Portrait: CFMB

In 10 steps out of the crisis — Quick help for strugg­ling compa­nies
Corpo­rate Finance Mittel­stands­be­ra­tung GmbH,
Photo: f.l. Cars­ten Haeming and Joachim von Brock­hausen, Mana­ging Direc­tors of CFMB
The Corona pande­mic has hit German SMEs hard. Nume­rous sectors have had to cont­end with a slump in sales and earnings in recent months. The result has been a devas­ta­ting impact on equity.
Text: Cars­ten Haeming

Accor­ding to a survey by the Asso­cia­tion of German Cham­bers of Indus­try and Commerce, for exam­ple, 40% of the compa­nies they surveyed complai­ned about a decline in their equity. The year 2020 resem­bled an emotio­nal roller coas­ter for most entre­pre­neurs. Despair and hope constantly alter­na­ted. But even months after the outbreak of the crisis, help­less­ness and uncer­tainty are still omni­pre­sent. Many entre­pre­neurs now find it almost impos­si­ble to extri­cate them­sel­ves from the crisis on their own. We at Corpo­rate Finance Mittel­stands­be­ra­tung GmbH (CF-MB) have specia­li­zed in finding custo­mi­zed solu­ti­ons for complex corpo­rate tran­sac­tions. In the follo­wing, we would like to explain how you can master the crisis in ten steps with the help of our consul­ting services.

1. initial meeting and crisis assessment

In a non-binding initial meeting, we get to know each other and discuss the indi­vi­dual impact of the Corona pande­mic on your busi­ness model, your objec­ti­ves, the corner­sto­nes of our coope­ra­tion, and how to proceed. We are aware that speed is of the essence. Saving your busi­ness is our top prio­rity. Due to our hands-on approach, we are able to coor­di­nate a quick appoint­ment after your call and to support you from then on with the full commit­ment of our team.

2. comprehensive analysis of the actual situation of the company

On the basis of your docu­ments, we analyze the situa­tion in which your company finds itself. In doing so, we pay atten­tion to how your busi­ness was doing before the crisis, what factors led to the drop in sales, and analyze which busi­ness areas and products are making or losing you the most money. We also evaluate how long your finan­cial resour­ces will last, assum­ing diffe­rent scenarios.

3. evaluate cost savings

An important part of mana­ging any crisis situa­tion is to iden­tify cost savings oppor­tu­ni­ties. This does not always have to involve laying off employees. Redu­cing fixed costs, stream­li­ning proces­ses, or renego­tia­ting exis­ting contracts can also lead to success. Crea­ti­vity and expe­ri­ence are important key words when plan­ning cost savings.

4. creation of integrated financial and liquidity planning

In times of the Corona crisis, liqui­dity ratios are coming to the fore more than ever. Based on your reve­nue and cost posi­ti­ons, we will create a detailed liqui­dity plan to secure short-term opera­tio­nal measu­res as well as an inte­gra­ted plan­ning model that will help you stra­te­gi­cally align your busi­ness and serve as a compass for future decisions.

5. identification of available financing options

Once we have analy­zed your company’s reve­nues and expen­ses and crea­ted a custo­mi­zed plan­ning model based on this analy­sis, the available finan­cing opti­ons can be deter­mi­ned. The first step should be to explore closing the liqui­dity gap by raising addi­tio­nal debt capi­tal or apply­ing for Corona relief funds. Other attrac­tive opti­ons include facto­ring or asset-based finance, for example.

6. consideration of raising new capital or a distress sale.

If the clas­sic means of finan­cing have been exhaus­ted, the possi­bi­lity of taking on an equity inves­tor should also be exami­ned. Properly applied, this measure even repres­ents the ideal way to over­come a crisis in the long term. In addi­tion to capi­tal, a finan­ci­ally strong inves­tor can also contri­bute stra­te­gic resour­ces such as expe­ri­ence or cont­acts. Moreo­ver, taking on a new inves­tor sends a strong signal to the banks that an ailing company can get back on the road to success. In parti­cu­lar, if the finan­cial analy­sis has shown that the busi­ness has profound liqui­dity problems, the share­hol­ders can still prevent the worst by initia­ting a distress sale in good time.

7. determination of the appropriate strategic approach

Every company is indi­vi­dual. Conse­quently, every stra­tegy should also be tailor-made. CF-MB’s consul­ting concept has always been based on this approach. We ther­e­fore always make our recom­men­da­ti­ons for action in line with your indi­vi­dual liqui­dity situa­tion, the age struc­ture of the share­hol­der base and the future pros­pects of the corpo­rate sector. In coope­ra­tion with you, we discuss the next steps and plan the next course of action.

8. development of an individual crisis concept

The result of these stra­te­gic conside­ra­ti­ons and the previously conduc­ted analy­ses is a crisis concept tail­o­red to your needs. Our aim is to ensure that you either emerge stron­ger from the crisis or, in the event of a (partial) sale, receive a fair price for your life’s work.

9. preparation of essential marketing documents for approaching investors

If your target or liqui­dity situa­tion requi­res the sale of the company or the raising of an equity inves­tor, you need a convin­cing selling story to attract capi­tal provi­ders. At the same time, it is important to main­tain discre­tion and not to disc­lose too much sensi­tive infor­ma­tion. In this respect, we at CF-MB are at your side with our expe­ri­ence from more than 100 successfully comple­ted transactions.

10. Implementation of the crisis concept

No matter which way out of the crisis you choose — be it a distress sale, taking on an equity inves­tor, or fight­ing the crisis on your own by exhaus­ting all liqui­dity-boos­ting means — with CF-MB you have an expe­ri­en­ced part­ner who will advise you on all corpo­rate finance issues in a profes­sio­nal and custo­mi­zed manner. Toge­ther, we will imple­ment your indi­vi­dual crisis concept and ensure that you over­come the Corona crisis and get back on track for success.

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