Crisis manager may head off failure

SMALL BUSINESS

November 02, 1992|By JANE APPPLEGATE

This week, far too many small businesses will fail because their owners are too stubborn or too embarrassed to seek help.

Most business owners keep their problems a secret because they are sure that they can't afford to hire someone to straighten things out. But if you don't solve the problems, you won't have a business to run anymore.

In addition to free counseling programs such as the U.S. Small Business Administration's Service Corps of Retired Executives, there are crisis managers who rescue business owners for a fee that won't make you gasp.

Tom Thompson, a former soft-drink company executive, races across the country doing what he calls "quick and dirty" crisis management for small businesses.

He works fast -- usually spending less than a week on each assignment. Because he doesn't spend months analyzing problems and writing detailed reports, Thompson's clients say he can fix a business for as little as $2,000.

This sounds too good to be true. But Thompson keeps his overhead low: He relies on an answering service to take messages, he has no office and he brings in associates to help him on an as-needed basis.

"Small-business owners get so emotionally involved in their business that they lose sight of what is really going on," Thompson said. The first small business he bailed out was his wife's printing company. "She was in trouble, but she wouldn't cut payroll or negotiate with her vendors," he said. So he stepped in as the "bad guy" and fixed the problems while his wife remained the "good guy."

The biggest problem he sees: Most business owners do not know exactly what it costs to produce their products, so they make serious pricing mistakes. The second most prevalent problem is the fear of dealing with creditors and working out ways to pay them. Thompson says creditors would rather get you to pay something in good faith than watch you go out of business.

Nancy Kaeser, owner of the Fish Place in City of Commerce, Calif., credits Thompson with saving her restaurant last summer. Kaeser was behind in her rent, dodging phone calls from creditors and pawning her jewelry to raise cash. She was at the point where she dreaded going to work when a friend in Arizona suggested that she call Thompson.

Within three days, Thompson and his colleagues had analyzed every aspect of her ailing restaurant operation. The team showed that she was spending too much for food. They reworked her menu and increased some prices.

They helped her reschedule 10 employees to cut labor costs during slow periods and boost productivity during the busy lunch hour.

Thompson negotiated a payment schedule with her landlord, made arrangements with other creditors and found Kaeser a new group of food vendors.

"The business hasn't increased much, but we cut our expenses and we are in much better shape," said Kaeser, who also took Thompson's advice and put together a brochure to promote her catering for $600, rather than the $3,000 she almost spent.

(To reach Thompson's Alliance Management Group in Downey, Calif., call [310] 862-7123.)

* The SBA is going high-tech with its new computer-based electronic bulletin board service. Business owners with computers and modems can access the bulletin board by calling (800) 859-INFO (for 2,400-baud modems) or (800) 697-INFO (for 9,600-baud modems).

(Jane Applegate is a syndicated columnist and author. Write to her through the Los Angeles Times, Times Mirror Square, Los Angeles, Calif. 90053.)

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