Six Steps to a Business Turn Around
Two years ago, I was recommended by a long time client and friend to a family member that owned a business. The first meeting took place in a very expensive attorney’s office in midtown. The attorney was discussing Chapter 11 and present were my prospective client, her comptroller and the business CPA, who was known as an “expert” in the industry.
The CPA presented the most current financial statements which were from March 2006. The prospective client owed big bucks to the IRS, NYS Sales Tax and the Labor Dept as well as hundreds of thousands of dollars to vendors. The attorneys and the CPA were recommending bankruptcy, even though Chapter 11 is very expensive. Two hours into the meeting the prospective client pronounced loudly, “Rob, you’ve been sitting there for two hours and you haven’t said a word, what do you think?”
I asked why we were looking at March 2006 numbers in July 2006 and trying to make a determination as to the future of the business. The CPA had a perplexing look. “Well, it takes a long time to prepare financials. We have been requesting information and not receiving it in a timely manner”. The Comptroller then stated “You have no idea what that office is like. My three assistants and I work day and night and are always behind. There are not enough hours in a day.” Clearly they were overwhelmed and not handling things very well.
They had a good core business that had been neglected and what they didn’t have was a plan of attack. So they hired us and we implemented the following action plan:
- We fired the comptroller who was a high strung individual that was there for many years
- We contacted the government agencies and negotiated payment plans
- We worked with the assistants in how to close a month quickly
- We were able to present internal financials by the end of the following month
- We set up a system whereby the company paid all of their bills COD. This allowed us to match current expenses with current revenues.
- We set up a budget with weekly cash flow projections, this included targeted dates when we would get out of the “trick bag”
And the beauty of this, we did it all remotely at an amazingly low cost to the client. Today this client has a positive cash flow today and is well on their way to being financially sound.
The moral of the story? Businesses can be turned around. It just takes the right team, the right systems, and a solid plan. Sometimes, it takes letting go of key people if they are part of the problem. Look at your staffing and see if you need to make changes.
And if you know of a business that could use our help, give me a call.
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Accounting and bookkeeping expert, Robert Rimberg, CPA and President of Robert Rimberg and Associates LLC, is known for creating simple solutions to help small to mid-sized companies achieve success. Rimberg founded Rimberg and Associates LLC, an accounting and bookkeeping firm, in 1985 to help a broad range of businesses from different industries effectively grow their businesses.
In addition to his business, Robert enjoys golf on the weekends, involvement with his synagogue, a good cigar, and time with his family.
(c) copyright 2009 Robert Rimberg. All rights reserved.
Email: Robert@Rimberg.com, Office: 914-376-1111
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Tags: improving small business financial situation, Online Bookkeeping, small business bookkeeping