly help banks shed assets, but the mass exodus has yet to come.

Many non-bank ABL lending professionals who have since joined or had their firms acquired by banks fondly remember the post-2008 recession time period when booking new business was as simple as picking up the phone.

 

The Dirty Truth Is …

The dirty truth is banks and the rest of us know it will happen, but the hard part is none of us know when.

Go to any lender networking function and it’s all anyone talks about, but no one has the crystal ball to pick the quarter.

Outside of exogenous geopolitical events it will not be next quarter or the one after, but it will for sure come like any market cycle.

The difference is now there are barbarians lined up at the gates waiting like never before.

Market consolidation has created a new playing field of non-bank ABLs and credit funds that have raised a war chest of capital to welcome these bank kick outs with open arms.

These folks have been planning and waiting for the next cycle at every level of the debt capital markets.

 

The Tricky Part Is …

Here are some of the new firms that have been formed or aggressively hired in the past few years to help with this next cycle: Super G Capital, StoneGate, Northmill, Riseline, LQD, Siena, Encina and CIT Northbridge.

Many of the senior professionals at these firms clearly remember the cycle of 2008 when banks could not shed assets fast enough.

The tricky part is that capital is fluid and you need to use it or lose it as is human capital to some extent.

It’s a hard act to balance raising capital and hiring people before the storm hits.

The good firms find deals and new niches in any markets.

Here at Super G, we have several divisions to counter the ebb and flow of stretch lending behind ABLs. The software lending marketing is another good example of a hot sector.

 

 

Banks Are Preparing …

It also worth noting that banks have been preparing a first line of defense for what will surely happen at some point and that has been to go out acquire ABL firms or bolster internal groups.

City National recently formed a group as did California Bank & Trust.  Others such as Texas Capital Bank poached top talent from JP Morgan.  UMB Bank acquired Marquette and the list goes on.

Some of these moves were non-market based meaning these banks wanted in the ABL business, but the complement is surely there when C&I deals have to transition either to a bank owned ABL or to a non-bank.

There should be enough to go around as many bank owned ABLs are currently busy given their competitive advantage of low cost of funds and aggressive appetite of banks in this environment.

 

 

Must Put Capital To Work …

A side-effect of this glut of non-bank capital has been that good deals have never been so hotly contested and firms have provided excess capital to marginal credits as part of feeling forced to put capital to work.

The clear result is good deals booked by non-bank credit funds are getting low pricing with no-to-minimal equity and a lot of marginal deals are getting booked.

There is an uneven balance on both ends of the credit spectrum.

The uneven balance occasionally creates pent up frustration from the side with less assets. Anyone not seeing this trend has been hiding in the woods or simply not attending any functions with other firms.

 

A Borrower’s Perspective …

From a borrowers perspective, its like going from the Ritz Carlton to jail.

One day you wake up and all you have to worry about is a quarterly review and relaxing lunch with your relationship manager and the next day you are dealing with an interest that is double or triple and weekly or monthly reporting including constant borrowing base submissions.

It’s going to the Ritz Carlton and waking up in a Motel 6.

This will happen and should happen as many of these companies have been getting the benefit of a low tide environment and relaxed regulatory enforcement.

 

Which Are You?

Are you a barbarian or a gate keeper?    Get ready for the gates to open.

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at:
http://revitalizationpartners.com/we-could-write-a-book/ or on Amazon.

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Re-engineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.

Losing Customers

 

There is a company that makes shaving cream. They use all the typical methods of marketing from television to social media, to print advertising.

They even advertise on NFL games. And, by the way, it’s actually pretty good shaving cream, having taken a different approach to their formula and the way it’s used.

It’s one of those products that you can buy almost everywhere.

 

What About The Blades?

In walking through a very large warehouse store recently, I came across a package with a razor and a number of blades that was displayed at the front of the store. 

It was made, apparently, by the shaving cream company. The blades were promoted as being titanium and made in Germany, so based on my shaving cream experience, I decided to give it a try.  And, by the way, it is a really good product.

In thinking about where I could get more blades, I looked, on the web.

Strangely enough, while I could find the package I had purchased at major facilities like Costco, Target, and Amazon, there were no replacement blades.

Not at any of the major stores, and not even on the website of the company that made the saving cream and supposedly the razor and blades.  Literally, not to be found anywhere on Google.

 

Think Of All The People …

Think of the many people who shop at these stores that sold them the product. 

And think of their feelings when they realize that they can’t continue to use a product that they like.

The Amazon listing for the razor package states that “It’s out of stock; we don’t know when or if it will be back.

The website of the company that supposedly made it doesn’t even acknowledge its existence.

Maybe some part of its customer base needs to find a new shaving cream as well.

 

One Of The Most Successful …

In looking at companies that have lost customers, we should look at a retail giant that was one of the most successful in the world, Sears.  

In fiscal 2006, a year after the merger with Kmart, Sears had revenue of $29.18 billion. 

By 2006, revenue had fallen to $14.96 billion. Operating income in 2006 was $1.32 billion and by 2015 it was a loss of $708 million.  For 2016, Sears holdings had losses of $1.6 billion.

Why did one of the most successful companies in retail history lose its way?  Because as sales declined, it began to focus on financial re-engineering instead of the market and customers. 

Jim Cramer of the CNBC show Mad Money said: “The company is being kept alive by a hedge fund manager. And that could be the core of the problem.

Other retail experts comment that management has lost the passion for products and customers. And it shows, driving away customers.

 

Losing Viewers & Revenue …

We have recently watched, played out on a national scale, where participants in one of the largest entities with a customer base may have begun to impact that base.

In this case, we are talking about the NFL.  In recent years, the NFL has been beset by a number of issues that have impacted those who support what has become America’s game.

Concussions and resulting long term brain injury, players behaving badly both on and off the field, and the rapidly rising price of tickets. 

These events have caused the NFL to lose viewers and those who attend games because they don’t want their children to get hooked on playing football. 

This not only impacts game attendance, but the sale of NFL memorabilia. The rising price of tickets limits those who can attend games.

 

A Single Player Did Not Stand …

Recently, NFL teams potentially created more damage to their future than any of the other events could have possibly done. 

In 2016, a single player elected not to stand for the National Anthem. 

While a few players joined him, it was hardly noticed by NFL fans. He indicated that he was protesting a social injustice and other than that, he had very little to say about the matter.

Certainly, the mainstream media and social media had quite a bit to say about his actions, but by and large it was a minor event.  Recently, one person made several comments regarding this protest on Twitter.

And as a result, the NFL players, coaches and owners felt the need to take sides.  And take sides they did. 

Some protesting, some not, others avoiding the situation all together by staying off the field during the anthem, and almost all of them taking Twitter positions.

 

Reactions Were Fast & Emotional …

And the fan’s, those NFL customers, erupted with either support or displeasure. 

Some felt that it was a matter of free speech, others, especially veterans, felt it was seriously disrespecting something that they had fought and died for.

Even these phenomenally brave fans couldn’t agree, some believing that they had fought to protect free speech, others believing that a disrespect of the anthem disrespected them. 

In any event many of these “customers” were violently angry at everyone connected with the sport and began a discussion of a boycott of the game.

 

The Original Protest Got Lost …

As the issue grew, a new Yahoo Finance poll found 62% of Americans plan on watching fewer NFL games following these anthem protests. 

And 32% say they will not attend a game they were planning on attending!

In the process, the original protest got lost.

Yes, those who participated tried to explain why they were taking the action they were, but once you have to explain your protest, something has gotten lost.

 

One Person With A Twitter Account …

All of this was generated by one person with an active Twitter account. 

And the possible economic cost of not simply ignoring that initial tweet, may be in the millions.

Every day, there are things that companies do to lose customers. 

It’s no accident that banks, airlines and cable providers lead the list of America’s worst companies, hated by their customers.

Oh yes, another company on that list is Facebook.  

Why?   Because, even though it’s free, customers hate being lied to with “fake news”.  

And, thanks to one man with a Twitter account and the fact that members of the NFL and fans felt that they had to weigh in, the NFL may be joining the list one day.

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at:
http://revitalizationpartners.com/we-could-write-a-book/ or on Amazon.

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.

Culture of Accountability

 

A number of years ago, in a valley called Silicon, a bright aggressive sales manager was recruited by a venture capital firm to be Vice President of Sales for a “hot” startup.

The initial funding was reasonable, even if the VC’s paid a bit too much. But the company was off to a good start.

Then came time for the next round of funding.

And, of course, the current venture group wanted to make sure they got a step up in valuation. The CEO and the VP of Sales sat down to formulate a revenue plan that would insure that the round was funded at the desired valuation.

 

Uh, That’s Not Possible …

As it turned out, when the Sales VP calculated what had to be sold over what time frame, he pointed out to his CEO that it simply couldn’t happen.

The sales cycle was too long, the company needed more sales people with the right experience and it was just not going to be possible to make the numbers.

The CEO knew what his board expected to meet the valuation for the next round. And so, he told his Sales VP that he had to commit to the numbers for the prospective investors.

The Sales VP being inexperienced in the ways of VC funding agreed to do so. The company was funded and at the first board meeting following the investment, having fallen badly short of his commitment, the Sales VP was fired. A few board meetings following that event, the CEO was fired as well.

 

Making Unreasonable Commitments …

Since then, we have seen and worked with companies where management makes commitments based on being driven by outside events, regardless of the reality of events.

We have seen CEO’s and company owners make unreasonable commitments to banks and investors regarding future projections.   On the investment side, we have seen projections created to meet the goals of the investment, regardless of the probability of success.  And when things don’t go as planned, it’s not management’s fault, but the fault of the market, an outside vendor or even the economy.

Obviously, in companies that operate like this, everyone from the CEO to the lowest production worker is focused on avoiding accountability.   And events within the company reflect that. So, what does it take to create a culture of accountability?

 

In Its Simplest Form …

In its simplest form, accountability means taking ownership.  

As a company leader, you take ownership and responsibility for growing your company, create opportunities for others, and insure the fiscal health of the enterprise.

You take ownership for the behavior of people in the company and their performance. You take ownership for negative outcomes, even when you were not directly involved.  Accountability means getting the right stuff done when it needs to be done. No blame and no excuses!

 

What Would It Look Like?

Imagine what your company would look like if it was built on a culture of accountability. Think about what productivity would look like.

And profitability. How would management and staff behave? And would that behavior generate customer loyalty?

Company management, while paying lip service to accountability, often fall short of the commitment and execution necessary to create a culture of ownership in their companies. As a result, creating the difference between the status quo and extraordinary performance is often painfully slow or nonexistent.

 

Six Simple Steps …

Here are six steps that will help you bridge the gap:

1. Know what you are getting into: If you truly want a culture of accountability, you must be willing to be under the microscope, not just your employees.  If you are one of those leaders that love to launch “This will fix my employees” initiatives, you’ve already failed.  Accountability begins with the leader and if your pattern is to shift in and out of accountable behavior, your employees know that.

2. Let go of the anchors: You can’t shift the company in a new direction if you’re dragging a lot of frustrations and toxic waste. The only way to deal with them is to drag them into the open and address them. Dealing with them creates trust and no one will want to be accountable without trust.

3. Show and tell: Accountability means different things to different people. A culture of accountability is built on a clear foundation of clear expectations. Clear expectations define the processes to achieved the desired outcomes. People need to understand the game and know what winning looks like. If not, don’t be surprised if your company starts taking on water because some people are drilling below the waterline.

4. Get rid of the elephants first: Every company has elephants lurking around.  Double standards, attitude problems, indifference, entitlement thinking and other bad behaviors need to go.  

If your company has been tolerating these behaviors, the elephants need to be shown the door.

 

5. Create what you want: Creating a culture of accountability doesn’t mean turning your company into something you don’t want. It’s about taking ownership and creating the right outcomes in an efficient and productive manner. At all levels of the company.

6. Don’t be afraid: Years later, that Sales VP in the beginning of our story said that he wished that he had stuck to the commitments that he knew he could achieve.

While he didn’t understand that he would get terminated for missing the numbers, he did understand that once he allowed them to go forward, they were his numbers and he was responsible for them.

If you fear the repercussions from being accountable for your commitments, then you’re a follower, not a leader.

 

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at: 

http://revitalizationpartners.com/we-could-write-a-book/  or on Amazon. 

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Re-engineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.

Plan B Better Be Good

 

As we took some time off from our blog, I ended up on a boat trip wearing a tee shirt that had the title of this blog on the back.

And the number of comments that I got was truly amazing.  From “What is Plan B?” to “Do you really have a Plan B”?   And, of course, “What does your wife think of Plan B”?

One of those politically charged, but historically documented terms, the concept of having a “Plan B” is often viewed as being prepared for the worst-case scenario. 

 

In The World Of Business …

But in the world of business, where both startup and established companies deal with daily struggles and sometimes risk everything to succeed, having a Plan B may also be considered a weakness or seen as a lack of commitment to the current plan.

Having a contingency plan is nothing new, especially to those organizations and individuals willing to take great risks for a chance at even greater gains. Dating back to the Civil War, the art of drafting a Plan B required developing a contingency plan in case the ideal plan of attack did not work out.

 

General Eisenhower Had One …

In fact, in planning for one of the greatest military actions in history, General Eisenhower  also developed a Plan B for withdrawing the troops and even wrote a letter accepting the responsibility for the failure of Plan A.

Like the military going to war, business managers have the opportunity to plan in advance, taking into account alternative business models and routes to success by embracing the sometimes-uncontrollable measures standing in the way of their initial plans.

The first and arguably the most important aspect of creating a Plan B, especially for a business is that a back-up plan should be just as well thought out and as good as your Plan A.

 

Not An Afterthought …

Even though you hope that you will never have to resort to your back-up plan, this does not change its importance since you might have to rely on it in the future. The process of putting together your contingency plan will often cause you to rethink your primary plan and be in a position to improve it.

Intentionality is what makes any contingency plan effective. Executives are often risking it all to survive in the business world, regardless of sector or industry, should view their back-up plan as a strategy, not an afterthought.

It’s important to think about how a Plan B can help you to make better business decisions. Creating an intentional Plan B requires you to take a personal inventory of what is important to you and other way than Plan A that you might achieve your goals.

 

Easier To Take Risks …

Strategy is everything here; a Plan B must be applicable, personal and meaningful in order to have real effect.   Plan B’s are often influenced by social, financial and even emotional stresses.  

The reason your Plan B must be intentional is so that you can proceed with achieving your Plan A with confidence.   If you know that you have a strong, viable back-up plan, it will be easier to take risks and make decisions.

And then, of course, there is the unexpected.  As hurricane Harvey hit the Houston area, we had a house-guest from Houston.  She works for a company that provides management for corporate and private jets around the world. 

 

Did Not Miss A Beat …

Because they have the experience of being between Galveston and Houston, they have experience with dealing with impactful weather and with people being unable to get to work to support their customers.

Having this experience, they have a Plan B and a Plan C with multiple fully operational support sites outside the area that have assigned crews for staffing.  Despite the 1000-year storm, this company, through thoughtful planning, did not miss a beat.

While most of our businesses are not subject to hurricanes, those of us in the Northwest are subject to earthquakes, flooding and even potential volcanos.

 

New Banking Relationships …

Outside of court appointed receiverships, much of the work of Revitalization Partners centers around corporate restructuring and helping companies find new banking relationships.

In all our restructuring planning, we focus of what happens if Plan A is not executed as projected. When restructuring a company, we must consider the impact on current staff and their ability to execute.

Is the financing in place to support the restructuring plans? If key management is lost, are their backups in place?  And, most importantly, how will vendors and customers react to the changes?

 

Not A Weakness …

In banking relationships, we often find that a bank and its client find themselves on opposite side of a difference of opinion. The bank just wants its loan paid off and the company believes that it will be easy to find another bank.  What happens if the latter is not the case? When multiple banks say “no”, it is important to have a Plan B for the company.

Just as Plan B’s can become a reality for many businesses, it is always necessary to have more than one idea and plan to fall back on.   At a given moment, you should be able to list your Plan B, C or even Z as easily as you recite your business values and revenue stream.

Having contingency plans is not a weakness, it demonstrates your ability to critically think about he future and envision ways that you will succeed within it. It demonstrates to business partners and potential investors as being versatile and taking initiative.

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients. And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at: 

http://revitalizationpartners.com/we-could-write-a-book/  or on Amazon. 

We specialize in improving the operational and financial results of companies and providing hands-on expertise in virtually every circumstance, with a focus on small and mid-market organizations.

Whether your requirement is Interim Management, a Business Assessment, Revitalization and Reengineering or Receivership/Bankruptcy Support, we focus on giving you the best resolution in the fastest time with the highest possible return.