An All Round Solution

Many problems in business are exacerbated by the reluctance of owners to face up to the real issues. But when a Bank decides it cannot lend more, owners have to rethink their strategy, which can lead to surprising results.

Beer & Young, the turnaround equity experts, often find that equity is only part of the solution – an Angel’s management skills and contacts may be more important than their money.

Equally, working with Beer & Young to present a case to investors can be the catalyst for a fresh approach, forcing owners to look objectively at both the business and their skills.

Outlined below is a case (names have been changed) where introduction of Beer & Young resolved the company problems without the need for equity.

MIDAS
Midas had two separate aspects to its business, marketing and publishing. Cash flow was tight and business difficult. Elaine, the owner and director, was concerned about her personal position. She was introduced to Beer & Young by her financial advisers because:

• Turnover was £1,500,000 pa and dropping
• Bank debt was £150,000 ,fully supported by Elaine’s personal guarantee
• The Bank was concerned about the credit and wished to reduce their exposure
• Management control of the two separate businesses was difficult and very stressful especially as Elaine’s skills were in marketing not publishing

Beer & Young were able to resolve all the issues:
• We found an investor wanting to merge the marketing business with his own. Unfortunately he did not want the publishing business.
• Midas instructed Beer & Young to sell the publishing business.
• We found a purchaser who bought the publishing business for sufficient to repay the Bank borrowing completely together with some of Elaine’s personal debts.
• With no debt and only one business to run, Elaine declined the investor offer and returned the marketing business to profit on her own.