THE CONVENTIONAL WISDOM

THE CONVENTIONAL WISDOM

The conventional wisdom is that crises will plough us under, and if we still have a company at the end of the tsunami, it will be smaller,uncomfortable debt-ridden and without many prospects for returning profits to its stockholders. The conventional wisdom

also says that our reputations will be dogged by continual reminders of our previous failure. Nothing could be further from the truth. Most fortunes are made in hard times. Most

successful entrepreneurs springboard out of crises.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

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CRISIS AS A SPRINGBOARD

CRISIS AS A SPRINGBOARD

It is not only possible, but it should be your goal, to use a crisis

to pole-vault to a higher level of success than the company

achieved before the trouble hit. Crises are meant to be

springboards for success but many managers are not trained to

manage their businesses through crises.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

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KEEP A LOW PROFILE

KEEP A LOW PROFILE

Keep a low profile. Keep your head under the hood and fix the

motor. Don’t look up to tell the community of critics that you

have just about got it fixed. You haven’t, workouts are unsteady

processes, and you will do quite a bit of backsliding before you

have tunnelled through the dark. If the lighting at the end of the

tunnel appears to be 90 days away it isn’t. It is more like 190

days away. If you think It is 90 days away and you promise your

creditors that they will receive a scheduled payment in 120 days

you probably will be apologising to them for another delay in 120

days and pleading for an extension.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

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#crisis #turnaround #liquidation

Step Six: Implementing the Plan

Step Six: Implementing the Plan

Once the plan is accepted by all creditors, it is implemented and carefully monitored for two to three months to make sure that it is working smoothly. This is a critical period that tests the crisis Manager’s ability to do what he or she said could be done.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #troubleinparadise #recession #restructuring

STEP FIVE: NEGOTIATING THE PLAN

Step Five: Negotiating the Plan

The crisis manager will present the plan to the largest and most

important creditors first. They may request modifications or they

may refuse to accept it. If they refuse, return to step four, or call

in the bankruptcy lawyer to prepare a filing as a threat, but also

be ready to file in case the threat backfires. The plan must be

negotiated quickly, clearly and in a manner that leaves the

company enough back doors and circuit breakers to make

alterations or to find cash if the plan cannot be lived up to.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

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#crisis #turnaround #troubleinparadise

STEP FOUR: PREPARING A TURNAROUND PLAN

Step Four: Preparing a Turnaround Plan

Before the ink is dry on step three, the crisis management team

begins to develop a rehabilitation plan that will return the

company to normalized operations, albeit possibly as a different

size or type of business. The plan will include restructuring debt,

negotiating new terms with suppliers, redeploying assets and

personnel and raising capital (if the cash on hand is inadequate).

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #troubleinparadise

STEP THREE: GENERATION CASH

Step Three: Generating Cash

The crisis management team will turn its attention and

experience to generating a pool of cash. This will be done by

slashing expenses, selling off unused assets, sale

leasebacks of fixed assets, spin-offs of divisions,

production changes, adding new channels of distribution,

changing the terms by which customers pay and possibly

raising bridge capital. It is impossible to rehabilitate a

company without locating free cash or raising cash through a

financing. Fortunately, there are many lenders to and investors

in companies that are in a formal or information rehabilitation

process.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #troubleinparadise

H. Ross Perot

H Ross Perot

H Ross Perot visited the spouses of his salespeople and gave them shares of EDS stock to win their allegiance when he needed his sales force to remain at customer sites for months on end. Unpaid withholding taxes are the most serious account payable, but the government will accept a stretch out up to six years if you present your story to them openly and honestly.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #restructuring

A QUICK STUDY

A QUICK STUDY

When a company has its shoulders on the mat, there is not

much time for extracurricular activities. Even reading this book is an investment in time that you may feel you can ill afford. So let me give you some quick time and worry savers: Ted Turner put a cot in his office and slept there when Turner Broadcasting system was in crisis.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #crisismanagement

WORKOUTS CANNOT BE RUSHED

WORKOUTS CANNOT BE RUSHED

A troubled company is not very popular. Friends that you have networked with in the past, people you thought you could count on for financial or moral support, may give you the cold shoulders. If your company employs many people in the community and some of them are laid off, you and your family may be the object of scorn in the community.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #workout

STEP TWO: MITIGATING THE CRISIS

Step Two: Mitigating the Crisis

This step is the one which you buy time to effect a workout plan.

A crisis management team of five loyal and courageous

managers is put together, and they immediately meet with the

nervous people who are the gatekeepers at the flash points calm

their fears and win their support. These probably will include

employee groups (or union leaders), the company’s principal

lender key suppliers and important customers. The operative

phrases are “negotiable standstill agreements” with the

creditors to buy time and “damage control” to see that the

gatekeepers are properly communicated with, which is central to

the success or failure of negotiating the standstill agreement.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

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#crisis #turnaround #troubleinparadise

WORKOUT AND TURNAROUND PROCESS

WORKOUT AND TURNAROUND

PROCESS

There are six steps in the workout and turnaround process.

They follow each other in sequence and although the crisis

manager may double-back on step number five to re-examine the information and conclusion he or she filed away in step number one, the sequence must be followed in a systematic manner for the company to be rehabilitated outside of a Chapter 11 filing or liquidated in Chapter 7.

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

http://www.amazon.com

http://www.amazon.co.uk

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http://www.booksprice.com

http://bn.com

http://kalahari.co.za

#crisis #turnaround, #liquidation

CRISIS MANAGER

CRISIS MANAGERS

Crisis managers are skilled and carrot-and-stick

negotiating. “This is the best plan we can offer you and if you

can‟t accept it, we are prepared to file for protection where you will receive less and it will take much longer to get you paid.”

Extracted from a book titled: RECESSION BUSINESS STRATEGIES by Prof John C. Mbuya

Available from the following bookshops:

http://www.amazon.com

http://www.amazon.co.uk

http://abebooks.co.uk

http://www.exclus1ves.co.za

http://www.kalahari.co.ke

http://ww.infibeam.com

http://www.booksprice.com

http://bn.com

http://kalahari.co.za

#crisis #recession #turnaround #restructuring