Biz911

“You’re too pushy”, frowned the prospective client.  I was sitting in his office, laying out what we could do to rescue his company.  Sales had tanked.  Collectors were snapping at his heels.  And I was trying to get him to make the decision to take action.  The first task was to handle a law suit, which claimed a very substantial sum for a past-due debt.  If left unattended, it promised to sink his business.

I had been trying to overcome his inertia for weeks.  He was indecisive and couldn’t figure out what next to do.  Times were tough, for sure, but he hadn’t been adjusting to the new realities.  And his firm ended up getting well behind with its payables.

My retort was that he needed sales people who were “pushy”, and a marketing plan that effectively pushed his customers’ hot buttons.  There seemed to be no sense of urgency to his business.  Creditors were being pushy, as were collectors and collection attorneys.  So he’d better start thinking that way himself.    

Competitors will eat you alive if you don’t let your customers know how you can satisfy their needs – and then follow through with your promises.  

Business people tend not to know much about the debt settlement and turnaround profession.  This is changing fast, but a majority of small to medium sized business owners and their profesional advisors still don’t go looking for someone to preform this service.  So part of our job is to to reach out and contact them.

Clearly, nobody likes a pushy salesperson.  But every company has to be imbued with a sense of urgency and common purpose and attention to customers’ needs.   

If potential clients and customers of any good business are not made aware of the benefits on offer, they are not being well served.  And if the honest and open process of promoting urgently needed goods or services is occasionally interpreted to be ”pushy”, then it’s unfortunate, but so be it. 

This story has a happy ending.  The major law suit and urgent demands were settled to meet the cash flow limitations of our client.  Creditors received a lot more than the alternative, had the firm declared bankruptcy.  The company is alive and thriving, lessons learned, and moving ahead with a new and ”pushy” lease on life.

It happened again this week and it’s a familiar refrain.  “I want to pay everyone”, said the shaken business owner.  His import-export firm was in trouble.  He intended to catch up with delinquent payables and there was no way he was going to “stiff” anyone.

There’s nothing wrong with this admirable sentiment if dealing with reality, when acted upon early enough and if revenues really can be cranked up quickly.  But this particular business had waited too long to address its declining cash flow.  It faced a “perfect storm” of threats, accusations, law suits and default judgments.  Money had run out.  His landlord and banker were after him and he was trapped with nowhere to turn.

If you get into denial and wait too long, you lose control of your company.  It’s that simple.  Others get to call the shots.  They figure that it is in their best interests to do what it takes to try to get paid.  And when it happens all at once it becomes nasty and vindictive.

Our ideal clients realize early enough that:

• Wishful thinking gets you nowhere.
• You absolutely have to address declining cash flow before it’s too late.
• All costs have to be scrutinized and brought into line.
• Any unused asset must be sold to raise cash.
• You have to focus attention on effective marketing, knowing that the business cannot survive without adequate revenues.
• Creditors should not been misled or given unrealistic promises.
• You have to be prepared to communicate with creditors in order to restructure debt and to meet the vested best interests of each party.
• You need competent help to guide you through this unfamiliar minefield, so that your company gets through it, safe and sound.

If your business disappears, creditors get hurt, possibly left with nothing.  What’s the best, most honorable way to treat them?

• Stiffing them by going out of business, crying unrealistically all the way to the bankruptcy court that you want to “pay them everything that’s owed”, or by
• working productively with them before it’s too late to get revised payment terms, the intent also being to give them the long term value of your continued business relationship, once your company gets back on track.

As far as I’m concerned, it’s a no-brainer.

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.

Collectors like to talk.  It’s what they do all day.   They will threaten, cajole and do everything in the book to traumatize your receptionist and wear you down.  They pile on stress when you’re already in shock.  And it works, which is why so many of them are outrageously rude and offensive.

Business people have no Fair Debt Collection Practices Act to protect them, as do consumers.  It can feel like the Wild West.  Literally so, as a local business owner discovered, when a rogue collector showed up at his door with a gun on each hip. 

Collectors can appoint themselves with legalistic titles.  Some call themselves “officers.”  And company names can be fabricated to make them sound like law firms.  When you’ve picked up the phone to hear someone say, “This is Mr. Screw, the pre-legal officer at Cheatem and Shyster,” you’ll know what I’m talking about.   

Obviously, there is good and bad in everything and in every business and profession.  It’s characterized by the bell-shaped curve.  At the one extreme of the collection business there are really talented people.  They listen carefully to your side of the story and are adept at getting what they want by doing so. 

At the other end there are those who just seem to go through life having bad days.  It’s probably these people who give the industry a bad name.  And it’s why there are more complaints filed with state and federal agencies about the collection business than any other category.  I wonder why this is?

It’s not hard to fathom.  Just this week, the nation’s biggest collection firm had to pay $250,000 to the state of Texas.  Why?  Some of it was because collectors, amongst other things, were making “harassing and sometimes profanity-laden calls to Texans.”  Refusing to verify debts, when challenged, was also part of the story.

How do you deal with these people?  First thing first.  Don’t mention it, but collectors have no power.  Pull back the curtain and you’ll find the Wizard of Oz.  It’s all smoke and mirrors.  Collection firms typically get paid up to fifty percent of what they squeeze out of your company, depending on the age of the account.  And they are assigned these accounts for a set period, after which they typically lose them if they are unable to collect.  If the account is then forwarded to a law firm, the collection company receives a small percentage of anything the attorney is able to rake in.

The big threat that collectors make is, “We’ll sent it to our attorney for legal action.”  Actually, this is the last thing they want to see happen, if in fact they believe they can squeeze cash out of your starving business.  Or they may also threaten to force your firm into bankruptcy.  Excuse me?  A desk collector?  At what astronomical cost, with whose money and to what end?  

Your best weapons are knowledge and attitude.  Give collectors a good reputation to live up to.  And if you are up against a rude and obnoxious individual, let them rant. Stay cool and calm.  Don’t wrestle with a pig.  You both get dirty and the pig loves it.  

Work out a settlement deal with them.  This has to be agreed in writing and signed by both parties, before you transfer any of your precious business life blood to them.  Take your time and keep to your schedule, not theirs.  The situation is not usually as urgent as they make it out to be.  And it’s always urgent for them, especially if they’ve had a bad month and their car payment is due. 

Don’t fall into the, “We just want a good-faith payment,” trap.  If you’re cash strapped, you can’t likely afford anything, whether or not someone wants to call it “good faith.”  Never send money in the absence of a written agreement.  Oh, and never, ever pay by phone.  You could lose a lot more than expected. 

Remember, your company’s operating cash needs may require you to withhold payment to others for the time being.  Your business needs to survive to enable you to start settling past-due accounts as cash becomes available.

Tough times call for tough choices.  Your company’s survival is your first priority.  Brutal necessity determines that collectors get nothing from it until you decide to give it to them.  And this should be on your terms.  Remember, you have control over what they want, which is their commission.  When times are tough, don’t dance to their tune.