How to save a business in crisis!

We got a phone call from a manufacturing business on a Wednesday afternoon with the message – The bailiffs ARE COMING! By Monday afternoon, we had put court protection in place. The court protection stopped the bailiffs in their tracks and bought the company 30 days in which to demonstrate to their creditors that the business was viable and could paul reverepay the somewhat overwhelming debt.

This business was viable, our analysis showed, because it had purchase orders in the pipeline. The orders had been delayed however due to circumstances beyond the company’s control. This familiar story had created the cash crunch and hence the crisis.

But the reality was that the company had narrowly avoided their creditor crisis for over a year by juggling the cash and making last minute payments. Now all the problems crystalised into one crisis. This was the perfect debt storm.

First we created a debt restructuring plan. To satisfy the courts, in 30 days the company must produce a credible plan to convince creditors that it can pay its bills in full or in part.  The payment offered to creditors is based upon the ability to pay. But some creditors are fully secured with asset loans or leases. They expect to be paid as agreed or they can exercise their prerogative and repossess equipment. Canada Revenue Agency is a preferred and dangerous creditor especially with regard to payroll remittances.  They demand to be paid within the first year no matter what the terms offered to other creditors.

The hardship really falls on the unsecured creditors. This usually means suppliers and can mean bank loans that are not personally guaranteed.

The company, through its intermediaries and the court, made an offer to the creditors based upon ability to pay. In this instance it was 100 cents on the dollar but paid over 36 months. And, oh yes, interest charges stopped.  In many prior instances of this type of agreement with the creditors, the debt was negotiated down to levels that the company could tolerate. Many deals have been struck at 35 cents on the dollar.

But is this the right way to help a company? Faced with insurmountable debt, a company has no operating room, no credit and is in serious danger that any minor bump in the road will send it careening off the edge. Just think of General Motors. And many companies have accumulated huge amounts of debt during this recession – loans  from banks, loans from government, suppliers unpaid, Revenue Canada remittances, unpaid taxes. Far too many owners also borrowed heavily from their own resources (house and credit cards) to keep the company afloat.

So if the company gets no help, it disappears, taking jobs and family assets with it.

But a bout of debt relief is not a solution for long term problems. Typically the company has seen falling sales and has lost the art of managing the company. In order to make this succeed, the marketing and sales have to be completely re-worked, pricing and costs have to be addressed, and most of all, the manager or owner needs a set of metrics in order to know when the business is on track.

If you can’t fix sales, a financial turnaround just doesn’t work. If you only fix the sales and marketing, the finances can pull down a very busy and otherwise profitable company.

How to Borrow Money and Build Your Business

borrowing cash to save your business.

Turn your business around with the right borrowing strategy

The bank manager just phoned and asked for full and immediate repayment of the line of credit because the latest, (and they were late!), financial statements showed continuing losses and falling sales. The company’s assets are eroding fast and the bank wants its money back while it can.

Now you need to find money. How will you do that?

The following 5 points illustrate what a potential lender sees and how to improve your chances.

You are one of thousands lining up at his door to ask for money for your faltering business. So you must stand out. Lenders do not share your enthusiasm for your business. Every borrower makes unbelievable promises just to get that much needed cheque. The business owner has doubtful credibility because the business is in trouble and the owner is always to blame.

  1. You need a plan.  A written business plan, in order to be believable. You will need a business plan of at least 25 pages detailing your entire idea of how you will make the business work again. No false promises please – no lender will be interested in profit or sales claims that cannot be proven.

Lenders have no interest in a plan that merely returns a business to “normal”. Normal led to trouble once and now a radical change is needed.

The best radical change will be to illustrate a way to improve the business by a multiple (2 times or 3 times) and not a percentage.

  1. Business Turnaround – If you can turnaround your business, what is the big upside that shows a substantial increase in profits?  Will it result in more cash, more assets, no debt? How long will it take?

If the lender hands over a cheque:

  • How will you spend it?
  •  Will you take the cash and run?
  • Will you repay your mother-in-law’s loan?
  • Will the money be spent on things that will have an immediate return on the investment?
  • Or are you asking the lender to share in the risk and debt?
  1. Detail the use of the funds. Are you buying newer machinery? Investing in a new product line? Lenders have no interest in buying other people’s debt, so the debt will remain.

Handing over a cheque is not the problem for a lender. After all, their purpose is to get money out and working.

  • But how will they get the money back?
  •  Have you ever given credit (or made a cash loan) to someone and had load of trouble getting it back, writing off the interest in the end and feeling thankful that you got the original money back?
  1. Detail the exit for your lender. Give short time lines of under 3 years for return of capital. If you expect your lender to act like a bank and stay with you with lines of credit for the next 48 years, then go to a bank. Other lenders need to know how and when they will get their money back.
  • The lender wants to know what you are offering in return for the loan.
  • How is it secured?
  • Your home?
  • Shares in a stumbling  company?
  • Are you willing to give up control for a period of time?
  1. Be prepared and realistic in your offer to lenders.   Detail the security offered and what the asset is worth today and will be worth in 3 years.

There are no guarantees in the lending world that your request will meet with success. If you have by luck chosen a lender who understands your industry and you have a believable plan, you might just leave with a cheque.

At Floodlight Business Solutions we understand what it takes to convince a lender. Have you got a decent business that is in temporary trouble?

Give us a call to discuss your business turnaround strategies and we can help you Build Your Business.

Article written by Andrew Gregson and Donald Robichaud

Have you bitten off more that your business can chew for 2013?

Restructuring your Corporate Credit with a Business Turnaround 

Have you bitten of more that you can chew?

Debt and its management are at the core of a financial restructuring process for your business.

In a typical business turnaround, it is the debt to suppliers, landlords and the government that has become unmanageable.

Some of the symptoms are:

  • collectors are calling daily
  • credit accounts are frozen awaiting payment
  • threats are being made
  • bailiffs and court documents arrive
  • bank accounts are seized.

In our experience, the business owner has already unsuccessfully sought solutions. The visit to the bank, sweaty palms clutching the company financials, ended badly with the bank saying no to a refinance, consolidation, further loans or extensions.

The owner’s house was mortgaged to the hilt in the last few years. Personal credit has been used up and the credit cards are now maxed out. Friends and family have already been tapped on the shoulder for a loan. Factoring of the receivables yielded enough cash to continue for another 2 months. A lease back of the company equipment produced enough to buy materials for another month.

There is nowhere else to turn.

At this point the company is hollowed out. A glance at the balance sheet would show no value. The owner’s credit and company credit are in the tank. The company is technically bankrupt. Even at the Fiscal Cliff there is still hope.

Dire situation: What do you do?

A circumstance like this requires a third party intervention to solve the problems. Caught early enough, the issues can be worked around. Caught too late, it is painful and expensive because the courts might get involved.

Canada is blessed with probably the most enlightened legislation on the planet to allow companies to seek a dignified exit or to buy the time to get back on track.

At Floodlight we have the 50 years of experience and know how to use all available tools to salvage the company and pull it back from the brink. Floodlight will help to illuminate the dark corners of your business and to expose things that the business owners don’t always look at closely enough. Our goal is to help the business owner maximize results and achieve a business turnaround.

Floodlight first assesses the situation: which creditors are most dangerous; who owns the debt; which debt is secured and which not secured. Then we move to protect all possible assets.

Then Floodlight assembles a written and detailed plan. This plan is built to convince the creditors that working with the company instead of torpedoing it is in their best interests.

Not all creditors can be convinced but the presence of third party of professionals is often enough to persuade them to give it a try.

Floodlight deploys a 3 pronged approach to the plan: create a time out with the creditors, re focus the marketing of the company to increase sales and work with the owners to build strategic plans for growth.

On the financial side the plan is first to work on cash only which usually involves teaching the company and owners to operate on C.O.D.   Then a deal is struck with the creditors whereby the debt is repaid in a structured way over a period of time according to the capacity of the company to pay. In this way the debt is reduced to manageable levels.

Meanwhile the marketing arm of Floodlight raises the profile of the company to increase sales, often re-defining the target markets and finding new strategic partners.

At the same time we meet with the business owner’s weekly working on the business to refine management goals and apply new business strategies.

This process can take from 90 to 180 days to develop and 12 to 18 months to see through to a successful conclusion.

What our clients like best is that they have regained their self esteem and with a new confidence can begin to build their business with a strong foundation for growth.


When we first met Floodlight we were floundering in a financial quagmire, not knowing which way to turn or who to call on for help. 

We had approached one financial institution after another in an attempt to secure debt amalgamation but we were refused. 

Floodlight has extensive back ground in financial and business matters.  Upon meeting with Floodlight we immediately felt at ease with their approachable and helpful manner. 

Although we met with them several times, they never once made us feel ill at ease regarding our financial situation.  They showed empathy and were very pragmatic in outlining a financial path for our consideration. 

We feel very comfortable in recommending Andrew Gregson and Donald Robichaud to anyone who is seeking sound, well thought-out, financial and business advice. 

Neil and Sandra 

Article written by Andrew Gregson and Donald Robichaud



Price, choice and buyer psychology: how understanding these factors can increase your sales.

Price, choice and buyer psychology: how understanding these factors can increase your sales.

In a Ted talk ( a few years ago (, Tipping Point author Malcolm Gladwell spoke about the role of choice in buying decisions. When discussing pasta sauce, the manufacturer wanted originally to know what the customer wanted. From that information they would craft a product to fit customer taste. Was the customer demanding chunky, spicy or smooth pasta sauce? Market research came back with a carefully crafted statistical analysis showing that most people wanted smooth. Gladwell disagreed with the conclusion.

By offering only smooth pasta sauce, they would have missed market niches looking for chunky and spicy with a consequent loss of market share in pasta sauces. So the statistical answer was correct but insufficient for a business decision.

Continue reading


Always when I begin my speeches or my workshops, I tell the participants that I cannot instruct them to price their widget at $4.95. Rather, I plan to teach my audience advanced ways of thinking about pricing and several methodologies to help them make informed and intelligent pricing decisions. 

Don’t follow the crowd!

For most small businesses, the everyday pricing regime starts with checking the competition’s rates and prices, and then following the crowd. This is even the recommended strategy in many popular guides for small business.

During the days of prohibition, 25 of Chicago’s top bootleggers were rounded up in a surprise raid. During their arraignment, the judge asked the usual questions, including the occupation of each suspect. The first twenty-four were all engaged in the same activity. Each claimed to be a realtor. “And, who are you?” the judge asked the last prisoner. “Your honour, I’m a bootlegger,” he said. Surprised, the judge laughed and asked,” How’s business?” “It would be better”, he answered, ‘if there weren’t so many realtors around.”

The upside is that this strategy is simple and easy. You don’t spend all that work, that time or your money to develop a unique selling proposition to command the full value for your services or product and you don’t have to go out of your way to be better than all the rest.

But following the crowd is a lazy strategy that leads to mediocrity.

Money is probably left on the table since the business is now just one in the herd and the product or service is sold at a price which is the average- where half of the competition is losing money. Remember that price is an indicator of quality in many customers’ minds. A standard service at a standard price does not compel a potential customer to buy from you.

Don’t get pushed around by the last customer you served. Being told that a competitor is selling cheaper can panic some business owners. Altering the price can lead to a permanent slide in margins and profits.  

Rewarding the last complaining customer with a  price reduction punishes the good customers who have supported your business by paying the full price willingly and uncomplainingly.

Remember that competing on price alone caters to the worst customers who show no loyalty and will hunt endlessly for the lowest price in town. My suggestion – find a way to make your company stand out and price accordingly.  

Contact Andrew for your next meeting:
Andrew D. Gregson B.A., M.A. M.Sc.(Econ)
101-1735 Dolphin Ave.
Kelowna, BC, Canada V1Y 8A6
toll free:  (888) 959-0752

Profit Making Through Pricing at OUC with Andrew Gregson

Profit Making Through Pricing
When it comes to your business and selling your product, have you ever wondered if there is just a better way of pricing that would allow you to compete better? Learn how to increase sales without dropping your price. Gain detailed analytical solutions needed to transform a humdrum business into a profit making machine.

This workshop will broaden your understanding of true costs, show you how to pre-determine profits and will teach you to price with confidence.

The workshop provides practical planning tools and processes, with case studies and practice sessions designed to enhance your business skills.

Course code: MGR 283, CRN: 80610
Feb. 22 & 24, Tue & Thu, 6 – 9 p.m.
$135 + HST


MISSION impossible: charge more, sell more and increase customer NUMBERS.

A common mistake made by business owners is to assume that their purpose is to set a price for a product rather than for the customer segment. Identical products or services can be sold at lots of different price and profit levels.

In the 1970’s, a Swedish manufacturer of mining equipment, sold worldwide, could not supply a much needed rubber grommet for its hard rock drills. When the situation became desperate, one resourceful area manager went off in search of an adequate replacement, in order to keep the customers’ drills working. After a few enquiries, the area manager was directed to a rubber component manufacturer in Vancouver. When he produced a much worn example of the grommet and asked if they could make this for him, he was astounded to be told that they had, in fact, made the original he had in his hand. He was even more astonished to learn that the over-the-counter retail price to him was less than 10% of the price he would normally have paid the mother company. Based on cost to manufacture, this small item warranted a low price. But in a drilling equipment application the replacement grommet was costly simply because it was a microscopic portion of the total machine price and an even tinier portion of the dollars per hour lost when the grommet failed and the machine stopped producing. Therefore, the price reflected not cost to make, but need in that market segment.

In a more recent example, the price of rare earth metals has risen as China restricts exports. Niobium is essential in every cell phone on the planet but the sharp rise in price has not had any impact on the price of cell phones. This is because only a ¼ of one cent’s worth of niobium is used in each phone. Sellers of niobium, whose customers manufacture cell phones, have vastly increased prices and profits but the price of cell phones has not risen.

Purchasers can and do evaluate your product or service in terms of reputation, durability, reliability, after-market service, freight costs, installation, inconvenience, and payment terms. Your business and your sales offering, needs to address important factors like these, in a way that means something to the customer.  Otherwise price becomes the sole, only and determining factor that makes a customer buy from you instead of the competition.

The following three steps, with accompanying examples, illustrate how to do MISSION IMPOSSIBLE. Every businessman’s dilemma can be overcome using innovative solutions and result in increased sales, increased profits and more customers.

Analyze your customer and press the hot button


In 1954, DuPont introduced a new polyethylene resin used in pipe manufacture. Until that time, all polyethylene pipes had been made from a by-product of off-grade resin.  While the new pipe   looked exactly like pipe made from off-grade resin, it had a longer life than competitive pipe material and could withstand greater pressure.

After the product’s shaky entry into the market, DuPont developed a strong promotional program for the new pipe which communicated its notable benefits. Sales grew strongly despite the fact that extruders sold the pipe for between $9.50 and $13.00 per 100 feet vs. the $5.00 to $7.00 price for pipe made from typical resin. This price ratio, almost 1.9 is greater than the relative “lives” of the pipe would suggest a price imbalance.

But there was a secret in this strategy’s success. In a typical use of this pipe, a farm application, the pipe goes underground. It is clear that if the pipe bursts, it would have to be dug up- a time consuming and expensive chore. The value or utility of the pipe was greater precisely because the salesman focused attention on the pain of having to dig up burst pipes more often than was necessary now that new pipe was available.  The sales programme was successful because it pressed the hot button labelled “dig all day in the cold mud looking for busted pipe”.  At that point, the price difference became irrelevant.

market the BENEFITS not the features.

Unless your customer is an engineer, the latest product specifications are gibberish. Your new resin, new alloy or new gadget must answer the WIFM question if it is to be sold. WIFM = what’s in it for me?

It could be new drill bits with titanium points. They are harder and can drill longer without sharpening. But that has to become a tangible benefit by translating from “longer between sharpenings” to 14% more holes drilled. At that point, the potential user will price out his down time for drill changes and then the cost of re-sharpening. Price has become a secondary issue compared to the cost savings.

before setting price levels, examine the customer perception of what is a cost.


One manufacturer of laboratory instruments was plagued by a high number of very small orders for a limited array of repair parts. On analysis, the product manager found that end users were annoyed at having to place these small orders because the administrative and shipping costs were greater than the parts prices. Furthermore, the manufacturing company was losing money on the parts for the same reason.

Even more costly, customers were upset at the downtime caused by not having the correct and low value parts in stock. A few customers, with a multitude of similar model instruments, seemed capable of keeping the right mix of parts in stock but others, with limited experience, could not develop good inventory rules. To alleviate the problem, the product manager developed repair kits with an assortment of parts and offered them to customers using a wider variety of instruments. The company’s picking costs went down, average invoice value went up, profits went up, shipping costs went down, and customer satisfaction increased because instrument down time was minimised.

There are 3 common threads in all these examples.

In each, someone has done a careful cost benefit analysis from the CUSTOMER POINT OF VIEW. Even if the customer cannot articulate it well, the salesperson painted a vivid picture of the annoyance and costs of repeatedly digging up pipe, idle production because the right repair part had to be ordered, or down time costs whilst changing drill bits.

Secondly, the penalties were identified first, not the price. Price was introduced after the benefit picture had been painted in stark, primary colours

Thirdly, the price matched the customer specific situation and was MORE than would have been invoiced based upon cost and mark-up formulations.

Contact Andrew for your next meeting:
Andrew D. Gregson B.A., M.A. M.Sc.(Econ)
101-1735 Dolphin Ave.
Kelowna, BC, Canada V1Y 8A6
cell: (250) 859-0752
Andrew Gregson has 15 years of experience as a business consultant to small and mid size businesses in Canada, the United States and the Caribbean. To date, Andrew has analyzed and assisted over 130 businesses in the service, wholesale, distribution, manufacturing and logistics sectors.




In a downward trending economy, customers will look for the best bargain and are bold enough to tell you that your price is too high. But keeping prices up while increasing sales is the key to a healthy bottom line. So, how do you achieve both?
Let us assume firstly, that in your sales pitch you have presented the price correctly, stressing the benefits of making this positive buying decision. Let us assume as well that you have conveyed these benefits in a graphic way that painted a compelling picture in the customer’s mind.
But the answer is still, “too much”.
Negotiating to a lower price means rewarding the grinder and effectively punishes that last “good” customer who paid your full price. So, first of all, be prepared to “fire” a customer who wants too much from you for too little.
But here are 4 tips on keeping your price and making it non-negotiable.

1. Humour. In my former business, we had customers who would brandish a clearly marked item, say $5.95, but still ask “what’s my price?” My best sales person typically responded with “Five thousand dollars but with your discount, today it is $5.95”. We never lost a sale with this approach. The laughter cemented a relationship and brought us referrals.

2. Plan B. If the first item has 16 features and is priced at $300.00, then re-direct the customer to a lesser item with only 12 features – pointing out what is being axed – but with a smaller price tag, of course. You are not yielding margin dollars here, just directing the client to a price point he can manage.

3. Be brave. Price is often an indicator of quality. German made cars are not really any more costly to manufacture. Diamonds can be found in the beach gravel in Angola. So their high price must mean more quality for the client, right?

4. Have a clear understanding of what benefit the customer is trying to purchase and direct your sales effort at that point. In 1954 Dupont introduced a new polyethylene resin used in pipe manufacture. Until that time, all polyethylene pipes had been made from an off-grade resin. While pipe produced from the new resin looked exactly like pipe made from off-grade resin, it had a longer life than competitive pipe and could withstand greater pressure. It sold at 1.9 times the price of the original pipe. The secret for success in selling the more expensive pipe was highlighting the costs of digging up burst pipe for replacement.
Be brave. In a sliding market your company must stand out, must be unique and must offer especially desirable benefits for the customer.

And one final word of advice comes from the owner of a Vancouver company who met prior downturns by dropping prices and struggling through with no cash in the bank. During this downturn, they kept prices up, cut costs and had cash enough to buy modern equipment further driving down costs, which generated more cash.

Andrew D. Gregson B.A., M.A. M.Sc.(Econ)
101-1735 Dolphin Ave.
Kelowna, BC, Canada V1Y 8A6
cell: (250) 859-0752


Guest Speaker Andrew Gregson


 Andrew Gregson has 15 years of experience as a business consultant to small and mid size businesses in Canada, the United States and the Caribbean. To date, Andrew has analyzed and assisted over 130 businesses in the service, wholesale, distribution, manufacturing and logistics sectors.

Pricing Examined  This is a downward trending market right now. And it is sometimes difficult to keep prices up. Learn why lowering your prices will not translate into customer loyalty. Have you ever wondered if there is just a better way of pricing that would allow you to compete with the big boys? Would you like to increase sales without dropping the price? How can you become the price leader instead of the price follower in your industry? Do you think you may be leaving money on the table?

 Ticket Prices: $15 each.  Tickets must be purchased in advance.  To purchase your tickets please register below. SEATING IS LIMITED.

 RSVP cutoff is 4:00 pm on Wednesday, October 13th

Date: 10/15/2010
Time: 9:00 AM TO 10:00 AM
Kelowna Chamber of Commerce Boardroom
544 Harvey Avenue
Kelowna, BC V1Y 6C9

Event Location Map

Phone: (250) 861-3627

Learning from the world of art project funding – how price sensitivity is interpreted in a non-commercial world.

Learning from the world of art project funding – how price sensitivity is interpreted in a non-commercial world.

Fund raising on line offers new insights into people’s purchasing habits. This statement is summarised in a recent Economist article ’the micro-price of micro-patronage’ and is supported by evidence provided by, a fund raising site for the projects of  aspiring artists.

You would expect some of the conclusions. Too much choice means that no buying decision is made and the potential donor wanders off.  And you would expect price sensitivity with clearly identifiable price bands each with its own characteristics. Contributions at $5, are considered a donation, plain and simple. Numbers  north of $50 move from being a simple donation to being a purchase of something and the criteria change.

And the research shows that it is best to have a range of prices with some expense options to counter cheaper options. This is similar to the sales process of beginning with the most expensive and feature laden product first, and then dropping features and prices in lock step until the buy decision point is reached.

Finally, at the top end of the scale the “price” begins to bear no relation to the item itself. On offer at Kickstarter at a higher price point was the item PLUS an experience, like dinner with the author or artist.

How does this work for retailers and service providers?

Retailers who clearly understand that a good experience is part of the buying process can thrive. In the 1970’s a scion of the Cooper family opened a ladies clothing store in Guelph, Ontario. His patrons drove 100 miles to visit the store. Why? Because the store was equipped with a play corner to keep the kids quiet while Mummy shopped.  Same goods as other stores, but Mummy shopped there because the buying experience was less stressful and more enjoyable.

Theme restaurants understand this concept. That is the strength of the Macdonald hamburger concept; and the Red Rooster idea.  Service providers with a unique style that gives the customer a good story to tell their friends and family understand this concept.  Lots of plumbers arrive in dirty blue overalls in a filth covered truck and do a great job at a great price. But that is no story. Would you tell your neighbour about it?