The Workout Is Important Even As Business Improves

As business gets better, for some, the workout becomes even more important. I am not suggesting that I believe the economy is getting better, however, there are places and businesses that are improving, with revenues up and profits increasing. This is certainly good for those enjoying some level of resurgence.

The point here is that if you are in an area that is rebounding, or in an industry that is demonstrating renewed strength and are coming out of a deep, dark recessionary hole saddled with debt, you may be ill-prepared to move forward and take advantage of the new opportunities that may be available for your business. It was true before – with declining revenues, debt service in whatever form became impossible to service. The result was unpaid debt, be it to your vendors, your secured lenders, your leases, taxes, landlord, franchisers, whomever. Now that you are capable of emerging, back into profitability, you may remain buried by yesterday’s issues, unable to accelerate and take advantage of emerging markets.

Once again, I urge you to do the workout. How else do you jettison the anchor that is now holding you back?

You probably cannot earn enough to both pay back unpaid obligations and fund your ramp up, thus you are destined to squander capital on debt rather than on growth. This will not work. The choice must be made to fail in the face of opportunity or succeed by doing the workout. I urge you to do be honorable for yourself, your employees and yes, for the secured and unsecured creditors and lenders you are defaulting on. Do the workout, it is a better conclusion for all than failure.

For those not facing possible growth, what are you waiting for? There are opportunities to succeed if you jettison your debt. Do the workout, there is no better way to emerge from your current situation.