What are my options for keeping my company afloat?

Trevor, you're in a tough and desperate position. But perhaps I can offer some suggestions.

Start with your cash flow concerns. You've got to have cash. Make sure all of your customers are paid current, and if not get on the phone and ask for their payment. It doesn't hurt to let them know that times are tough - they've likely been through it themselves. Selling your equipment to a leasing company and leasing it back is an idea if your credit is alright. It won't do any favors to your credit count, and the interest is high, but it's likely better than bankruptcy. If you have equipment that's not critical to your business, you may consider selling it. Finally, there's friends, family, and HELOCs possibly.

Secondly, reduce your expenses to the bare bones. Since payroll is probably your highest expense, you may have to let people go, and plan to work more hours yourself, at least until you get through this. Your own paycheck may even take a hit.

Finally, you need to find work to replace what you lost. Ask your customers for referrals, watch for new buildings or move-ins, get to know additional property management companies, and even consider doing some residential work. You may want to make some lowball offers just to get your feet in the doors and bring some cash in. Or, consider offering the employees working in the buildings that you're currently working for, to do their houses at a special price.

I've helped companies pull together small focus groups that have worked well. The group perhaps may consist of one of your suppliers, your accountant, a customer, and a banker. Have them meet you at a restaurant (you pay) for lunch and explain to them where you're at and that you would value their ideas. It will amaze you what comes from the meeting.

One more thing . . . if you're able to climb out, please get yourself some good solid accounting help in the future so that you don't have to learn this lesson.

I would add to Allen's comments on payroll and look at the possibility of moving to a "piece rate" compensation plan for your installers and field staff. It is a common practice in your type of contracting work to pay employees per job rather than per hour. This could impact your cost of sales significantly, given the fact that all companies experience inefficiencies in relation to personnel.

Additionally, I would take a look at your historical jobs from a true job costing perspective and determine if your current pricing structure is profitable or are you simply covering costs? Covering costs is not necessarily a bad thing, as Allen mention with regard to getting sales in the door. It is important that although you may lower a few bids in order to win new business; you must cover all your costs and at least break-even on that job. You cannot afford to not cover cost and add to your cash flow issues.

Finally, also jumping on what Allen said about the focus group, I think that is an excellent idea. I also think it would be beneficial to possibly get together with other service contractors, such as a landscaping service, and form a synergy and joint marketing campaign if possible.

Looking closely at cash flow and each component critically is important. Examining payroll options will be useful. There is merit to using peice rate remuneration. You may also consider moving towards subcontracting. If you do so, make sure workers compensation and liability concerns are covered. In my area I'm seeing numerous business letting people go or cutting them back to 1-3 days a week.

Focusing on what type of jobs you are successful in garnering and completing is important. Companies I am involved with have been diversified but are now shrinking their focus to where the work is.

Obviously the tools and equipment you are using should be held, but what you are not using might be what you want to sell. What I'm seeing is that equipment markets are depressed currently and you might not get what you want for them.

As for leasing, this seems to work when you have a steady reliable stream of income being produced. Without the long term income to cover the cost, I have not found leasing a good option. When you figure out the total cost of the agreement after all the interest and fees, it is much greater that the salvage value of the equipment. While I'm not versed in bankruptcy laws, those lease agreements usually carry a personal guarantee requirement that can be problematic. Finally, leasing companies don't really like to negotiate if you're having problems making the payments.

The last idea I could add is you may want to consider looking for a "White Knight" to buy your business. I noticed the WSJ report that this is taking place at a dramatic rate currently. In my mind, being acquired is slightly better than bankruptcy.

Hope this helps.

Times are certainly tough. It would seem you could use the equipment as collateral for a loan if you have, or can establish, a relationship with a decent lender. It doesn't seem selling equipment (if you need it to continue) and then trying to re-lease it is a good idea if your financials or credit are really weak. A leasing company usually looks at financials/credit rating (it's probably easier to get a loan secured by collateral than to get credit with no collateral and bad financials). On the other hand if you don't need some of the equipment you should sell it, but used equipment may not have a lot of value in these times (supply and demand). Another factor on the lease idea is that if you own the equipment outright your costs would stay lower than adding a lease to them (which is bound to be relatively expensive and would make your long-term structural issues worse if that's the problem).

Not sure what's behind the loss of accounts. Did they fail? If not why are you losing them? Do you need to reprice and make another run at the losses if they hired someone else and/or take the pulse and make sure other clients are not looking at other options? Loss of new business should not impact your ability to survive if you're right-sized, but loss of existing large contracts could (or could mean you need to adjust your cost of operations to the work you now have).

Have you looked at your overhead/cost of operations? You should know what it costs you to stay operational as well as your marginal cost per job. I'd think this sort of business could be low fixed overhead beyond the equipment cost (and if that's paid for, then ongoing overhead could be quite low). The marginal cost should also be relatively low, other than the cost of operating the equipment (presumably mostly for employee/s). If you have a structural issue (too much overhead relative to the revenue stream) then recognizing that leads you toward a set of solutions. If your fixed overhead is minimal and not the issue then it may be a different set of solutions (or no longer a good business).

People tend to look to squeeze savings out of employees. That's rarely the best route in my opinion, but if you're overstaffed relative to the current level of work you have to tackle that (fairly). If this is part of it I'd look at your marginal cost per square foot (and by employee) to see who is most efficient and to know how your cost structure sits and how to keep everyone busy. If work is decreasing scheduling may be more of an issue than the employees themselves (though optimizing schedules may lead you to reductions in hours or numbers).

I hope some things will work out for you.

Sometimes your savor in such a situation comes from a place you least expect it; ie your competition.

Consider the following alternative options to declaring bankruptcy:
1. Reduce operating cost wherever prudently feasble.
2. Merge or develop a strategic partnership with a company that has a customer base that you desire to market too but that does not have overlapping services/products. Ideally you compliment each other. An example might be a company that sells carpet but does NOT do carpet cleaning.
3. Acquire a competitor or perhaps just his customer base and or assets.
4. Merge with a competitor. in other words cut your losses and get SOMETHING out of all your years of hard work rather that the complete loss you will experience with bankruptcy.

These are just a few suggestions that you may or may not have thought of already. I hope this helps. We are all having to make sacrifices ni this down economy. I wish you the best!