Of course, the answer is "it depends."  There are a wide variety of factors that dictate whether or not we work with a company that is either breaking even or losing money.  Here is a quick run-down on some of the factors we (and by corollary, investors) consider:

1.  Is the company salvageable? 

Many companies are just too far gone.  No amount of time, effort, or good intentions are ever going to turn things around.  In those cases its time to develop a plan to close the doors.  We do work with close-outs and liquidations on a retainer basis.  This typically winds of saving the owner from a great amount of stress, and saves money given our experience in this arena.

2.  Is the company worth saving? 

In some cases the company can be saved, but at what cost?  No one is interested in working on a turn-around project without an appreciable ROI for the investor.  If your company can be saved and it will cost $10 million, and the net profit it will generate is $100k per year, then it is time to consider a wind down.

3.  Why is the company in the current position? 

Although this partly speaks to the above issues, at heart is the reason for the current state of disrepair.  We often hear business owners comment "it would be easy for a new owner to make money if they only.... (fill in the blank)."  And of course if it were that easy, then the current owner would have taken those steps.  Being able to identify causal factors for poor performance is key to being able to pitch a business as a potential turn-around candidate.  Hence we look at these factors when deciding whether or not to take on such a project.

Our Fees
Once the above three questions are hashed out, the question becomes "how much does it cost?"  We do not take on turn-around projects on a "contingent" basis.  That is to say we charge an on-going retainer as well as a success fee based on a final sale or investment into the company.  Given the unstable basis of the company, it would be foolish for us to waste valuable resources on such a project.  Granted, this will undoubtedly put a strain on a struggling company, but at the end of the day "you get what you pay for."  Top flight service, advice, and input that a firm like Clear Rock provides will never come free.

If you or someone you are working with are in a distressed situation, or looking to sell a troubled company, please give us a call so that we can discuss how Clear Rock might help improve your odds of survival.