A few months ago I received a call from a small business owner in total distress. She had an excellent education and background in restaurant management, and about a year back opened her own restaurant. Her crisis was fairly simple: Her banker had given her 15 days to come up with a plan to turn it around or they’d be backing "the truck” up to the back door of her restaurant, and reclaiming her equipment.
I felt like I had opened a book to a chapter in the middle. I had a hundred questions that begged to be answered…but she had 15 days! My first thought was, "Sorry, I can’t help you. Maybe if you’d called me a few months ago…”
But in this business, we get what we get. Of course I met with her, just like you would have. I met with her landlord. And I met with her banker. I even facilitated a meeting between the restaurant owner and my best CPA, himself a "recovering banker.” But it was too late to make any significant difference. Fifteen days later, she was out of business.
But that experience got me thinking about her and others like her. And I’ve not been able to forget her painful cry for help. Since then a strategy – or a plan has been taking shape in my head. My intent here is to share my thoughts with you, my professional peers of NACCE. For lack of a better name, let’s call it The Small Business 911 Service.
It occurred to me that here in Wisconsin we spend a tremendous amount of time, resources, and energy on nascent entrepreneurs–start-ups, and early stage businesses. A large number of those who graduate from our classes are sole proprietors or are only destined for self-employment. Former Governor Tommy Thompson once described Economic Development as a three-legged stool. He used to say: "One leg is Job Development, one leg is Job Retention, and the third leg is Entrepreneurship.” And I started to think, "What do we do for those businesses that need urgent help NOW? How do we respond when they are in total crisis? I was thinking of job retention! It seems to me, we don’t do a lot. ”
The restaurant owner’s problem was that she was so busy scrambling to make it, that by the time her banker lowered the proverbial boom on her, she was already paralyzed–and was barely able to speak when she found me. In reality, her business had already died–she just didn’t know it yet. She didn’t just lose her business; seven people lost their jobs!
But what if, in the name of "job retention,” we made our new Small Business 911 Service known far and wide and easy to access? What if we branded it and promoted it! Then, when the call does come in, our response would work something like this:
1. We pull together an "A-Team” consisting of five professionals with expertise in sales and marketing, finance, human resources, systems management and a technical specialist unique to the business (in this case, it would have been restaurant ownership). The complexion of the team is uniquely based on the client.
2. The A-Team responds within 48 hours. Each A-Team member conducts a SWOT analysis from his/her respective area of expertise. They interview, examine, question, read, observe, analyze, probe and prod. We spend an intense seven hours in the business. At the end of seven hours, the A-Team reassembles in private and lines the room with flipchart pages of findings, both positive and negative.
3. After substantial debate, sharing of findings and discussion, a definitive Action Plan is created with essential steps for correction. These steps are then prioritized, and a realistic timeline is created and agreed upon.
4. The following morning, the A-Team meets with the business owner to reveal and discuss its findings. This takes the form of an Executive Summary–short, succinct, powerful, dynamic, strategic and goal-oriented. Input is sought from the owner briefly, but in the end, the owner must agree and commit to the Action Plan and the timeline.
5. This then becomes the working action plan that the bank receives and must endorse.
6. We invoice the bank $5,000 for the day. That’s a $1,000 for each A-Team member’s time and commitment to the process. The bank then can amortize the $5,000 over the life of the business loan. So ultimately, the business pays for the process, but in a way they can afford.
This fantasy of mine is built on the presumption that the bank is not interested in seeing a loan default. Nor are they interested in owning restaurant equipment. They are interested in short-range and long-range success. I hope I’m not wrong about that.
My question to you colleagues of mine is this: Have you ever heard of such a thing? Is anyone doing this now? Do you think it could work? Can you think of ways to improve this process? I’d love to hear your thoughts. Here is my contact information:
Andrew (Andy) Clark, Manager, NWTC Center for Entrepreneurship, Business Assistance Center, 2701 Larsen Road, Green Bay, WI 54303, 920-498-7124, firstname.lastname@example.org