NFP News – Jan 13 and 15
In light of so many nonprofits being concerned about declining or potentially declining revenues, I saw an interesting article by Steve Watkins in the January 2nd, 2009 Cincinnati Business Courier. The focus of the article, entitled “Chief Rescue Officer”, was on professional consultants or managers who are brought in as “turnaround” experts when business owners need help. I found many of the comments very applicable to our circumstances in the nonprofit community and thought they might inspire your thinking as well.
Comments from Leonard Eppel, President of Financial Resource Associates Inc.:
· It’s been difficult to find solutions because people have waited so long. Our options are more limited than they have been in the past.
· He is seeing some problems so late that the only solutions are to sell or liquidate the business. That’s never been that way before. The downturn has caught a lot of people in shock mode.
· We teach businesses to plan for their cash flow. One client now routinely runs 12 week projections of cash needs.
· Some businesses don’t recognize they are bending over backwards to serve customers and have to realize they can’t afford to give dramatically more than what they are being paid for.
· He tells business owners that the key now is to manage to the current situation, not what they hope the economy will do. Project revenues conservatively. Plan manpower based on revenues.
Comments from Don Feldmann, President and CEO of Winton Associates, a capital advisory firm:
· Financing is hard to get. That puts a premium on identifying problems early.
· A common pitfall: Don’t cut back on marketing and sales.
· Some businesses realize they don’t know why their customers buy from them so they don’t know how to continue sales in tougher times.
· Sometimes, cutting costs means laying people off – that’s tough for many owners. One trick is to set a date by which you will cut people if things don’t improve to a predetermined point. Then find someone who will hold you to that date.
· Company owners don’t know all their costs in many cases and should track every expense.
How does this strike you? Can you see some parallels? We would love to get your feedback.