Rick Chance, Head of Special Situations Advisory Group, was quoted in Investors Business Daily

June 9, 2009

Rick Chance, managing director and group head of the Special Situations Advisory Group with KPMG Corporate Finance LLC, was quoted in an article in Investors Business Daily entitled "IBD's 10 Secrets to Success." Click here to read the article in its entirety.

This article focuses on IBD's #7 top secret: "Focus your time and money: Stress your firm's fitness." To help pass a stress test, be sure these are up to speed:

Evaluate your cash situation.
Chance recommends testing your business model by creating various scenarios for monthly receivables. Assume the economy will take months to stabilize. Set a goal for all supplier contracts to be reduced by 10% to 25% through negotiations. Hold managers accountable for achieving various levels of discounts.

Instill a culture of survival.
Make sure you have no sacred cows in your firm. "Avoid a mind-set of let's wait and see how long this recession lasts. Do more with less," says Chance.

Shoot for experienced.
Take an objective look at the makeup of your senior management team. Chance says the skills needed to manage a business during the economic downturn are not the same as those required during good times. A track record of leading through similar hard times can help.

Think near-term.
Chance says to focus on 6 to 12 months rather than a 5 year plan. "Focus on those activities that generate immediate cash for the business," he said.

Boost banking relationships.
Financial situations react negatively to surprises, Chance says. "Banks today are more willing to extend temporary forebearances to existing borrowers if they believe management has a feasible plan to repay the loan as market conditions improve over time," he said. Chance recommends expanding your banking relationships with senior executives beyond the account manager level.

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