Consulting Firm Gives Business Owners Financial Second Chance with 'Fresh Start' Turnaround Strategies

November 29, 2006; 01:32 AM
Strong consumer spending, low unemployment, favorable interest rates and steady economic growth are typically ideal conditions for private enterprises to thrive. Yet, despite today's generally positive business climate, an estimated 64.2% of businesses fail within a 10-year period according to a study published in the Journal of Small Business Management.

Similar data from the National Federation of Independent Business (NFIB) shows that over the lifetime of a business, 39% are profitable, 30% break even, and 30% lose money. Tragically, many of these businesses could have been saved if only appropriate action had been taken in time says Jeffrey Palmer, a serial entrepreneur and founder of Fresh Start Business Services.

"Most businesses don't fail due to poor judgment or incompetence on the part of the owners," Palmer states firmly. "On the contrary, the vast majority of people running the small and mid-sized companies that power our economy and make this country great are very good at what they do."

Instead of finding that mismanagement is at the root of most company's problems, Palmer says it's usually the accumulation of a number of factors that can steer an otherwise healthy business into troubled waters. The key, he says, is to figure out what's going wrong so appropriate steps can be taken.

"Just as each business is a reflection of its owner's one-of-a-kind personality, the series of events that can make a business sick are unique," he states. "The good news is that once the core problems are identified, there are highly effective strategies to put the business back on track."

During his years consulting with a variety of business owners, Palmer says the first critical decision is to admit they need help. He adds that once they see the value of having an outsider's perspective, they can move forward with a new sense of confidence.

"I like to equate it to having someone around who knows First Aid as compared to waiting for help to arrive that might well be too late to do anything."

Of the many 'business rescues' he's successfully completed with his Fresh Start techniques, Palmer says virtually all had a viable business model that simply needed "some fine tuning, better cash management and a clean slate."

"When it comes to money, a little breathing room goes a long way," he smiles. Palmer cites as a typical example a Northern California screen-printing shop that had 'hit a wall'.

"Even though they were a small operation, they had grown considerably by specializing in custom sportswear for high schools and colleges," Palmer recalls. "The owners had invested heavily in new, automated equipment and t-shirt and fleece wear inventory. The crisis came when they had a cash crunch and found they couldn't service their debt with new orders."

The solution was simple and swift: an injection of cash and a revised game plan.

"We restructured their debt and secured protection from their creditors to give us some time. Then we helped their salespeople identify new, untapped markets – amusement parks. To complete the transformation, we encouraged them to launch a line of clothing that would give them higher volume and better margins," he says proudly.

"The upshot was that they repaid the loan ahead of schedule and eventually sold the business for many multiples of what they thought it would be worth."

In another case, a family that owned a vacant lot asked Palmer for help. They wanted to fund their retirement by selling it but feared that a decline in the commercial real estate market had eroded its value. Within weeks the Fresh Start program gave them a best use analysis of the land, a short list of options on how to position the property for the maximum asking price and, finally, a business plan for a self-storage operation that was included in the sale price.

“Essentially the family invested a few hours of their time and a nominal amount of capital for getting a premium for the largest asset they owned,” commented Palmer. “Of course, the positive effect that it had on their lives was enormous and very tangible.”

About Jeffery Palmer
Jeffrey Palmer is the founder and President of Fresh Start Business Services. For over twenty years he has specialized in business turnarounds by applying his highly effective financial and managerial techniques. For further information, contact him at (805) 896-1055 or e-mail FreshStartBiz@gmail.com