Writing for Money

I was home-schooled as a writer.

Oh, I learned sentence and paragraph structure, parts of speech, and vocabulary in those formative years at Melrose (MA) High School, but the real test of learning was in the doing. And the doing was inspired by money: ten cents a column inch in the weekly Melrose Free Press , occasionally fifty cents an inch in the Boston Globe and the Boston Herald.

As the Sports Editor for the Free Press during my junior and senior years in high school, I filled the page. Football, hockey, basketball, baseball, cross-country, track and field – I covered them all. Even the few (at that time) girls’ sports – field hockey, basketball, and softball – were worthy subjects at ten cents an inch. Nine columns by 32″ less the margins, the photos, and the ads. With a full sports schedule, I could make the then-princely sum of $20 in a good week.

But that was a lot of words, often 4-5,000 – or 12-15 pages of double-spaced, typewritten copy, due Monday morning. Every week. Before word processing. Before I even knew how to type.

So it was Dad to the rescue. Every Sunday afternoon (pre-NFL obsession), I’d churn out the handwritten copy and every Sunday night he’d set up the Smith-Corona on the dining room table and type it all up. But between my pencil copy and his final product, an amazing transformation occurred. My dad, a dedicated linguist, would sit me down at the table and, line by line, we’d edit my draft. Clichés? Gone. Split infinitives? Gone. Multiple use of the same word? Come up with a synonym.

More importantly (as it turned out) – all those game stats? Put them in a side bar for the statisticians. Weave them into the main article only as needed to make your point.

A year-and-a-half and well over 100,000 words later, I had learned how to type (most useful high school course ever), and I had learned how to write (only one of many lasting memories of activity at our dining room table). And Dad could retire to read the Sunday papers on Sunday, for a change.

I relied on that training last week as I developed a script on short notice for one of my clients for a visit with his banker. We had just gotten word that the bank was intending to move our loan to the “work-out” group, despite the fact that the company’s major problems were six months behind them and the future was promising. In a 5:00 p.m. memo, I gave my client the following homework for his meeting (I had an equally critical prior commitment with another client) the next morning:

Let me give you the benefit of my experience with work-outs:

  1. The Bank does not want to put you under, especially since you’re not in deep default, as most of their work-out clients are.
  1. They know that it’s not a great financing environment out there; they’re going to have to cut you some slack with the time horizon to find a new banking home. They probably won’t offer that up front, but if in a month or six weeks you’re reporting a sincere and dedicated search effort, they will parcel out extra time, little by little.
  1. You should certainly share the latest financial statements and cite and recite the fact that you’ve been profitable for each of the last six months, that you have made the turnaround, that you have lined up new subordinate debt, and that your major impediment is the length of the finance cycle given your (temporary, we hope) lack of vendor credit. Then show them the cash flow summary that demonstrates this.
  1. Regarding alternative financing sources, you can say that you have already made some preliminary inquiries, and you’re optimistic that given a little time you will find the same level of funding that the Bank has offered. Then point out the positive cash position that we have projected going forward.
  1. Keep in mind that the bankers’ mission tomorrow is to create urgency in you, so they may press hard. Don’t overreact to this. Respond calmly. Let them know that you’re on track, that your financial statements are timely, profitable, and accurate, and that you will have updated projections with August results by the end of next week, and then share your backlog stats, which indicate that revenues will be at budget again in September.
  1. Be positive. Reassure them that things are under control, that the new management team is excellent, and that the market is solid. Don’t oversell – after all, they’ll be all over the numbers, and the numbers will back you up. Let them know that you’re challenged to prove to them that they’re making a mistake in calling the loan, and that even while you’re looking for a take-out loan, you’re going to be trying to win them back to you. And then ask what you need to do to accomplish that.
  1. No matter how this comes out tomorrow, given the current banking environment we should consider supplementing my services with those of a specialist in bank work-outs. Through what could be a long process to find a successor funding source, we may need someone who can push back hard and keep the bank at bay, someone who has operated from the banking side and knows where the pressure points are. So don’t sign anything yet.

Follow-up: After a convincing presentation by my client and his controller, the bankers agreed that they had much more challenging situations to worry about, but they were nevertheless trying to trim their portfolio. Which is how it happens that I’m writing for money again, for all you bankers out there.

Alligator Bites

For those (many) readers who are not into the numbers, financial management has its share of primarily-qualitative aspects. An example, which I penned – whoops, keyboarded – is not just for the bankers out there. As I take the lead in hiring my full-time successor for another client, I’m including it here in full in hopes that readers will pass it along to strong senior financial managers of their acquaintance:

Vice President, Finance and Administration

This is a new executive position reporting to the CEO. We are a profitable, well-managed, steadily growing analytical market research firm located in Boston. From a strong U.S. foundation, we are beginning to build a presence internationally to accelerate our growth.

We seek an experienced strategic financial executive with proven capability both as a manager and as a hands-on analyst. The new VP will provide department heads with the tools and know-how to manage for a stronger bottom line, identify profitable opportunities, and develop motivating metrics for the company and individual business units. He or she will meet regularly with senior staff and department heads to keep them informed as well as participate in strategic planning and the establishment of long term priorities. This necessarily means that he or she will become intimately acquainted with our state-of-the-art integrated financial management and information system, oversee the production of streamlined, informative financial statements, and develop multi-level real-time project analytics while becoming the go-to resource for both tactical and strategic financial information.

To complement the internal focus, we anticipate that the new VP will have the experience to help us to select and pursue the right paths to profitable growth, whether by further international expansion, by acquisition, and/or by adding capabilities internally. These decisions will be made in the context of our five-year growth and development plan. This new VP will play a key executive role with the expectation that he or she will lead the evaluation process as we consider alternatives toward our next possible transition.

Well-qualified candidates will have a track record of managerial success in the service or consulting industry, complete understanding of accounting and finance, excellent abilities in information technology, well-developed presentation skills, and proven leadership capacity. Prior participation in transitions of small-to-mid-sized companies as well as high level knowledge in identifying and negotiating debt and equity financing is essential.

The Company is a 55-employee Sub-Chapter S Corporation with founding partners and a senior staff with ownership interests. The founders are exploring options toward increasing value and considering alternative strategies. The accounting team is headed by a director of finance, with two other full-time accounting staff.

Compensation will be negotiated and includes commensurate benefits and bonus. Candidates should forward resumes in the strictest confidence with a detailed cover letter to bradhowe@finman.com .

Draining the Swamp

A quick way to open the sluice gates:

Companies with QuickBooks can create multi-year actual to budget reports automatically and then export the report to Excel in order to add comments or manipulate data. Just go to the Reports menu, select the Budget sub-menu, and then select the report called Profit & Loss vs. Budget, and press Enter. The report can then be customized for any period you choose, on a monthly or annual basis.

– Contributed by reader Ellen Shoner, VP Finance, Visible Systems Corporation