Storms & Patterns – “The Black Swan is still around”
When I was a child, I remember my Grandma Sarah telling me –“in order to predict the future, look to the past”.
We are now in an environment of tight monetary policy, high energy prices, inflation (maybe stagflation is coming), an increasing cost of living and a government divided by social, cultural and political issues.
There is little or no control on the cost of healthcare and social benefits. We are technically in a “zone of insolvency”. As Winston Churchill said “ You can always count on the Americans to do the right thing after they have tried everything else”.
The good news is that the past shows the determination and grit of the American entrepreneur and their vision’s to persevere.
The capital markets are tight, but money is available, however senior lenders and equity are experiencing the every 2-4 year cycle of under-performing and distressed investments.
What to do???
Gerbsman Partners Advice if you have an under-performing or distressed company in your portfolio/
Before such an event occurs:
As a board member, investor, senior lender or stakeholder:
- Implement tight cash flow, account receivable focus and inventory reporting so that you are alerted to problems early.
- Focus on the control, preservation and forecasting of CASH on a weekly, monthly and quarterly basis.
- Require “bottoms up” forecasting for all aspects of revenue and expense. Have the CEO and CFO defend ALL numbers.
- Hold the CEO responsible and accountable for Performance. If you are off the business plan/forecast, re-forecast based on the reality of “what is” today.
- Communicate frequently with all parties at interest. Check that the CEO is providing leadership, motivation and morale to the management team and employees.
- Review all companies in your portfolio. Identify and define action plans to fix weaknesses now.
- Utilize professional resources to assist in maximizing enterprise value, when appropriate.
When such an event occurs:
- Face up to reality and act quickly. When things are going bad, waiting seldom improves them. We have never seen a board of directors act too quickly when faced with a crisis. We have all too frequently seen a board act slowly or not at all.
- Call for assistance early. The earlier professionals can get involved in the process, the better the potential outcome in maximizing enterprise value. Many times board’s request assistance only after a company has run out of cash. Many more options exist to maximize enterprise value if a company has some running room.
About Gerbsman Partners
Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 120 companies in a wide and diverse spectrum of industries, ranging from technology, medical device/life science, digital marketing to cyber security, to name only a few.*
In the process, GP has successfully restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations, and has assisted in over $2.3 billion of financings, restructurings and M&A transactions.*
Gerbsman Partners has offices and strategic alliances in San Francisco, Orange County, Boston, New York, Washington DC, McLean, VA, Europe and Israel.
The Gerbsman Partners team are available to strategize and develop action for maximizing and monetizing value. Also, Gerbsman Partners does only one retained engagement at a time and I am the “team leader”.
I look forward to speaking with you and my team and I are always on call to assist.
Best
Steve
Please click on link – http://gerbsmanpartners.com
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