One chapter closes another chapter begins

book1Many of my faithful readers knows that I have been running a friend’s business since the first of July last year.  Long story short.. dear friend had  stroke the end of June and his wife called me up to come run his company that did respiratory/oxygen, and manufactured obese hospital beds and low loss mattress and other supportive surfaces. My independent pharmacy was the largest HME  supplier in a  two counties back in the 80’s & 90’s. So I was familiar with the business model.. He had been in business for 25 years.

Unfortunately, he suffered a major clot/stroke in front left lobe… leaving him totally paralyzed on the right side and unable to talk and not sure if he could understand speech..  After spending several weeks in intensive care.. he moved to a LTCF where he stayed until the first of Sept when he contracted pneumonia and he passed away.

I walked into a business with operations in total disarray, he had expanded into providing home medical equipment, sleep labs and trying to provide service to facilities as much as 250+ miles away from the company’s HQ, and there was some 50+ employees… and collectively losing money.

The day I started July 1, 2013.. Medicare competitive bidding was implement in our service area… meaning that most of the Medicare allowables were now 1/3 of what they had been…. and within 30-60 days.. as A/R was collected.. the profits were going to drop in that business section and loses were going to increase.

I found that there was no financials, no asset sheets, balance sheets and as bank statements started coming in.. that there were 11-12 accounts in 5 different banks… and he had 7-8 EIN’s.

I spent most of July getting my office in place.. getting me a new laptop, Quickbooks installed and learned, new bank account opened and computer checks printed.. and trying to consolidate deposits/debits into the new checking account and closing the accounts in the other banks. In its 25 years of operation.. the company never had a CPA on board. Luckily my CPA was willing to take on the challenge.

The first two months.. the company showed ~ a 25% net loss.. getting the money together just to make the $250,000 monthly payroll was troublesome.

I had to start evaluating each and every employee and division. I had salesmen that weren’t selling and two divisions that were losing money hand over fist. I tried to convince the owners to close down the sleep labs and HME division.. They would not listen, the person that was over those divisions insisted that they were making money.  So I convinced the owners to spin those divisions off into their own free standing entities… and see if they where making money. It is still afloat .. but.. don’t expect it to stay that way for a couple of more months.

The core business is now down to 30 employees.. all the past due bills have been taken care of and a lot of other financial issues have been resolved.. As of Jan ,2014 closed today.. the core business is now showing ~ 25% PROFIT!

When I came on board, it was agreed that my primary charge was turn the company around.. if it could be done… Having moved the company from losing 25% to profiting 25%.. that I had  accomplished what I was suppose to do.. and thus.. I would move on.

So, this AM .. I called a entire staff meeting .. to announce my departure.. My management style was 180 degrees from my predecessor .. he was a dear friend but he really needed some anger management therapy. As I walked around the building this AM and afternoon.. the mood of the staff was clearly down at least a notch or two.

The son – who has worked in the business for 20 yrs – is now President and I hope that he can keep that place on “the rails”.

When I took on this challenge.. I was contemplating retiring AGAIN.. so unless another challenge comes my way… It looks like I am now retired !


One Response

  1. You’re a good man Pharmacist Steve.

    Your friend and his family were indeed blessed to have had you as a friend. Amazing that you could take company from 25% losses to 25% gains in such a short time period in the face of 33% reimbursement cuts.

    Thanks for all you do for the profession of pharmacy. I hope this retirement takes if that is what you really want, or that your next endeavor is as profitable and productive as your last one.

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