Increased funding or loan concessions must be accompanied by basic changes in business activities, organization, and management. The founder should be encouraged to seek solutions within the company and to use outside consultants. The quickest, least expensive route is often to obtain sophisticated, unemotional, temporary outside help. The bank, meanwhile, should develop its own strategies for dealing with the company s problems. The bank and its attorneys should coordinate a workout plan that avoids lender-liability issues.
Turnover is rampant among key employees.
Positions once held by responsible, able, senior personnel are now filled by former lower-level employees. Effective production and financial controls and information systems are lacking. Deliveries and payments to creditors are frequently late. Communication suffers with customers, suppliers or bankers. Senior employees leave to work for direct competitors or create their own competing business sometimes with the help of the company s banker.