The Horse Is Out Of The Barn… And THEN You Close The Door?!

I cannot tell you how many times we see it. We have a consultation with a prospect whose business is clearly in a major downturn, which will clearly result in the collapse of the business. Revenues are down, overhead is up, debt service is choking them to death. They call, we evaluate and explain their options and they thank us then disappear into their self-pity.

Then, later, we get the frantic call begging for help. “We just got served by the bank, they are suing us, asking for a receiver to be appointed. Our accounts were swept and we are bouncing checks. Help!!!” They ask, “Is it too late? Must I now file bankruptcy?”

Why do business owners so frequently wait until the horse is out of the barn before shutting the door? How silly can you be? This is very serious stuff. Your business, your financial survival, the jobs and families depending upon you are all at risk and you waited until the inevitable happened—the bank took action. Wow, what a surprise. Did you think they lost your file? Did you believe that somehow something would happen and it would all get better? Or did you simply practice the ancient art of avoidance, choosing to not acknowledge the danger (or take the necessary measures to avoid it) despite the fact that you did know this was going to happen someday.

The good news is, yes, we can probably help, even at this late time. We can always intervene and implement our strategies, however, it is harder in this situation. You are weaker and the bank is already in attack mode, deciding that an attack is the only way. They’ve hired attorneys and set their traps, launched their scuds and generally started the liquidation and foreclosure process. Turning them around is far more difficult now than if we had started in advance of their assault and had gotten them on our workout team early, making it possible for us to work together to resolve your problems.

I hear so many business owners state, “Well, I will wait and see what happens,” as if they think this is a unique case and no one knows what will happen, as if there are options, as if the bank has more than one strategy. Foreclosure and liquidation of the collateral, and then pursuit of your personal guaranty and all that you own outside of the business. that’s what will happen. No surprises. We told you, you just chose not to act, at your own peril. Then, when the “surprise” to end all surprises occurs, the bank assaults you and you come running to us asking if it is too late to do something proactive. Can we still save you?

While the answer is probably yes, the risk is that you are weaker now, have less cash, took losses, and thus it is more difficult and more dangerous. You’ve waited until the horse is out of the barn before you decide to close the door. I will never understand this thinking and yet it is so prevalent. We all know what is inevitable, we all know we must act, yet so many don’t.

This is bad behavior—counter-productive and even self-destructive—yet it’s repeated over and over.

Enough. Do your research and act. Prevent the horse from leaving the barn, close the door first! It works so much better then chasing the horse down, trying to return him to the barn. Act before it is too late, more risky, and more costly. You gain nothing by waiting for the inevitable to occur.