Challenges, problems, and triumphs
-- from a manufacturer's perspective.
Is Your Company on the Verge of Bankruptcy? 5 Survival
Time for a reality check.
by Susan Tose Spencer (June 20, 2011)
If you are a small business owner that is still
in business after the most recent economic downturn -- that doesn't
mean you are out of the woods. There are many telltale signs that
you need to consider, face the facts about the health of your
business, and then come up with a strategy.
I owned a company that inevitably failed and I
remember the financial toll and the emotional beating that goes
along with trying to save a company on its last legs. But here are
the five strategic moves I made which worked for me and I know can
work for you. Here's how to make the best out of a negative
Tip 1: Face the Truth
Is your company running a negative cash flow on
a regular basis? If the answer is yes, it's time to consider your
options. Are you prepared to put more personal money into your
business? If the answer is no, you probably will not be able to
arrange a loan from any conventional sources, and unless you can
quickly turn around your cash flow, you might run out of gas.
Tip 2: Maximize your Cash Management
Can you stretch your payables further by
negotiating longer payment terms? Can you speed up collection of
your receivables? Can you reduce your operating expenses and
furlough or convert employees to part-time workers?
Tip 3: Look Objectively at Hard and Soft
Assets, and Customer Lists
If you have been in business a few years, it is
likely you have transferable assets with real value (actual and
intangible) to a competitor. Examine your unique systems, formulas,
and operating procedures that can add value to another company. Take
a thorough inventory of everything the company possesses.
Examine your customer list one customer at a
time and consider how each customer would fit in with another
similar company and whether you could convince them to make that
Tip 4: Identify Competitors That Might Be
Interested in Your Company
The most positive solution to closing a
business is to find another company that will benefit from what you
have and will pay money (or assume debt) for it
Select no more than two potential targets (your
best picks) because if the word gets out that you are selling your
company, you might lose customers and employees before you can work
out a suitable transfer.
Remember this is a "beauty contest," so plan
every detail before you approach a competitor and keep it 100%
Before you "pitch" a competitor know what you
want out of the deal.
Keep your activities under the radar screen for
Tip 5: Know What You Are Selling and Have
Facts and Figures Ready
Make sure you exchange confidentiality
agreements before you start.
Give your best sales pitch on how your
competitor will benefit by adding your company and its customers.
If there is real interest, walk away with an
agreed upon outline.
Follow-up quickly and try to wrap up the
transfer in 30 days max.
Make the deal and take a long, hard, sigh of
relief, as I did, that you can walk away with something to show for
all your effort and then move on!
(Note: Susan Spencer is an entrepreneur,
award-winning author of Briefcase Essentials, lawyer, and former
minority owner, GM, and VP of the Philadelphia Eagles football
team. Spencer attended Boston University where she earned a BA. She
later received her MA in Education/Economics from Hofstra University
and received her law degree from Villanova University.)