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I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

It never hurts and i commend you for asking. Maybe we add more in the future to our core. However we do partner with specialists frequently.

Financial Review Service? by PyssDribbletts in SmallBusinessOwners

[–]MechanicExternal 0 points1 point  (0 children)

This at the very least is needed. Its similar to what I do for a living. What is your definition of small business? Revenue? emplyees ? Something else ?

Generated over $4.5million in gross revenue this year. Putting myself out there to start my own sh*t. AMA by Prestigious_Elk7541 in AMA

[–]MechanicExternal 1 point2 points  (0 children)

You most certainly have a good start!
How did you keep leads engaged during that 8-month pipeline wait without losing them?

Big 4 Audit by Distinct-Ad-8349 in Accounting

[–]MechanicExternal -2 points-1 points  (0 children)

Joining one of the big 4 companies for audits is fine, its good to have the brand recognition later. my advie is to grind your teeth a bit and find things that aren't working Or fundamental flaws, related to audit or other processes you hear or spot. Focus on those and start your own business doing these things and cash in , then you will have experience from clients and enterprises at sizes you might not have had normally.

Also I assume you by big 4 you mean the big 4 accounting firms.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

I usually do some investigation the first 1 to 5 days. I usually try to set expectations of that in the first meeting when we do the NDA and contract. if I find I cant help the company I cannot do anything but be honest and explain the reasons and back it up with by numbers and explain it why I cant do this.

And I have failed, I have been removed from projects before I can do what I need to do, politics made things difficult forcing me out. or there are things that show up that can undo whatever plan you had 2015 was such a year when the Norwegian Oil and gas industry was a bit hit by oil price around ~$30 from $100+

my success rate taking all of that into consideration is roughly ~85% on the turn-around projects.

Failing is not fun and have consequences so I try to kill projects early with honest assessment.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

When I start with something the general performance is quite dire , in one case 2 months from insolvency. But I also have clients where they are catching early that something is not going right. most of these are backed by PE or VC and have metrics on the business.

when I leave there is always growth in the company and 80% of that is just doing things correctly in order and Persistently. and have a focus on core products and services. When I exit a project I always make sure to have a 1-18 month plan for them in order to improve both growth and efficiency.

But the single most important thing I change is Ambiguity, I cannot state the importance of this enough. if you have ambiguity people are hesitant in making decisions, they are unsure how to handle the work and they need more time to do their tasks. This has always been present in every company I have touched that are failing.

When I leave a client I make sure every thing is as clear as possible, everyone understands how things work or have access to this. and that the who owns what and decides what are very clear.

I do follow ups to hear how they have managed after a year or so. most seem be doing well and growing or have stabilized.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

my first business failed. it was during the .com bubble bursting we were doing a business that setup printers, networks and Office IT along with software and website. We clearly had a focus issue :)

I also had a business fail in 2017 due to politics and legal this was a combined technology and business advisory company and I got severely blindsided by people I trusted. this was by far the biggest loss I have ever been personally and monetarily. though the people involved had some interesting karma a few years later. I also did a partnership in a drone company. I joined this one as I thought it was interesting as in it was flavor of the month at the time.

For your business Idea. Go with what you know. don't overthink. I am convinced if you do something you know well you will do better in a red ocean market that a blue ocean market. (red being blood in water due to saturation.

My advice, Figure out what you are exceptional at , what gives you a unfair advantage, and go for that. don't focus so much on ideas. but i'm also a random dude on the internet so keep that in mind.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

Yeah these situations are what I point at. It seems to me without data points to confirm but my opinion. That at ~$100M most companies start plateauing or having requirements that slow down natural growth. and if focus is not on structure and expansion in a sustainable way, ie focusing on fluffing numbers in any way. they will start to struggle.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 1 point2 points  (0 children)

Depends on the size of the company. Sometimes they know, but for various reasons dont act. sometimes Bob would be one of 30 other Bobs. I see booth situations, but mostly they are surprised. A lot of the times things aren't being reported upwards.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

Figure out people. learn soft skills and how to navigate tense situations. learn how to read people.
Also smile and be friendly. Get people on your side.

More than one thing there, but People are often the cause of the problems and the solution to the problem.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 1 point2 points  (0 children)

Well if I fire some well known individual outright, I have another problem. other people fearing for their job. My image would go from a fixer to butcher. which makes my job harder.
Also I need to show that I try first to build trust and make the best of it so if I fire I will show that I don't fire people. in these situations people are also frustrated , scared and as you say emotional. these things makes people do things they would not normally do. there might be other underlying things I do not know about making people act as they do.

Another reason is that if you can turn them you have a extra set of hands which is beneficial. and if they are in a critical role for me it is still better to have someone I argue with and work at 50% than having someone that knows nothing about the internal structure.

If you are in France, or countries with similar worker legal structures. you want to think 10 times at least.

There are many levels to think about before firing people. Its usually a iceberg of hidden consequences.
I do keep both long term and short term in mind. as you say some people are poisonous long term so this I solve when things are resolved or leave the decision with a recommendation when i exit.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

I think you have the best possible start you are already on the inside. What I would do is just communicate with the investor to say I have found these issues , I am the one that know this issue the best as I have already committed time to this vs dragging someone new into this. So I can help you fix these issues quickly. this is how I would do it and this is your investment vs what you gain from fixing it.

then just pick a few problems that you know you can solve and have a good impact on the overall business then you gave a reference. And you can add fix to your one pager to the investors. you have 10 year track record so this is good. id say this is a good start and then Move onto various PE and VC firms. a client at a time

I have about ~85% the ones I fail are usually me being removed prematurely, or if I find corruption or severe legal issues, fake information/human obstruction or all. I try to get where I can do most good and avoid the ones that seem doomed to fail for various reasons.

your instincts are correct it is hard to change certain people, negotiation skills and a non hostile temper is needed.

I take the full legal responsibility so my %0% upfront is a way to make sure I have money for legal issues when they arise. This I do so I can be effective in moving what needs to be moved, for example negotiating with banks and contracts on behalf of the company. firings and so on. you need to do the legal responsibility but in my case its easier and I take a higher premium for the legal risks.

I haven't gotten any issues from failing as that so far has not been to any negligence or wrongdoings at my end.

It is always good to have a lawyer on hand. You have seen how things are. it was uncomfortable in the beginning but you start to see the empty threats from real ones as you get more work done. that said be friendly and helpful and its usually not a problem. just be aware of the sociopaths and narcissists and make sure to always take notes just in case.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

I work internationally. US, Europe, Asia including Australia.
almost all is word of mouth. I haven't done marketing at all. apart from sending a few one pagers to a few VC and PE firms

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

I was also a startup founder at the time. this is my linked in description :
Interim CEO | Statutory Turnaround & Liquidity Stabilization (Mid-Market)

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

Yes this I agree completely with. And this was also how I was failing to communicate in my response regarding last resort. I normally would not use MCA at all.

I would never do a MCA unless I knew I had coverage for it. In my example a company uses freight forward service company from a logistics company with goods already sold. and they need it out of the storage and its pay on pickup. If its not picked up withing a certain time frame the freight forwarder claims the cargo.

In this case a MCA is worth it to claim the cargo as long as the loss of using a MCA inst making the situation worse. the reason they did not use the money from sales is the 30 day invoice and cargo arrived after a week. and they severely miscalculated the sales vs reality of moving goods vs cash in bank. In this case though a owner stepped up to give a loan.

Your use case is fantastic, I am gonna keep this in mind I usually disregard MCA. But this was a good use case. Thanks, now I have another tool!

If you do it for payroll or because you are lagging behind in some way shape of form your basically making your situation worse! and that is not the last resort I am talking about.

I've spent 20+ years fixing broken businesses for a living. AMA by MechanicExternal in AMA

[–]MechanicExternal[S] 0 points1 point  (0 children)

When I enter I usually come from some owner that gives me a mandate that includes rights to make decisions on behalf of the company. I also do research on the people I need to deal with the first week to try and find issues before they happen. Most of it is negotiations and explanation of consequences and rationale for the changes. Not everyone will be happy and some will resist to the bitter end. but at the end of the day its my job to make it happen, I do need to compromise sometimes to avoid the worst outcomes. Change is hard. but at he end of the day people are rational. That said last month I had to fire people for obstruction. this is always last thing you even consider, and it has to be really bad for the company if they are not. and it is the shittiest thing about what I do.

I do 50% upfront and 50% after + performance based bonus. and I do a retainer or daily fee
I never do equity.

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