Biz911

According to Cincinnati-based Slovin & Associates, several trends are now emerging in the collections business:

• Companies are becoming more likely to file suit against debtor firms, because they are desperate for cash and want to avoid going out of business.
• Court costs are rising, which makes lawsuits more expensive to file.
• Judges are becoming more sympathetic to defendants.

Slovin’s observations match those of our own.  From our perspective, it is often better to resolve debt issues before they get to court.  Many of us understand this, when we have been on both sides of disputes.  It is far better to understand the other party’s situation and point of view before getting into a potentially costly legal battle.

When your company is struggling and being harassed by creditors and their agents, you have to protect your assets to the extent possible in your specific circumstances.   It makes sense to politely let the other side know that you are doing everything in your power to protect your business as a first step to honoring their needs.  The inference is that they are not likely to benefit by taking your firm to court.

It hurts everyone if your firm rolls over and dies because it has not been able to address creditor demands.  You lose.  Your employees lose.  And so do your creditors.  You have to work out settlement agreements based on your capabilities.  And they have to be in your own firm’s best interests.  If not, you will be dancing to someone else’s tune.

The best collectors and collection attorneys understand – after doing their due diligence – that it is often counter-productive to shove too hard.  Use that to your advantage.  Do what it takes to settle your problem and past-due payables and stay in business.  And if you can’t do this yourself, members of our turnaround management profession can do it for you.

This past year has been unusual for many of us – to say the least.  For me, I’ve spent far too much time trying to make sense of what’s going on.  I don’t feel any better for succumbing to the on-line and cable news channel time vampires.

Like most of us, I like to be well informed.  There’s much to be alarmed about.  But a lot of what we read and see is designed to be sensational.  Some of it is as out of whack as the stuff on the front pages of the tabloids at the supermarket check out.  And I’ve begun to recognize this urgent need to keep up with the latest bad news on Wall Street and in Washington as counter-productive.  I’ve no direct control over what’s happening out there.

This is not to say that the worrisome events are not affecting my life.  Our clients are working diligently to turn their companies around, with our assistance.  They may have misjudged the market or fallen foul of some of the countless trip-wires that temporarily put paid to business owners’ plans and aspirations.  But it’s frustrating to see them struggle harder than necessary, all because of the impacts of greed, corruption and gross incompetence at the highest levels.

It’s easy to start ranting about the people responsible for these events.  I plead guilty to this tendency, but recognize it as an exercise in frustration.  I prefer to concentrate on the positive factors over which I have direct control.  And few things can be more satisfying than helping business owners to rid their companies of unmanageable debt and turn their fortunes around.

Those of us who are the proud owners of small to medium sized firms know that we create the vast majority of the new jobs and economic activity in this great nation.  It’s for us to pour every ounce of energy into fulfilling client and customer needs and, by doing so, enriching their lives.  As always, if we look after them, they’ll look after us, no matter what – and to hell with the time vampires that try to distract our attention.