Effective Networking: Do’s & Don’ts

By Mike Semanco, President, Hennessey Capital

The key is just showing up.  This rings true in daily life events as well as networking.  Networking can be stressful to some and to others it is like riding a bike.  The problem is if you do not show up, you may miss meeting a great new contact, developing a new relationship or having a chance at a new opportunity at some point in the future.  There have been numerous times where it would have been easy to skip a scheduled event.  But once you are there and strike up a conversation with people in the room, the reason for attending becomes very clear.

The attitude and strategy I bring to a networking event is to figure out how I can help others succeed.  If you have the mindset of helping others, you take a genuine interest in listening to the conversation and it takes you out of “sales mode”.  Making a sale during a networking event should be the last thing on your mind. Creating relationships with like-minded people and those you enjoy speaking with is first and foremost.  People do business with people they like and trust.  Building a relationship is the first step to developing trust with someone. 

So once you convinced yourself to attend an event, use the following do’s and don’ts to make it time well spent.

Do’s

• Show up- you never know who you will meet.
• Have a goal on how many new people you want to meet.   
• Smile at everyone, make contact and say hello- remember first impression.
• Listen with genuine interest and offer to help.
• Address the person by name- helps you remember their name in the future.
• Ask for a business card and ask if the person would like yours.
• Develop a concise message if you are asked to explain your business.
• Follow up after the event to say thanks or schedule a follow up meeting to continue the discussion and build the relationship.

Don’ts

• Don’t attend with the expectation of landing a new opportunity.
• Use it as bar night.  Manage alcohol consumption or do not drink at all.
• Don’t be afraid to start a conversation and try not to start with “So what do you do”?
• Focus on quantity of contacts, focus on quality.
• Don’t dominate the conversation. Remember to ask questions.

Payroll Funding: Avoiding the Cash Crunch

By Joe Romeo, Senior Business Development Representative, Hennessey Capital

Are you pulling your hair out each time Payroll Check Date approaches?   Maybe a review of your working capital resources is in order.

Many companies face a recurring cash crunch when it’s time to pay their most valuable assets, their employees. Next to the fixed costs associated with buying inventory, building products or creating deliverable services, making payroll is often one of the biggest consumers of cash.

 

Typical scenario:  Your business is going pretty well resulting in a good amount of A/R, but your customers continue to defer payment to or beyond terms.   These are some of your best customers so you are caught in the delicate trap of “collections versus managing the customer relationship.”

 

There is a sound and simple solution for this scenario – working capital financing.   Services like factoring can give you access to immediate cash to provide gap financing and reducing the stress around meeting payroll.

 

Factoring advances of up to 85% of your A/R immediately, when you invoice your customers giving you the working capital you need to run your business and make payroll.  As a bonus, factoring is completely discretionary - you utilize it when you need it.

 

While we are on the subject of payroll, there are some other things you should consider.

 

Paying your employees and satisfying your payroll tax requirements are an essential part of running a successful business.  Many organizations outsource this service.  Outsourcing will save time and expense by not having to perform this work in-house, allowing the business owner to focus on running the business and managing the bottom line. 

 

You can also combine a factoring facility with Hennessey Capital Payroll Solutions – a single point to handle all your human capital management needs.

 

Steering clear of the many pitfalls associated with the regulations involved with payroll is often difficult.  Outsourcing this function to a third party can be an effective remedy. Solutions can include general payroll administration as well as reporting and depositing your taxes with the proper State/Federal authorities. 

 

This involves:

• Accurately calculating and submitting payroll taxes to the state and federal agencies.
• Selecting the proper options available to pay employees and submit payroll.
• Making sure data that is stored or transmitted electronically is secure.
• Ensuring your data is protected from unexpected circumstance such as a fire, hurricane, snow storm, flood or power outage, etc. Optimal disaster recovery plans continuously back up all client data in different locations, so that even in the event of an unforeseen circumstance (weather-related delays, power outages, etc.) all clients’, employees’ and any corporate sensitive information is protected and secure.

As your business grows, you will likely need to hire more employees and add staff to manage those employees. As a company’s employee size increases, more attention needs to be given to Human Capital Management issues. 

Utilizing an Advisory Board to Guide Your Business

By Mike Semanco, President, Hennessey Capital

The importance of an advisory board to an entrepreneur and business owner is invaluable.  Entrepreneurs thrive on developing ideas, products and strategies on their own terms and at their own pace.  The “charge ahead”, “get it done” mentality is second nature to this group of individuals.  Entrepreneurs come in many shapes and sizes- sole practitioner, division managers or even CEO.   Whatever the title or responsibility, surrounding yourself with a group of professionals you can rely on for sound advice and direction will only improve your chances of success and keep you sane.

An advisory board is different than a board of directors or managers, who hold fiduciary responsibilities of the business.  Advisory boards can take many forms ranging from formal CEO roundtables and annual retreats to informal gatherings over coffee, lunch, or golf.  Having a sounding board to share ideas and challenges help entrepreneurs feel they are not tackling the world alone.  You can have a great internal management team or partner but there are times when outside influence is needed.  A different perspective from a trusted advisor who has encountered the same issue helps you see the challenge or opportunity in a new light.

Advisory board members can consist of professional advisors (your CPA, attorney, banker or consultant), friends or associates who may or may not own their own business, or even a current staff member.  The key is to surround yourself with people who have diverse backgrounds, are willing to challenge the status quo and who you like to be around. Start by selecting two or three contacts you feel could be strategic to your business and can fill the gaps you determine are needed.  Meet with them and discuss your plans and ask them of their interest to meet on a regular basis.  This could be once a month, quarterly or as needed depending on how critical your needs. 

Daily business decisions are not easy so having a group you can turn to for renewed perspectives and friendly banter is refreshing.

Reprioritize Your Continuous Improvement Efforts to Maximize Profitability

By Mike Pircer, President, MAP Business Solutions

As companies constantly reduce resources in this tough economic environment, continuous improvement initiatives are being thrown by the wayside. Many businesses are still doing the same things with fewer employees but then find themselves coping with poor morale, disconnected processes, shrinking margins, and dissatisfied customers. Continuous improvement initiatives are either not being implemented or being executed poorly in which there are no improvements at all. Those that are being worked on have a tendency to be knee‐jerk reactions that are not well‐planned, do not involve all the key stakeholders and do not connect to the organization’s overall strategy.
Companies need to recognize business processes as value streams. These streams represent all value‐adding and non‐value‐adding activities that are required to deliver a product (good or service) from request to delivery (and ultimately, to receipt of payment from the customer). Knowing what the customer values and is willing to pay for helps differentiate which activities are truly required.
In order to put continuous improvement back in play, these are the priorities in which an organization must focus on:

 
Priority #1: Eliminate unnecessary non‐value adding activities. An organization can uncover the unnecessary non‐value‐adding activities through a myriad of tools such as:

• Value Stream Mapping
• Customer Surveys/Interviews
• Warranty Claims
• Customer Complaints

Once an organization identifies the unnecessary non‐value‐adding activities, then the required resources can focus on the elimination of these activities. These are usually “low‐hanging fruit” and can be done quickly and cheaply.

 
Priority #2: Reduce necessary non‐value‐adding activities. Necessary non‐value adding activities are recognized as processes that the customer doesn’t care about, but they are necessary to keep the operation going. These types of activities could include:

• Invoicing the customer
• Sales calls
• Material handling

For example, a salesperson for a computer repair company may be out in the field making face to face calls on prospects and clients. While the client doesn’t value (or pay for) this activity, it is necessary in order to generate more business for the organization. An improvement initiative may be to reduce the amount of travel time for the face to face meetings and incorporate more internet marketing processes. In these areas, the goal becomes to reduce the effort required to assure compliance and proper operation of the business.

 
Priority #3: Optimize value‐adding activities. These are considered the organization’s “bread and butter” processes. Improvement activities could include projects that focus on reduction of cycle time, reduction of defects, and/or reduction of downtime. Improvements in this area are generally more time and resource consuming and could be more costly.
While optimizing value‐adding activities is important, lean thinking shows that faster and more dramatic results occur by first eliminating NVA activities. The outcomes from eliminating NVA are measurable and wide ranging, including faster delivery, improved quality, freed capacity, and reduced inventory – all of which lead to greater customer loyalty, market share and reduced expenses. Collateral benefits that result from eliminating non‐value‐adding work include improved interdepartmental and interpersonal relationships, safer working conditions, and reduced workforce frustration – all of which create a work environment that attracts and retains a talented workforce, which, in turn, leads to further business growth.1
1 Value Stream Management for the Lean Office, Don Tapping and Tom Shuker

Creating Strategic Partnerships to Build Your Business

By Joe Romeo, Senior Business Development Rep., Hennessey Capital

 

Creating partnerships can help build your business and connect you to new people and markets. The right strategic alliances can strengthen the breadth of your company through association with other related industry specialists.

 

This brands your company as more well-rounded to your client base and builds deeper bonds and support from your business partners while growing stronger inter-relationships.  These bonds can last for years, paying dividends along the way.

 

Often these partnerships become valuable referral connections for your existing clients and result in the most valuable return you can get from any client as you help them in “other areas” outside the scope of your expertise. Customers recognize and appreciate your assistance has no direct self-serving interest.

 

To get started, it’s important to find partner companies that operate in your prospects’ circle.  There are two essential components for your best alliance partnerships:  the actual companies and the individuals representing those companies.

 

The right company is any non-competing company that is well respected and interacts with key decision-makers, influencers, and your prospect customers.   It is particularly beneficial to reach out to  trusted advisors, including bankers, CPAs, lawyers and business consultants whom your prospects look to for guidance.

 

Other good candidates might be third party connections like state, local and federal agencies or associations who help businesses find the resources they need.

 

The best fit for any business will be a partner with similar values and like cultures.  The business can be at the opposite end of the product or service spectrum, but should operate with the same primary principles to yield the quickest results and easiest collaborations.

 

Equally important is the right ambassador, who should be a “rain-maker,” not a resource waster.  The individual should be an effective executive who works on the right things, is efficient, capable and “connected.” 

 

Approach:  Work to develop relationships in a complementary, collaborative manner.  This requires that you put the partner’s interests ahead of your own.  A valuable adage is “you can best get what you need by giving others what they want.”

 

In this stage, seek to understand the partner’s business and learn where they fit in/complement to your company. It is also critical to be cognizant of their key objectives. This will add value to your relationship and lead to a mutually beneficial partnership.

 

Keep in mind that everyone’s favorite station is WII-FM (What’s In It For Me) and build your approach accordingly. 

 

Team with partners in joint presentations, white papers, event exhibits or other such marketing channels to maximize your exposure and partnership opportunities. Your affiliation with key companies will increase your own company’s visibility and help you gain traction and the benefits of associating with recognized, expert partners.  This will lead to great network connections and the ROI will be measurable.  

 

BENEFIT:

Some of your partners will turn into future clients or you may need their services some day and enjoy the preferred customer treatment.

 

More traditional returns include the warm introductions you will get as your alliance partners act as trusted advisors for their clients and you are favored with the pole position as the result.

 

The ability to share ideas and get a diverse viewpoint or opinion can be an extremely valuable benefit from your strategic partners.  If you look at CEO business coaching you will see that they purposely intermix CEOs from different businesses for this very benefit.  Often a creative perspective or the view from some distant, unrelated business field will lead to a different outcome. 

 

Invest loyally with partners  before you look to make any withdrawals. This is an ongoing process, not a one-time commitment. Maintain your investment and stay on your partner’s radar. 

 

A useful resource is www.networlding.com and Melissa Giovagnoli

 

Branding/Rebranding Your Business

By Mark S. Lee, President. Lee Group, MI LLC

What will it cost you and your company if you don’t consistently communicate your value and brand?

The concept of branding has been trendy for a long time. With all the buzz, it’s important to understand exactly what this means to you, your company and everybody your company “touches.” Many people associate a brand with a logo, tagline, colors, and web design. While that’s part of your brand image, it’s clearly not the whole story. A brand represents the impression that you leave with customers, prospects and business partners. It infiltrates every contact point and requires every employee who influences stakeholders’ perceptions to be fully engaged and committed to delivering on your brand promise.

Are you confident that you’re communicating your value and therefore, your brand, effectively to your customers and prospects? Much of business failure can be traced to the way companies communicate - or fail to communicate – effectively with their stakeholders, including customers, prospects, partners, employees and anybody else who has an interest in your business. Whether you’re planning a new business, have just launched it, or have been running it for a while, it’s critical to avoid the most common pitfalls companies make communicating their value, brand and solution. In this article, we discuss branding as a tool and provide tips for you to brand your company as well as why you should consider branding yourself.

Consistently Communicate Your Brand.

Every company and individual has a brand (this isn’t just for the 100 pound gorillas of the business world). Do you know your company’s brand? This is the message that you are communicating on a regular basis to customers and prospects…it’s the impression you leave with every customer and potential customer…..even if it’s not the statement that you want to make. Your brand is communicated through every customer touchpoint - from phone to the internet and via email, direct mail, advertising and every other opportunity you have to reach out to your target market(s). Your brand is communicated by every employee in your firm from the CEO and sales team right down to your department directors and shop floor managers. Your brand is what sets you apart from others in your industry and makes you unique.

A brand can only succeed and achieve its goal of supporting growth if it satisfies three key criteria. If any of these factors fail, you risk major malfunctions to your business and bottom line:

1. Leaves a positive impression
2. Is aligned with your customers‟ needs and
3. Is delivered consistently, as promised.

Why Do People Buy A ‘Brand’ Any Way?

There are many reasons for buying a brand including the fact that the brand identity:

• Fulfills a short or long term need
• Has an emotional connection
• Has a perceived Price/Quality relationship
• Is “hot”—meaning the brand is en vogue
• Represents who you are or want to be aligned with

Let’s look at an example of how a brand has succeeded in achieving these goals. FedEx is a world leader in package delivery. Their brand and philosophy are simple—when it absolutely has to there overnight, FedEx will do it. Every employee knows and understands this. But beyond understanding this, they believe in the brand mission and understand their role in making this happen. Every employee, regardless of their position, knows the brand‟s philosophy and works to deliver on its promise. This is the only way a company can live its brand.

There are several questions you need to ask yourself to ensure you’re delivering a brand value that will generate profit, including:

1. Is the message you are conveying consistent?
2. Is this the message you want to be heard and experienced?
3. Do your customers understand how you differentiate yourself from like organizations?
4. Do they experience your brand in the manner that you want them to?
5.  Does reality align with your promise?
6. Finally, is your brand what your customers seek and truly value the most?

Components of a Successful Brand

In the past, companies would develop a product and then promote it. As a global economy, businesses continue to evolve and become more dynamic and competitive. Organizations must redefine their value and sometimes their business model in order to succeed. This redefining leads to the creation or reinvention of their brand

How do you create a unique brand? This must begin with the development of a baseline to understand your strengths/weaknesses as well as opportunities/challenges in the market place. It requires an open mindset if you‟re branding your company.  Ask the following questions:

• What is the unique valuemy company offers?
• How do others perceive this, now?
• Does this perception need to change?
• Why would I purchase my company‟s brand?

Next, you must evaluate your company‟s brand to ensure the following components exist:

• Vision: Where do I see my company going? What is my ultimate direction?
• Positioning statement: How will it be positioned in the marketplace?
• Value Proposition: What makes my company unique? What service or need does my company fulfill?
• Competitive Advantage: What makes it unique from the competition? Are I just- as-good or better than the competition?
• Leveraged Strengths: Based on an internal assessment, do we really understand our strengths and weaknesses? If so, how can I leverage these strengths?
• Communication Plan: What and how do I communicate our plan to others? What is my communication strategy?

We finish by sharing key strategies that will help you create and reinforce your company brand:

1. Focus on the Needs of Your Target Market: Understanding your target market will allow you to develop a brand position. As a business owner, how confident are you that you truly know what your customers need, want or expect from your company? Many business decisions are based on a gut instinct of what you believe customers want and not necessarily because you asked them directly. You must ask existing customers as well as former and potential customers to ensure their concerns and expectations align with the value you provide. This will translate into your brand position.
2. Recognize And Act When Outside Factors Impact Your Brand Perception. Customers do not reside in an isolated world. Recognize how external factors (i.e., recession or
   Business Owner‟s Guide to Rebranding Page 4 of 5
   varying industry regulations) might impact their decisions and their ability and interest in conducting business with you. If you recognize these and address them this will strengthen customer loyalty. Many businesses in the recession have lowered their prices to address customer challenges. As long as they did not forgo their customer value, this makes a solid impression upon customers who will stick around long after the recession has passed.
3. Carefully Review All Communication. Is your message consistent in all of your communication? This includes everything from written documents, presentations, advertising, your website, brochures and direct mail to email, sales presentations, phone calls, etc… Every employee must communicate the same brand value at every level of the organization. One employee who isn‟t consistent with delivering your value can truly cause harm to your image and your bottom line.
4. Develop a Solid Elevator Pitch: Given that an adult’s attention span is 15-30 seconds, do you have a pitch that highlights your brand in that short window? What are the key points you need to convey about the VALUE you provide (not necessarily the products and services)? It’s critical that your pitch is concise, AND compelling. The pitch objective is simple–to develop a message that ensures the other person wants to continue the dialogue.
5. Present your Company Passionately. This is your business-your baby, in many ways. Therefore, it‟s personal but you must be able to step outside of the company and honestly ask yourself, “Why would I do business with me?” It‟s a simple question, but the answer may not be so easy to address. Once you‟ve identified the answer, make sure you convey this in words as well as in your body language. A sincere passion for the value you provide will go a long way in business.
6. Take Risks to Meet Customer Needs. In this dynamic, ever-changing market, you need to evolve with the times. Have you or your company remained stagnant? What worked in the past may not be as effective today. Reviewing and tweaking your business model as well as your personal skill set will be paramount to future success. It‟s dangerous to simply stand still and not make changes nor address changes in the market. We know that risk-taking is a scary proposition but it is the key to growth and to maximize your brand value.

Branding is essential and doing this right will make the difference between success and failure for your organization.

Creating a Credit Policy that Helps You Get Paid

By Candace Pavliscak, Chief Credit Officer & Senior Vice President, Hennessey Capital

Everyone thinks of the banking/finance industry when they hear the term “credit policy” particularly with the prevalent coverage in the media as of late. I have even seen “lending policy” and “credit policy’ used synonymously in some articles but I believe what they each represent is very different. While it is true that all financial institutions have a credit policy that drives their lending practices (some better than others as we have seen), every business should have some form of credit policy.

Why should your company have a credit policy? Think about it, as a goods or service provider you are extending credit to every customer that doesn’t pay you cash on the spot for your work. You should have some idea of how much credit you are willing to extend and to whom. The basics of a credit policy can be summarized as follows:

Know your customer. How well do you truly know your clients? What reputation do they have around town or among industry peers? What are their typical payment habits? Is there an end user beyond your customer that will affect payment to you? If so, how strong is that company? It is a recommended practice to request credit references and utilize public data to analyze your customers before you begin a relationship.

Know yourself. You need to be able to determine how much risk you are willing to take? This boils down to how much are you willing to lose. As we see with personal investors, some are willing to take big risks for the possibility of larger returns and others prefer smaller returns and limited risk. Find the balance that suits your business. Remember though that no one collects 100% from all its customers 100% of the time. Also be aware of how many “good sales” you have to generate to make up for the one “bad sale.”

Have a process and make sure it is communicated to all employees. This principle encompasses everything from your sales process (do your sales people understand your risk tolerance?, will they get the reference information you want?) to your invoicing process (what can you bill for?, when can you bill it?, where do you send the bill? and what approval is needed for your customer to pay the bill?) and finally to your collections process (do you have the right AP contacts for your customer?, are you making timely follow up inquiries?, and do you have any leverage if payment issues arise?)

Having clear expectations with your customer and your employees helps to set the tone and build relationships for your company to succeed.

Creating a sound credit policy is critical to avoiding confusion with customers and keeping your company’s financial house in order. For additional resources/samples of effective credit policies, see Inc’s Finance Guide: How to Create a Smart Credit Policy

Using Working Capital to Complement a Current Bank Line of Credit

By: Toby Dahm, Senior Vice President, Hennessey Capital

Before Reese’s Peanut Butter Cups became one of our favorite Halloween treats, nobody thought that peanut butter and chocolate could be combined to become something so delicious.  In the finance world, there is an often overlooked recipe for growth financing that creates a win/win/win scenario.  That recipe is to utilize factoring as an incremental financing tool in addition to an existing bank loan.

Hennessey Capital has utilized this strategy to propel many companies to a higher level of revenue and profitability, while enabling the client to maintain a very competitive financing cost structure.  For most small and middle market companies, a bank loan provides the lowest cost financing that they have access to.  However, it is common that a bank is comfortable at a certain level of exposure to a client, but the client’s growth trajectory creates a financing need that exceeds the bank’s comfort level.  This is where factoring can be the perfect tool to fill in the funding gap and enable the client to achieve success.

The benefit is that the client can very quickly put the factoring facility in place to complement the bank loan at very little fixed cost.  The factoring facility becomes a tool to finance their working capital needs as their growth accelerates.. By providing up to 85% financing of accounts receivable, without diluting any equity ownership, the factoring facility enables the client to access cash immediately, instead of waiting for their customers to issue payment.  Factoring provides great flexibility to the client by being able to finance the rapid growth when it is needed, while providing the choice to terminate the program when it is no longer needed due to expansion of the bank loan or a reduction in working capital growth.

An IT staffing company was able to utilize this program to take on additional work that enabled them to grow from $2 million in annual revenue to over $10 million during an 18-month period.  Although Hennessey’s factoring facility was replaced by an expanded bank loan, the client has continued to grow at a strong pace and is now achieving annual revenue that exceeds $100 million.  Another IT consulting firm utilized a factoring facility with Hennessey Capital to enable it to expand its base of consultants on one project from 10 employees to 75 employees over a 90-day period.  As they demonstrated their performance and profitability on this project, their bank agreed to increase their financing to replace the factoring facility.

Just as chocolate and peanut butter can be combined, a bank line and a factoring facility can also be combined to form a very healthy 3 way partnership between the bank, the client and the factor.

Conducting a Business Stress Test

By: Joe Romeo, Senior Business Development Representative, Hennessey Capital

As the nation has observed the government bailout process, I would like to think we have learned one thing – conducting a business stress test is a valuable exercise.  We watched government require the banks to undergo stress tests to make sure they could survive the most difficult market conditions – what did we learn?

It’s important to evaluate just how fragile your businesses truly is and gauge if your business has what it takes to weather an economic storm. This is where a “self-administered stress test”  comes into play.   
 
 This exercise is a key part of “strategic contingency planning” which will
test your operation under the most extreme, worst-case scenarios.  What is the potential impact if key aspects of your business outlook change?

The “self-administer” component is a key part of the test.  You do not need an outside consultant to help you through this process - you know your business best and can determine events would be most devastating.
Pose a few “what if” questions to your executive team:

• What if business revenues dropped 25%?
• What if price competition forced you to drop your prices by 20%?
• What if your biggest customer defaults?
• What if you lost your two largest accounts?

Run the numbers and see what your balance sheet looks like. How could the results impact your financing relationship?
 
The exercise of doing so may be a bit sobering but will prove wise.  This should be a part of every businesses strategic plan.  A contingency plan is critical to your survival.
 
Delaying ambitious business growth objectives in favor of establishing a rainy day reserve that can sustain the business through an extended down period would be prudent.
 
The days of unbridled growth and “the sky’s the limit” attitudes may not be gone, but should be tempered with other market-place realities that could occur.
 
to succeed in 2010 and beyond requires a new approach.  Thus, I offer 3 tips to prospering in a tough economy:  

1. “Assume the position.” In the confusion of these uncertain times, people are looking for some direction. Assume a leadership position and be bold enough to lead the way
2. Include a business stress test as part of your strategic planning
3. Over-deliver extraordinary customer service and exceed expectations. Get outside your business’s  comfort zone to defy the status quo and customize your product or service to fit your customers’ need
      

Insight on the banking community’s stress test:

http://www.nytimes.com/2009/02/26/business/economy/26banks.html?_r=1

http://www.cbsnews.com/stories/2009/02/25/eveningnews/main4829645.shtml?tag=currentVideoInfo;videoMetaInfo

When it Makes Sense to Hire a Turnaround Consultant

By: Jeff Wright, Senior Vice President, Hennessey Capital

In my 27 years in the asset-based lending and commercial loan workout business, I have observed many companies experiencing significant problems with operating performance. In a typical scenario, these businesses endure a substantial decline in revenues and/or are dealing with costs that are increasing at a higher rate than revenues. Management is often slow to begin cutting overhead expenses. Losses and tight cash flow frequently trigger covenant violations with their lenders who, in turn, to take steps to protect their security interests. When this occurs, it may be time to consider hiring a turnaround consultant.

Many companies, however, use the excuse that they can not afford an outside consultant or they can handle the task internally. It is important to recognize that even the most talented businesspeople can benefit from the support and guidance of an experienced consultant.

Hiring a consultant can provide an unbiased, independent opinion of the company’s current position. When tough decisions need to be made to reverse downward trends in operations and changes must be implemented and monitored, consultants can analyze the business decision from a position of greater objectivity. Moreover, some of the “change” burden can be handled by the consultant so that management can focus on the day-to-day responsibilities of running the company.

The most common benefit to hiring an outside consultant is access to his or her experience. The consultant can draw on that field experience to fill gaps in the management team’s skill set and develop and implement a plan that has worked in a similar situation in another organization. Other benefits include the consultant’s ability to draw on sources in their network for advice, and to connect with potential customers, suppliers, investors, or buyers. Many consultants also have relationships with a variety of lenders and can help in negotiating favorable restructuring agreements.

The overlying take-away here is that cash is king. The ability to improve cash flow is the consultant’s primary objective, so that the company can continue as a going concern, grow the business, and take advantage of new opportunities.

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