The owner of a family-owned print and graphic communications company just came back from a meeting with his bank. It didn't go well. The bank is deeply concerned and is planning to tighten the strings on the $400,000 line of credit.
Earlier, the owner completed the layoffs of 8 of 56 employees. During the same day, vendors were calling for money, their patience stretched and vital orders for paper and outside bindery services placed on credit hold. Sales persons complained that their customers are nervous, meaning, they are nervous.
Clearly, this owner faced a critical cross-roads with his company deteriorating amidst a downward cycle of ever-increasing problems.
This scenario is playing out all over our industry these days. At NAPL, we are seeing numerous companies whose options for "fixing" the business are narrowing; the gap between "fixing it" (using Jack Welch lingo) and "selling it" or "liquidating it" getting blurry.Some owners in this exact scenario freeze exactly at the time that action is needed. In fact, that's what happened in this situation: the owner put things on hold with me, preferring to use precious financial sources to pay a few suppliers rather than engage expert help to guide a rationale plan for survival/restructuring or for successful transition from ownership.
"The guy's company is bleeding," said a colleague, "but the owner is not willing to get up off the ground and get to the doctor. He'd rather stay in the fetal position so he doesn't lose more blood on the way to the hospital."
Yes, sometimes it hurts to get up.
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