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Business Ailing?
Call a Specialist
By Kelly Langford
San Antonio Business Journal
Published: July 13, 1992
When ailing businesses find their symptoms are getting so advanced that it's getting hard to function, calling a specialist may be the cure, but people in the field agree that business owners are just as hesitant to call a business doctor as man people are to make a trip to the dentist.
"People tend to wait to long," says Financial Technologies president Bob Swartz. They usually think something is going to happen and it does. It gets worse." Swartz's firm specializes in helping businesses when they've gone too far behind in their bills or have begun robbing Peter to pay Paul. The firm sees 30 to 50 clients a month, usually small to medium sized businesses. Most are from San Antonio.
"When most business people start having financial problems they try to borrow their way out as a solution," Swartz explains. "But they usually can't support the pay back." In San Antonio, Swartz says he has seen many businesses that are so far down the drain that they have lost their ability to acquire raw materials and products. Some can still get contracts, but they just can't finance the inventory. Suppliers don't want to lose the business, and they certainly won't be able to collect overdue funds if their customer goes out of business, Swartz explained, so they usually are willing to negotiate a settlement -- many times at a reduced payout. Sometimes a business requires a creative solution, like a contract between a purchaser, vendor, and his client.
Swartz begins his service by telling the troubled business owner to refer all creditors to him. "If someone is good at selling widgets, they ought to be out selling widgets," he said. People get so busy handling creditors that they can't expand the efforts of their business. Collection agencies and creditors have psychology that the most pressure, most often gains the most results."
When a collection agency calls delinquent accounts and puts pressure for payment, a lot of people turn around and use money for other bills to pay part of the debt, Swartz said. "Then they end up with two creditors because now they can't pay the phone bill or electricity," he said.
It's important to try to turn around a business before it's strapped for cash, he says. When the bills are 60 days to 90 days past due, it's time to visit the doctor. "In the business community a lot of people don't know they can get services like ours," Swartz said. "They tend to let themselves get buried deep in trouble."Before negotiating a business' debt, Financial Technologies has to see financial records, he said. If none exist, they've got to create some. Swartz says these records usually reveal what got the business in trouble in the first place, and he makes it part of his service to educate people how to avoid a reoccurence. For Swartz's service, there is a retainer. Fees are based on a percentage of the debt he is able to eliminate. The initial consultation is free.
Swartz admits that he hasn't really seen an upturn in the San Antonio market place during the last six years. Many businesses that get behind have difficulty catching up. "I certainly haven't seen a significant growth in the last two years," he said.
