As both of us dug deeper, there were some major problems. Despite the fact that I used all my Conversant training w/ Conversation Meter, "What's a time for now", Schtick and Purpose, Intersection model, in the end, a business is a business. The numbers spoke louder than any word. First off, there was no balance sheet of any sort. No actual or projected income and expense statements. No cash flow projection. The only time a cash flow projection went south was "This month is a little tight because our business partner's payment is late by 2 weeks, can you loan me RMB 25,000 to pay for the staff?". Maybe I am talking a Sincere Conversation. That was my view and not able to Intersect yet. I digress. Back to the numbers. I finally got some spreadsheets with numbers. What a load of cr***p! There was no break down of itemized expenses. Everything was lumped in. And all the numbers were "projected" based on previous years. Wow.. we made pretty good money. Should be afloat. Not so fast.... After I pull out all the numbers and put in some other numbers from another spreadsheets. Wow... Holly cow Stage 4 Cancer Batman! This things is going down. First off, all loans were moved off the balance sheet and made them as Shareholder injection. In the end, who has the cash to pay for the loans? Second, can't use projected income numbers to pay for actual expense numbers considering I just hired a group of 3 sales rep to push for a product which this business has distribution right. And, I couldn't see any actual numbers from previous quarters.
The two owners have major communication problem. I think I can write a book "Communication Catalyst 2, the self absorbing SOBs". One couldn't speak proper Chinese. I threw in 4 lessons with a Chinese teacher for him. For years, the main staffer has been conditioned that all emails were never replied by the owners. It's only one-way communication. The responds were top-down I know everything and you are my slave. The other owner, couldn't even type English properly on promotional items. And couldn't even type Chinese on a computer! Everything had to be by fax, by hand and by phone. OMG. This second owner worked thru her "agents" in the office.
The numbers from the promotions were so convoluted that we couldn't make heads or tails about them. What were our bottom lines for the promotions, no one knew as the discounts and quota discounts on the discounts were "directed" by this verbal expressive owner.
Contracts. WE (the two of the rescuers) had just discovered that the product distribution contract was so one sided with holds that we would not sign. Basically, you are screwed. Then the new shop that is causing the most grief right now, even the Accountant agreed, the contract was very dictatorship like no marketing could be done. And it's draining good cash away. To get out now, have to do the U$ gov t approach of $ printing scheme, RMB 510,000 in change. Impossible. That was one of the contract I asked to see before signing. I turned around, it was signed.
I couldn't market the product online based on agreement as the web purchase can only limited to Shanghai. Let see. 18Million in population. Out of that, may 15million has online presence. And out of that, people that need that type of product is about 5million. And out of that 5million willing to pay.... After, this is China... Cheapskates.
This morning, I have discovered that the web has spread negative comments about the shop. All truth. Then of course, one was the most damaging because name was mentioned and accusatory tone was left. Damage was done. Hence no business for the last month... And these guys still don't understand and think they knew the "industry". What a sincere conversation they kept having with us!
Staff. One of the most damaging one was the "protégé" of the female owner. That caused major problem. I had to employ the $lackTel human monitoring approach to get things done. Today, None! No email respond. No anything. I am not surprise tomorrow things will be implement because his "boss" said so. The one that kept avoiding and ignoring us. The high supreme commander.
Tomorrow, last ditch effort and last straw, last pitch, last intersection attempt or whatever other terms .... If we don't get our business-like way to start implementing changes, the hole eventually will be so deep that the wall will collapse inward and bury the one in there.
O yeah, WE (the rescuers) wasted RMB 150 of good $ to do taxi rides and coffee to the Bund yesterday afternoon. To meet with this "developer" to look at a new location as the 3rd location for this failing business. Come on now! The location? Right behind the Waldolf hotel at the Bund. It is building a new wing. And in between is a new development supposedly to be another comprehensive development of high end restaurants and in need of a hair salon. Sorry, tapped out. New business application denied. That developer after quickly showing us around, 5 minutes top, jump into the back seat of a black 4-door latest model Bentley and left. No plan. No extra information. No cost analyst to provide. Where are these people come from? Planet of the iNept? (O maybe I should capitalize the "i" so that I don't get any lawsuits.)
Let see, RMB 800,000 had gone to a place that should not be. Now need to come up with another RMB 520,000 for the next 20 months.... Ummm... If this guy is so smart, he's already a millionaire. Compounded by my back-year projection, he should have about 12M RMB in assets. Of course, that was only my projection just like the figures I got from the spreadsheet today.
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