Turning Around a Company
How to turn around a company?
I'm currently in the South-East helping a company that has revenues of $1M and debt of $3M.
Sadly, and I hate to say it, they, like many other business owners, were entrepreneurs and not businessmen. They always relied on outside help (from other investors) to get their business growing - and sadly, not only did they trade away all their equity with loans and notes, but, they also were taken advantage of by those same investors.
And again, entrepreneurs do not want to give up their "baby". How many books and articles are written about that?
So, there are a couple of issues with this company; here are the two biggest:
1) They have a lawsuit against them for $1.1M;
2) They have a contract with a company (that is now under federal investigation) for $1.05M in credit and that the founders signed personal notes saying that they would repay it if their company couldn't.
It is very complicated, but, my priority is to a) get them out of the personal note guarantee so they can sleep at night, b) settle with the credit company for a smaller percentage, and c) hire a lawyer and fight the lawsuit (the previous CEO's of the company just kept delaying on everyting - which is good to not have to pay money, but, it delays the inevitable, and that is the government getting involved to settle the lawsuit.
We have hired a lawyer to fight the lawsuit and are currently having lawyers work on the contracts and personal notes from the creditor.
I guess my point is this: as an entrepreneur, let your baby go, if dead, bury it, and if alive, bring in a competent professional to run the company.
I have no doubt that the company can be turned around, if the entrepreneurs let me do my job and everyone face the ugliness that is out there and work out settlement terms. It will allow the company to continue to operate and, most importanly, be sold. Of course there is always the option of bankruptcy, but, what entrepreneur wants to admit failure.