July 2013    


As we discussed in an earlier newsletter, it is always a good business practice to periodically survey your clients to give yourself a better idea of how well you are meeting their needs and what you might do to serve them better. A few months ago, we distributed two surveys, one to our clients and the other to our referral sources. We have tallied and reviewed the responses and are presenting a summary here. We are pleased with the surveys for two reasons: Most of the responses were positive, and most of the comments and criticisms were helpful. We will use what we have learned from the surveys to refine and improve our offerings during the coming year.

During 2012, our seven-member team completed more than 30 engagements, assisting businesses experiencing financial and operational challenges in eight states, from Connecticut to Florida and as far west as Ohio. This newsletter includes summaries of five of our more interesting engagements of the past year. We will offer brief reports of other completed engagements in upcoming newsletters.

A special thanks to all who responded to the survey.

Tom Beane, President CMC CIRA


And the winners are...

To encourage participation in our survey, Beane Associates offered two iPads, one to a client representative and one to a referral source. Winners were chosen in a random drawing.

Shown here are the winners (top) RuthEllen Ruth, benefit accounting supervisor for the Loomis Company, with Tom Beane and (bottom) Larry Kamin (right), a Sovereign Bank vice president, with Chris Beane, chief marketing officer for Beane Associates.


Survey says!

By Tom Beane

Whenever a business surveys its clients, it’s natural to feel some uncertainty while waiting for the responses to come in. You hope to find out that you’re doing well, of course, but you also hope that the replies provide useful information that can help you do better.

In surveying two separate groups — clients and referral sources — Beane Associates received the results we were hoping for: strong favorable ratings and candid comments that suggest areas of improvement.

The surveys had normal completion rates among both clients and referral sources (primarily bankers, attorneys and certified public accountants). Interestingly, when similar questions were posed to each group, the responses were similar.

Here are some examples of these parallels. (Most questions were graded on a scale of 1 to 5, with 1 indicating strong dissatisfaction or disagreement and 5 indicating strong satisfaction or agreement).

In overall level of satisfaction, we scored 4.6 among clients and 4.7 among referral sources. In meeting or exceeding expectations, we scored 4.2 among clients and 4.1 among referral sources.

Asked whether Beane Associates “exemplifies honest, ethical business practices,” our clients graded us a perfect 5.0 and referral sources scored us at 4.9. We are certainly proud of the responses to that question.

One area of divergence occurred in the question about fees. With a rating of 3 representing average fees, clients rated us at 2.6 while referral sources scored us at 3.4. The divergence is interesting, for it’s natural to think that troubled businesses would tend to respond negatively to consultants’ fees but they rated us below average. In fact, in response to another question, 90 percent of the clients agreed that “the value gained from our services exceeded the associated fees.”

In addition, all of the clients who responded strongly agreed that the consultant assigned to the job had the appropriate experience to handle the engagement. Also, for every skill that we asked clients to evaluate —financial/accounting, strategic planning, quick decision-making and operations expertise — scores ranged between “above average” and “strong.”

As one of our associates, Kevin Beane, noted in his recent article in this newsletter, it is important to include several open-ended questions in any survey. Open-ended questions help you dig deeper into what your customers are thinking; responses can provide warning signs or suggestions for improvement.

The open-ended questions in our surveys generated a number of helpful comments.

One client suggested that we have more direct communication with the client’s vendors in order to facilitate making new payment arrangements and agreements. That comment is interesting because in many of our engagements the client prefers that we keep a low profile while we help them work out their problems. If assuming a more vocal or more visible position would serve a client’s best interests, we will certainly consider doing so.

We received other comments suggesting that we create different levels of service packages at different price points and that we explore additional ways of maintaining a consulting relationship with clients after the original purpose of the engagement has been accomplished. These too are valuable ideas which we will strongly consider this year.

While many of the comments were memorable, this one in particular stands out: “You can’t put a price on being able to take a failing business, learn how to manage cash flow and turn around your business to be very profitable.”

When our clients attach such value to the work we do, it only increases our motivation to do as well — or better — on our next engagement.


Construction rental equipment: Advisory

Situation: A regionally owned equipment rental group with absentee and uncooperative ownership was having difficulty meeting its debt service. The company had violated numerous financial covenants.

Result: After failing to receive timely financial information, the secured creditor retained Beane Associates to perform a viability analysis. By meeting with the owner and branch managers, we were able to gather financial data that enabled the secured creditor to have a clear understanding of the company’s situation. This allowed the secured creditor to rework existing debt into a more manageable term and payment schedule, providing the time necessary for the company to exit the financial institution.

Foreign auto dealership: Advisory

Situation: A foreign automobile dealership was undergoing considerable change due to new management and deteriorating sales in the poor economy. This resulted in a significant out of trust position and customer trade lien payoff approaching $1 million that could not be reversed.

Result: The secured lender hired Beane Associates to review and monitor the out of trust position and review ongoing operations. Weekly auditing of the books and records resulted in stabilizing operations, reducing out of trust violations and ensuring on-time payments for newly sold vehicles. Eventually the dealership declared bankruptcy and was sold.

Trucking and convenience store operator: Restructuring

Situation: This multi-business group was having cash problems driven by hurricane Katrina and its aftermath. The secured lender, after experiencing several defaults to the lending documents, recommended Beane Associates to the company.

Result: The company hired Beane Associates to assist in a restructuring and cost-reduction plan. The company was restructured, cost-cutting was implemented, and several store locations were offered for sale. The son of the owner attempted to finance a buyout of the hauling business. After failing to obtain financing, and several deals to sell store locations fell apart, the company decided to file bankruptcy.

Electrical component manufacturer: Advisory/turnaround

Situation: The manufacturer experienced a substantial decline in business following the death of a partner who had managed sales and marketing. The declining economy also caused a substantial shift in its customer base. Although sound operationally, the business was in a severely unfavorable cash and revenue position and was months behind in payments to its bank.

Result: Beane Associates was sent in to review an owner-proposed refinancing through receivable factoring and to evaluate possible liquidation scenarios. We determined that the business could recover, provided it implemented regular and strict cash management, improved inventory to production management processes, and redirected marketing and sales priorities. The bank accepted a proposal based on taking these actions. We advised and monitored the business through its transitions until the bank was fully reimbursed and a cash surplus existed so that a line of credit was no longer required.

Semiprivate golf course: Receivership

Situation: A public golf course and training facility, once ranked in the top ten in the nation in annual revenues, overextended itself by building a premier clubhouse, lounge and restaurant. The owner was unable to manage its expanded property, nor could it plan and account for continued defaults and losses. Increasing financial distress distracted the owners from their business operations. This neglect resulted in a downward spiral of credibility, deteriorating management of the property and increasing discontent among employees.

Result: Beane Associates Inc. was appointed receiver to take possession, manage, operate and maintain all assets of the course. We prepared the business for auction and secured transfer to new ownership with little pre-receiver documentation or cooperation. Because of numerous claims against assets combined with the disgruntled personnel, we immediately secured the facilities, reconciled inventory and established new  operational arrangements to stem further decline of the site. Uncontested assets were returned to owners and turnkey grounds operations and security were established, allowing a successful transfer of ownership, on schedule and under budget.

About Beane Associates, Inc.

Founded in 1984, Beane Associates, Inc. continues to build an impressive track record in helping private and publicly owned companies improve operational effectiveness and profitability during a time of financial challenge. The company has offices in Wilmington, DE, and Atlanta, GA.

22 The Commons, 3518 Silverside Road, Wilmington, DE 19810-4907
Phone: 302.479.5438 Fax: 302.479.5434