Ohio TMA News
May 2009
In This Issue
(click titles...)
Critical Steps to Determine
Viability of a Business
President’s Report
A Note from this Month’s
Featured Sponsor
Chapter Scholarship
Volume 1, Number 5
Critical Steps to Determine Viability of a Business:
Introducing the ‘Bernie Business’
By Robert L. Cohen, Centrus Group, Inc.
The critical steps to determine viability of a business are no different in a challenging
economic environment than in a prosperous one. First, is there a core business?
Second, is there a management team in place that can effectuate a profitable or
turnaround plan? And third, does the company have access to financial resources that
will sustain its progress through the growth or turnaround plan? If any of these
questions meets with a resounding “no,” it is unlikely the business is viable.
Deadline Extended
What is a ‘Bernie Business?’
Golf Outing!
A comedy motion picture was released in 1989 called Weekend at Bernie’s. It is a
movie about two young insurance executives who discover their boss is deceased.
Believing they are responsible for his death, and that a hit man won’t kill them if
Bernie is around, they attempt to convince people Bernie is still alive.
Young Professionals
Event
Coming Events
May 28- Amity Shlaes, a
syndicated columnist at
Bloomberg, will discuss
her book about lessons
learned from the Great
Depression
See Page 2 for details and
the complete 2009 meeting
schedule. For event signup,
see our Chapter Website.
About TMA
TMA is the premier national
organization of
professionals dedicated to
corporate renewal and
turnaround management.
A ‘Bernie Business’ is much like the movie; the company has no core business, has
ineffective management and lacks the financial ability to responsibly perpetuate the
business. Even so, owners or management continue to operate the business for fear of
losing their company or losing their jobs and the jobs of friends employed by the
company. A ‘Bernie Business’ is a company that is no longer viable, yet owners and
management continue to operate for fear of the alternative repercussions.
Continues…(Feature Article, p. 4)
President’s Report by Nancy Terrill
Dear Ohio TMA members and friends:
Many thanks to Elizabeth Lynch, Ohio TMA board member and Vice President of
Development Specialists, Inc. (DSI) for putting together the April breakfast program.
Titled Auto Dealers in Today’s market: where the rubber (leaves the lot) and meets
the road, the program started with Paul Melville, a Partner in the Corporate Advisory
and Restructuring Services practice at Grant Thornton LLP who provided some
sobering financial and economic background on the industry. Other panelists included
Scott Opincar, Insolvency partner at McDonald Hopkins LLP who represents creditors,
and Rick D. Sonkin, Corporate partner with Sonkin & Koberna LLP who represents
numerous automotive dealerships. These panelists discussed issues that come up
during negotiations with clients in this industry, including practical issues such as
agreement regarding on-site collateral minders and the blue-sky value of the
dealership.
Continues... (page 3)
A Note from
this Month’s
Featured
Sponsor
The Centrus Group has been recognized as one of the premier turnaround practices
in northern Ohio. Centrus assists companies to develop and implement a variety of
creative yet strategic actions that will result in a sustainable, profitable and growing
company. To accomplish that, Centrus provides expert management and strategic
services in the areas of turnarounds, crisis intervention, wind-down management,
financial/debt restructuring, executive recruiting and divestitures. Visit Centrus’
website at http://www.centrusgroup.com/ or contact the firm at 330-864-5800.
Northern Ohio TMA News page 1
Ohio TMA
Corporate
Sponsors
Aurora Management
Partners
2009 Meeting Schedule
May 28 – GUEST AUTHOR: More Than Predictable: What We Really Know About
the Great Depression Causes and Why We Seem to be Recreating Them. Amity
Shlaes is a senior fellow in economic history at the Council on Foreign Relations and a
syndicated columnist at Bloomberg. She has written for The Financial Times and The
Wall Street Journal, where she was an editorial board member, as well as for the New
Yorker, Fortune, National Review, The New Republic, and Foreign Affairs.
Calfee Halter &
Griswold LLP
Her latest book, The Forgotten Man: A New History of the Great Depression, has been
widely praised by prominent figures such as George F. Will, Harold Evans, Newt
Gingrich, Arthur Levitt, Mark Helprin, Peggy Noonan, Paul Volcker, and in publications
such as The New York Times, The Wall Street Journal, The American Spectator, The
Weekly Standard, and The National Review. Amity Shlaes, an established leading
historian of 20th Century finance, presents an analysis of the Great Depression which
identifies the economic consequences from government intervention with clear
implications for our economy today.
Centrus Group, Inc.
For more information, contact Louise Walsh, Chapter Administrator, at 216 861-5627
or admin@tmaohio.org
Baker & Hostetler LLP
June 17 – Summer Outing / 5:30 – 8:00 pm (Shoreby Club)
First Business Capital
Corporation
July 20 – Golf Outing (Mayfield Country Club)
August 27 – Young Professionals Event / 5:30 – 7:30 (D’Vine Wine Bar)
Huron Consulting
Group
Inglewood Associates
September 24 – Bankruptcy Judge’s Panel
October 29 –TMA - NEON/IWIRC joint meeting / Topic TBD
November 19 – Annual Workshop
December 17 – Holiday Party
McDonald Hopkins
LLC
Morris-Anderson &
Associates
NOTE: Exact locations and times for each event will be announced well in advance of
each meeting. While it is anticipated that this schedule will be held throughout 2009,
material events or other unforeseeable events could result in changes. For the most
current information about meetings and events, and to sign up, visit the TMA Ohio
website.
The Parkland Group
Wells Fargo Business
Credit, Inc.
Western Reserve
Partners
Northern Ohio TMA News page 2
Northern Ohio TMA News page 3
Ohio TMA
Board Members
President’s report (continued)
President
Nancy Terrill (216-858-3577)
nancy.terrill@gt.com
Vice President
John Lane (216-839-6700)
jlane@ingw.com
Secretary
Mark Kozel (216-621-1985)
mdkozel@parkland.com
Treasurer
Mark Kutylowski (216-248-8787)
mkutylowski@ssandg.com
Publicity
Daniel DeMarco (216-274-2432)
dademarco@hahnlaw.com
Membership
Scott Opincar (216-348-5400)
sopincar@mcdonaldhopkins.com
Education
Robert Folland (216-566-5813)
rob.folland@thompsonhine.com
In our effort to bring the highest quality programming to the community, the Ohio
TMA May program will feature Amity Shlaes as a guest author. Ms. Shlaes is an
accomplished senior fellow in economic history at the Council on Foreign Relations
and a syndicated columnist at Bloomberg. She has written for the Financial Times
and the Wall Street Journal where she was an editorial board member. She has
also written articles for the New Yorker, Fortune, National Review, the New
Republic and Foreign Affairs. Her latest book The Forgotten Man: A New History
of the Great Depression focuses on an analysis of the Great Depression that
identifies the economic consequences from government intervention, with clear
implications for our economy today. This program may answer the underlying
question of how long this recession will last, with obvious impact on our respective
practices and the opportunities for turnaround for our clients.
Summer brings pure networking events including an evening stroll next to scenic
Lake Erie at the Shoreby Club in June, and the annual golf outing at Mayfield
Country Club in July. For young professionals we are sponsoring a free networking
event in late August. Corporate event sponsorships remain available for the Amity
Shlaes program and the summer networking events. If interested, please contact
Gregory Pike, our board member in charge of sponsorships (216-338-3744). We
look forward to your involvement in the Ohio TMA this year. If you want to join or
have any questions or comments about Ohio TMA, please feel free to contact me
at 440-477-4781 or Nancy.Terrill@GT.com. Or of course, visit our website.
Nancy Terrill, president of Ohio TMA
Sponsorship
Gregory Pike (216-338-3744)
gpike@corsairpartners.com
Chapter Scholarship Application Deadline Extended
Scholarship
The Ohio Chapter of the Turnaround Management Association is currently
accepting applications and will award up to two scholarships for the 2009-2010
academic year, each for $2,500. The application deadline has been extended to
May 31. Eligibility and selection criteria are:
Sally Barton (216-689-0590)
sally_c_barton@keybank.com
Pro Bono
David Wehrle (330-255-2484)
dwehrle@bmfadvisors.com
Eligibility and selection criteria
Special Events
The scholarship is open to any student who meets all of the following criteria:
Kelly Burgan (216-861-7395)

Programming
Child, stepchild, grandchild or spouse of any current member of the Ohio TMA
Chapter.

Studying in a law or business-related degree program.
bjfarkas@vorys.com

Will be a junior, senior or post graduate level student during the 2009-2010
academic year.
kburgan@bakerlaw.com
Bryan Farkas (216-479-6156)
Neil Kelly, (216-222-3956)
neil.kelly@nationalcity.com
Selection will be based on:
Liz Lynch (614-734-2717)

Grade-point average.
elynch@dsi.biz

Evaluation of required essay (See Scholarship Application).
Sharon Rader (216-222-3009

Extra-curricular activities.

Interview (optional at Committee discretion).
sharon.rader@nationalcity.com
Past President
Joseph Hutchison (216-861-7701)
jhutchinson@bakerlaw.com
The application form is available on our website.
Administration
Louise Walsh (216-861-5627)
admin@tmaohio.org
To subscribe, visit TMA
Encourage your eligible family members to apply soon.
on the
Web
Northern Ohio TMA News page 4
Third Annual Young Professionals
Social Event
Mark your calendars!
When: Thursday, August 27, 2009, 5:30 – 7:30
Where: D’Vine Wine Bar, 836 W. St. Clair Ave.
(Cleveland Warehouse District)
Stay tuned for more information, including the wine
theme, to be determined!
Feature article (continued)
Is There A Core Business?
A company has a core business when there is demand for its product or service at volume and pricing levels that
can reasonably provide a favorable return to the company’s owners. While that return is customarily measured
financially in either improved equitable value or profit, it may also be measured in the ability to provide jobs or
support some objective other than financial performance. Other considerations would include the ability to
sustain a multi-generation family enterprise for its namesake, or to provide a supporting product or service to a
sister division where the profit is ultimately realized.
A key activity to determine whether a company has a core business is to establish definable, measurable
objectives against which company performance can be compared monthly or annually. There are two traditional
measures to determine if there is a core business. First is the ability to price product competitively, yet
profitably. Second is the ability to capture adequate market share to support the plan’s volume objectives,
achieve sustainability during challenging times, and sustain profitable growth during more favorable economic
conditions.
To determine if there is a core business at a ‘Bernie Business,’ it is critical to realize the only difference between
a business and a hobby is that the former has a profit motive. Owners and managers of a ‘Bernie Business’ have
essentially transformed an enterprise into a hobby.
A viable company will have a clearly identifiable core business.
Is there an effective management team?
An effective management team is one that is best equipped to address the environment in which the company is
engaged. Management of a rapidly growing company should have prior success managing organizations with
equivalent or greater growth. Management of a company in its infancy should include managers with significant
entrepreneurial skills including full profit and loss responsibility. The management team of a company in crisis
needs to implement a turnaround strategy, and therefore should include a manager who has successfully
completed the turnaround of a comparably sized company. Many good managers are available, but not all good
managers bring successful experiences that are appropriate to the situation a company faces.
Northern Ohio TMA News page 5
Continues... (page 5)
Feature article (continued)
The final dimension of management effectiveness is style, or approach, to complement appropriate skill and
experience.
Effective managers can be placed into two groups: Marines and Policemen. The ‘Marine’ manager is strong at
making changes to the status quo and overcoming obstacles. The ‘Policeman’ manager is most effective at
implementing an established plan and maintaining actions to remain on the plan. Sometimes you have to place
the Marines on hold, and sometimes you must place the Policemen on hold. In the appropriate scenario, each
can be most effective. A ‘Bernie Business’ has Policemen when they need Marines, Marines when they need
Policemen, or no effective management whatsoever.
Having a good management team is not adequate. A viable business must have a good, effective and
appropriate management team capable of accomplishing change if change is necessary, or skillfully
implementing an existing plan when appropriate. Viability of the company depends on the demonstrated ability
of the management team to implement appropriate strategies at the appropriate time.
Are there adequate financial resources?
Inadequate financial resources can place considerable pressure on a company’s viability, whether in growth
mode or a turnaround scenario. A solid core business and an effective management team provide the company
with a plan and the opportunity to succeed; however, without resources to fund the business through growth or
through a recovery, there will not be a viable enterprise.
During periods of rapid growth, cash flow is critical to funding the working capital requirements of a business
plan whose objectives include profitable, sustainable growth. During depressed times, when the objective is to
survive, the company must have adequate working capital and cash resources to be able to emerge into a more
active economic environment.
Without the ability to fund working capital requirements, neither a growing business nor one trying to survive an
economically depressed period will be considered viable. You know that you have a ‘Bernie Business’ when your
plan calls for the continual deterioration of cash and cash collateral with no end of such deterioration in sight.
In conclusion, companies with the greatest viability potential are those that can clearly demonstrate a core
business, have an appropriate and effective management team in place, and have resources to ensure working
capital is available to implement the company plan. On the other hand, a company whose product or service
lacks a market, has an inappropriate or inexperienced management team, or inadequate financial resources to
implement the company plan, is not a viable business and has become a ‘Bernie Business.’
Bob Cohen is the President of The Centrus Group, Inc., a Northeast Ohio based crisis management/turnaround
firm that focuses on maximizing the values of businesses, serving its clients for the past 15 years. Bob can be
reached at bcohen@centrusgroup.com.
Northern Ohio TMA News page 6