5 Areas That May Need Restructuring

Does your company need a restructuring?

Before you answer, “No, we don’t need a restructuring”, let’s think about this.  What is Restructuring?  Yes, it can be a bankruptcy restructuring, both financially and operationally.  But truly ALL BUSINESSES at one point or another need restructuring, or if you prefer, process refinement.

Think of a high growth company.  Now at $25 million in revenue, can they use the same business processes that they used as a $5 million company?  Or like the lab business we just finished, it was a $30 million company and now with reimbursement changes it is a $12 million company.  Can they run the business the same way at $12 million as they did at $30 million?

Of course not.

We suggest that there are at least 5 areas that management needs to consider restructuring.

1. Revenue Cycle Management

The process of completing an order, billing and then collecting the receivable will absolutely change over time.  Often different systems come together to produce a bill.  In the lab business, for instance, there is a lab information system that receives information from the lab equipment and transmits certain data to the billing company. 

Operating Plan to Turn Around Lab Company

Our latest assignment is to provide strategic consulting services to a lab company doing business nationwide.  The lab industry has changed drastically in recent years, resulting in substantially lower reimbursements and increased regulatory pressures.

These industry circumstances has caused this lab company to shrink down to about a $12 million run rate, running at about breakeven on an EBITDA basis.

The CEO retained us to examine his operations and financials.  Employees knew that I’d been retained to help the CEO and an am independent third-party advisor.  We have spent the last several weeks talking and drilling down to the fundamentals of the business with all business department heads, assisting in a potential acquisition and developing an operating plan to improve operations and profitability.

This industry reminds me of the home health business back in 1998-2000.  Reimbursement changes from Medicare caused about 1/3 of all home health businesses to close.  The other 2/3rds held on but were badly damaged.

Today the lab business is dominated by Lab Corp & Quest.  Most smaller  labs have closed, or been acquired, or are struggling to find significance within this huge industry.

Mr. Villwock is working with this company’s CEO to become one of the survivors in this industry with the goal of transforming the company into a nicely profitable $25-30 million business in the next two to three years.

Are You a Lonely CEO?

No, I’m not asking for a date.  But it’s a fact … being a CEO can be a very lonely place to be.

Most CEO’s think it’s all up to them.  Live.  Die.  On their shoulders.  All on your shoulders.

It doesn’t have to be that way.

I partner with CEOs to help them see their company in a new light — to find growth avenues they haven’t considered — to be a sounding board for good ideas, and for bad — to help transform the financial operations — to create a professional financial and operational presentation which attracts banks and investors.

Check out my video on how working with Medway Air Ambulance allowed that company’s value to go from $8 million to $21 million in just two years.  Founder/CEO sold 80% of the business and ended up with over 5x the after tax cash as he would have if had sold the business at the lower valuation.

I’m looking to partner with the CEO.  If you would like to discuss your company, either email me at Jeff@JeffVillwock.com, or give me a call at (678) 540-1300×1.


Baltimore Affordable Housing

I’m pleased to announce that C. Anthony Mitchell and I have created Community Redevelopment Fund, Inc. which will be the general partner and managing member of entities capitalized to purchase, renovate and resell affordable housing in Baltimore.

Anthony came to me with this idea about six months ago. Through some of his friends in the Baltimore area, he was introduced to several people and organizations that focus on providing affordable housing in older inner city neighborhoods. White flight in the 1950’s and 1960’s left these areas in poverty with vacant homes, rampant crime and drug traffic. However in Baltimore like so many other cities across the country, these inner city neighborhoods have begun a come back. We intend to help reform these neighborhoods by purchasing vacant homes, fully renovating the homes and reselling the homes. Buyers are largely government subsidized first time homeowners who can qualify for mortgages from traditional lenders.

We have just signed a contract to purchase our fifth home in the 4×4 neighborhood in east Baltimore. Our first home to be totally renovated should be ready next week for final inspection and a sale in early August. We have raised sufficient capital to purchase two homes per month,

How to Raise Capital

We have just released our new 51 page e-book to help CEOs to understand exactly how to raise capital in today’s world.

The book chapter headings pretty much tell the story about what’s included:

  • The Process of Raising Capital
  • Create the Financial Plan
  • Create the Operating Plan
  • Determine the Amount of Capital Needed
  • Determine the Terms of the Capital
  • Determine Type of Offering
  • Write the PPM
  • Subscription Documents
  • Escrow Agent
  • Your Investing Audience
  • Create your Investor Presentation
  • Create your Marketing Plan
  • Execute & Close the Offering

This book is a gift from us — you can get it here.  We are also making available a complementary One-Hour Consulting session for CEOs who want to raise capital.

Why would I do this?

We offer consulting services to businesses like yours and I know that some percentage of the executives we help with our Special Report and One-Hour Consulting session will end up as our clients.

We want to be clear —

Joined Lanier Securities LLC as President/CEO

Jeff Villwock announced that he has joined Lanier Securities LLC as its President & CEO.  Lanier will privately place debt and equity securities through the direct solicitation of investors and provide investment banking services including M&A and corporate advisory services.   We intend to provide alternative investment products to individual investors through direct investment into companies and by marketing funds which will provide investors diversity and high yield current rates of return.

Lanier Securities is in the process filing a New Membership Application for FINRA’s approval to operate as a licensed broker/dealer.

This is a new era of capital formation in the US.  The JOBS act gives smaller companies a new opportunity to be properly capitalized.  We will use our experience to find good companies that deserve to be well capitalized, and then work with these companies through their life cycle.  It is our goal to become a firm known for raising capital for deserving private companies and assisting those companies to create value for shareholders.

This is an exciting time for capital formation in the USA and I believe we have an opportunity to make a meaningful difference for companies seeking capital and for the investors that wish to invest.