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"I retained 80% ownership, we immediately had positive equity..."
"When we were introduced to Cincinnati Capital Corporation we had just completed liquidating a company we had acquired just one-year earlier. We lost about $4MM on the transaction. We were a $7MM company with $8MM of debt. Our negative equity was over $3MM. Within a year Cincinnati Capital negotiated a workout plan with our unsecured creditors, re-negotiated our senior loan agreements and merged our company with our biggest competitor. I retained 80% ownership, we immediately had positive equity and our business had grown to $12MM. Two years later we sold the entire operation to a publicly held company."
-GHH (Client)
"When we were introduced to Cincinnati Capital Corporation we had just completed liquidating a company we had acquired just one-year earlier. We lost about $4MM on the transaction. We were a $7MM company with $8MM of debt. Our negative equity was over $3MM. Within a year Cincinnati Capital negotiated a workout plan with our unsecured creditors, re-negotiated our senior loan agreements and merged our company with our biggest competitor. I retained 80% ownership, we immediately had positive equity and our business had grown to $12MM. Two years later we sold the entire operation to a publicly held company."
-GHH (Client)
Turnaround Workouts
Objective
Entrepreneurs facing a turnaround have two alternatives: 1) Rehabilitation or, 2) Liquidation (bankruptcy). Cincinnati Capital prefers to Rehabilitate. In order to do so, you should consider the following:
- Getting Help: Your business is in trouble, your optimism as an entrepreneur may be a virtue that stands in the way of a successful turnaround.
- Intervening Quickly: Failure to act immediately drastically reduces your options and drastically reduces the chances of success.
- Preserving Alternatives: Don't panic and make independent decisions. The more options you have for managing a crisis the higher the likelihood a turnaround will succeed.
- Getting A Realistic Appraisal: The saying "you are so far into the forest you can't see through the trees" is most often the case. You need an outside review from someone who will probably tell you a lot of things you would prefer not to hear.
- Developing a Plan: The realistic appraisal will serve as the platform for the Turnaround Plan. It will include a capitalization plan, financial planning, operational planning, administrative planning, sales and marketing planning. =
Turnaround Implementation
Cincinnati Capital delivers an independent and objective review of your business. Our singular focus is to effectuate a return to profitability or higher profitability. Some of our activities will include:
- Conducting a thorough review of every aspect of your business.
- In a turnaround the most important factor or rule is "Cash is King". Therefore, we effect changes to return the business to IMMEDIATE "cash flow positive".
- Identifying non-profitable products or services responsible for creating losses or problems.
- Identifying operational issues that negatively impact profitability.
- Scrutinizing every asset on the Balance Sheet in order to maximize its value and/or means by which to maximize value.
- Identifying non-critical assets that could be liquidated, leased or turned into cash.
- Re-negotiating terms with senior / secured debt holders and/or unsecured creditors.
- Refinancing or recapitalize the business.
- Building pro-forma financials and cash flow statements that benchmark operational improvements.
