Fiscal Strategies

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Fiscal Strategies, Opportunities, & Transitional Challenges

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Without regard to what business you are in, at some point you will have an unusual or unique challenge or opportunity. It has been our experience that these challenge or opportunities generally falls into one of the general categories noted below. Most businesses contact us after failed attempts to‚ manage‚ business challenges internally, either with individuals who are not skilled or qualified, or with those qualified individuals who are already fully occupied with other aspects of running the business.

Perhaps we can help. We have a proven track record. Although every business is different, a quick review of some of the businesses and transactions we have been involved with will help you know a little more about us, our expertise, and our philosophy.

Fiscal Strategies

A review of the Black Gold Portfolio Companies provide some insight to some of the many capital and financial transactions that we have been involved with over the years, both for our own companies as well as for others.  The day of the friendly banker that handled all of your companies and families’ financial needs are long gone. Companies are exposed today if they have relationships with only one bank or financial institution. Changed financial condition, loan portfolio’s performance, changes in management or board directives, and regulatory influence and requirements have affected almost every financial institution in the country in the last decade, even in those parts of the country that are not as affected as others. This makes for unpredictable, if not unreliable, financial circumstances.

Private equity and even private lending have become common place for small and mid-size businesses that previously had not considered these options. These resources may be the best option available for expansion and acquisition programs, or they may be a backstop that is needed because of operating losses, new bank imposed equity requirements, or because of more conservative working capital  or accounts receivable financing.

The bottom line is this: you don’t need our help with your financing or capital needs if you can do it yourself, or if your traditional means of financing growth, acquisitions, or working capital are working for you. However, if these sources and techniques are not meeting your needs, or if you believe you have a unique opportunity that doesn’t fit the mold of traditional capital or lending sources, we welcome the opportunity to visit with you.

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How we can help

Fiscal Strategies, Opportunities, & Transitional Challenges

Opportunities: Maximizing Outcomes

It has been said that the proverbial ‘chance of a lifetime’ comes along for most businesses about every 10 years on average.  However, the chaos like has happened in our economy lately is creating unprecedented opportunities for some businesses. Small business owners are finding opportunities to make great strides because of gaps left in supply chains, companies that are for sale, vendors that are jettisoning inventory, or a dozen other reasons that are out of the ordinary because of the lender policy changes  and buyer reticence. Competitors are going out of business. Strategic real estate that can help your business can be bought at great prices and great terms if you can get it financed. Businesses are for sale, and the terms that may be acceptable today were unheard of last year.

These are the things we love to be involved with. At our core, we are deal junkies. The art of the deal, the thrill of the chase, and the rush that comes when you close a big deal are what makes us tick. Our experience speaks for our capabilities, but remember two things:

First, most of what we have done for 35 years have been for our own account.  We do deals, structure financing and tax matters, scrutinize financing and operations, and perform due diligence as if we are going to own and operate the business. That is the only way we know to do it. Thinking, acting, and structuring deals for the long haul is quite different than doing it as a consultant or business broker, or even as a legal or accounting professional who look at the business opportunity through different lens than a businessman. All of these have their place and provide valuable services; it’s just not what we do.  We look at it like we are going to own and operate this business with you.

Secondly, notice the diversity of our portfolio and our history. No one can start, own, operate, and sell profitably the diverse array of businesses that we have been involved with over the last 35 years, including us. In every one of our businesses we have teamed up with partners that know THAT business. We have functioned as a principal and as a long-term owner in most all these businesses, but we have done so almost always with an operating partner or industry expert who typically had history in that type business, or in a related business.

We believe this is what makes us uniquely suited to help you with your business needs. Our legacy and our experience is doing the ‘business of business’, which involves the out of the ordinary transactions, opportunities, or problems. This leaves you free to focus your energy and efforts on YOUR business.

How we can help

Fiscal Strategies, Opportunities, & Transitional Challenges

Conceptual image of challenge and mindset

Transitional Challenges

Most business challenges these days typically involve one or more of the following:

  1. Too much debt, and not enough equity (at least according to commercial financial institutions who, through many times no fault of their own, have had the rules changed on them by regulatory agencies).
  2. Falling revenues, margins, sales, or some combination of these, with an inability to correspondingly adjust expenses, debt service, or built up accounts payable.
  3. Order reluctance on behalf of customers.
  4. Loss of talent, or need for skills in new areas not previously considered important.
  5. Tougher collections of accounts receivables, sometimes combined with shrinking working capital and/or receivable financing base.
  6. Lack of new capital for expansion.
  7. Falling commercial real estate valuations and reduced loan to value lending policies on real estate projects, or on real estate that is a significant part of your asset base.
  8. Regulatory issues, unique legal issues that cross over into the business.
  9. Other.

We have not seen two workouts or business problems that are exactly alike, so most issues may fall into the ‘Other’ category.  Thirty different reasons, and all likely needing a different solution. While there is no magic wand, sometimes a fresh look from someone that makes their living finding unconventional solutions to business and capital needs can be of immeasurable value. The inability to ‘see the forest for the trees’ is never as acute as it is when you are immersed in capital challenges or other business problems that are not a part of your historical experiences.

We have all likely heard the analogy of turning ‘lemons into lemonade’. That has a resounding challenge and can serve as a stimulating call to action. In fact, we have several examples in our portfolio companies where problems have indeed turned into opportunities! However, in the current economy the lemons are sometimes just that . . . . Lemons! If you are going to need more capital to continue to grow your company or if you need to find a different or additional lender, you are best served to objectively deal with that sooner rather than later. Likewise, if you need to be thinking defensively, there is no time like the present to start; waiting too long and not looking at your realities objectively can be deadly.

Sourcing creative solutions to business problems is our forte. Call us to spend a few minutes discussing the uniqueness of your situation in confidence. We may have some solutions or at least be a link in the chain that can move you further down the field. If we can’t be of assistance, we may have an idea where to send you for help.

To put it in real world terms, we ‘do’ business far better than we talk about it. We know how to run businesses, find capital, and find creative solutions for problems. Our experience is primarily acting as principals, not consultants, and that is how we will assist you. As if we are your partners.

We are good at scrambling, because we know that is what it takes to take advantage of a unique opportunity to buy a company, a property, or a piece of equipment that HAS to be closed in 30 days. We also know what to do when the bank asks for a curtailment, wants more collateral, or asks questions or seeks information they have never bothered with previously.

To review our experience in dealing with business challenges, see our Turnarounds & Workouts section.

NOTE: A word of caution about a problem we are seeing way too much of since the new phenomena caused by the pandemic. This is happening even in the ‘good markets’ of Oklahoma and Texas, with record low rates, and with solid companies that are paying their bills and making money.  Be aware of this concern with regard to your ‘corporate real estate’: Falling commercial real estate valuations and reduced loan to value requirements nationally have affected the real estate component of many operating companies recently that had previously depended on the equity in their real estate as a part of their borrowing base. The forced ‘right sizing’ of balance sheets because of this phenomena should be anticipated and dealt with proactively if you have leveraged real estate that your bank has collateralized in the same loan as your business operating loans.