Turnaround helpers

Company specializes in keeping businesses in business
Greg Marx is modest about his company’s beginnings. He was supposed to be taking a few weeks off to decompress after one of the many banks he worked for was purchased by another. Instead, former bank clients were calling him for advice.
“I had a fishing trip planned that I had to cancel because I had two companies that had given me these projects, and on one, I ended up flying to Boston for three weeks,” Marx said. “And I said to my wife, ‘I think we have a company going here.’ That’s why I didn’t incorporate right away. I had absolutely no idea that I was going to do this.
“I finally realized that this is kind of what I did every day of the week (as a banker) except now I’m getting paid for it, and it was kind of fun.”
That was 1990. Marx’s company, Business Associates, quickly made a name for itself as a consulting firm helping to turn struggling companies around — something he had done as a commercial banker with employers such as Marine Bank, F&M Bank and Kilbourn State Bank.
But Marx quickly points out that Business Associates also does more proactive consulting, where clients — many of them former turnaround clients — call with “good problems” like having too many orders to fill without enough capital to fulfill them, or with strategic planning issues.
The split between proactive consulting and crisis or turnaround consulting was 75%:25% favoring proactive consulting until about two years ago when the economy started taking a turn for the worse. Now the workout to proactive consulting has flipped to 60%:40%.
Many times, business owners finding themselves in trouble have few, if any, confidants. Marx and associate Frank Nuck provide an objective point of view without having ulterior motives.
Marx believes much of his success has stemmed from the fact that both he and Nuck also own small businesses, making it easier for them to see things from a business perspective rather than just a financial perspective.
“I think his strongest suit is he knows how to talk to business owners,” says Jack Bastian, a first vice president of Bank One in Milwaukee. “He knows how to bring them (business owners) the necessary perspective so they can understand realistically their situations and what their options are.”
Bastian works in the turnaround area for Bank One and has known Marx for 10 years. He says Marx has a better-than-average success rate at turning clients around, and is highly regarded by other large banks in town, too.
“It is not an easy job,” Bastian says of consulting with turnaround clients. “Greg has to be part psychologist, part confidant, part friend, and sometimes actually has to give people a lot of news or direction that they do not want to hear, and has to do it in such a way that they’ll understand what he’s saying and why they have to do that.”
According to Marx, many times the business owner or president is willing to do what it takes to turn the company around, but family members or shareholders may fight the plan because they are more comfortable with the status quo. And that’s where many of the problems begin.
“Many times it’s just companies that have been comfortable for many years,” Marx says of turnaround clients. “Whether it was families or they’ve just been there for a long time and they don’t watch the operational issues, or they don’t do the planning that they may have done in the early stages.
“… They are so shadowed by the past that they’re not looking at the present or the future,” Marx says. “That’s a big problem.”
Nuck added that because companies are coasting, management might be unaware of changes in the marketplace.
“Sometimes these people come in to turn things around and the bottom line is that they don’t have anything to sell because there is no market for their products or services any more,” Nuck said.
For those companies that can be turned around, Business Associates retains approximately 80% as proactive clients, according to Marx.
“Maybe it becomes a brother-sister relationship because, after you’ve been through these troubled times, you do develop a certain bond with each other and there is a certain relationship that develops,” Marx says. “And friendships usually blossom because anyone can be your friend when things are going good, it’s another thing to be your friend when things are really ugly.”
One of the many clients that continues to use Business Associates’ services is Collaborative Design. The Waukesha-based company is an international commercial and residential interior design firm that was struck by white-collar crime in 1992. Walter Koehnlein, president of Collaborative, hired Marx to guide the firm through the crisis. Since then, the company has retained Business Associates to lend perspective on long-range, strategic planning.
“I highly recommend him,” Koehnlein says of Marx. “He’s an excellent adviser and has become a very good friend, and he’s available whenever you find the need to call on him.
“He’s a good man,” Koehnlein said. “He sure did a lot to get us to where we are today.”
August 31, 2001 Small Business Times, Milwaukee