Edition 286 – Jane & John

Ralph *, a long standing client, phones one day. He has some colleagues in his industry that have struck trouble. They’ve received some business advice, but he feels they need a second opinion. Would I mind having a word with them, at least to give them the opportunity to talk to someone else? Ralph’s a great guy and he’s not into wasting anyone’s time, so “sure thing” was my immediate reply to him.

On the day of our meeting, Jane * and John * come to meet me for the first time. They’re both late 50’s and what strikes me immediately is the general look of defeat about them. They’re impeccably attired, so that’s not what I mean. It’s their body language and the look on their faces that struck me. Shoulders slumped. Furrowed brows. Despair in their eyes.

We shut the door of my office and in this cocoon of confidentiality, they start to tell me their problems. They had a large contract that they’d lost about 18 months prior. Their business took a downturn and, as a result, they owed money to the Australian Taxation Office as well as unpaid Superannuation Contributions. Their current advisor, whom I’d never met, but knew of around the traps, had been their’s for more than a decade. When Jane and John sought his advice, the reply was both blunt and dismissive. “You need to declare yourselves bankrupt and you need to put the company into liquidation”.

With the power of just 15 words, this advisor had torn apart the lives and futures of two people whose small family business was going through a rough patch. He’d told them they were going to lose their house. They’d end up with not a lot to their name. In their late 50’s, their whole prior 40 years of toil and challenge seemingly amounted to nothing.

I’m a furious note taker and as I’m scribbling the details down, I jump up to the whiteboard. My barrage of questions to them struck up a new piece of vital information. It was something that would end up being critical to their future situation. It was something their advisor of 10 years tenure should have known. It was a game changer.

As I’m wont to do, I grow more animated as I recall the facts they’ve told me – the good, the bad and the ugly. I gave them a rough outline of a plan. It involved.

1. Selling a small commercial property used in the business to a newly created self managed superannuation fund – all above board and in the best interests of the client.
2. Agreeing a plan with the Tax Office in relation to the payment of the unpaid tax debts and the unpaid superannuation contributions.
3. Developing a recovery plan to work with them to determine what work on their books was profitable and what wasn’t.
4. Getting them to thinking like entrepreneurs, not merely technicians.

The look on their faces was a combination of amazement and scepticism. “Will that work?” they asked, remembering the place they’d come from and the advice they’d previously received. “Well, there’s a few ducks we need to get in a row, but I’m confident we can pull it off” I replied. We committed to reconvening in a week. They were tasked with providing me with more information. I promised a bit more detail than the whiteboard sketches.

Something happened in that room, that day, that changed the lives of two people, forever. There was a tear in at least one of the three pairs of eyes in the room as I, charged with the same facts as their existing advisor, presented them with a road out of despair. It wasn’t going to be easy – they knew that. However, I was prepared to back them as we righted the ship of state.

In the end, they paid off the debt, rebuilt the business, made good money in the ensuing ten years, built up a nice retirement egg…..and kept their home. When they pulled up stumps from the business in their late 60’s, it was with a new four wheel drive and caravan parked in their driveway, their lifelong retirement dream finally realised.

The power of just 15 words could have broken these two. Instead, a different perspective and some creative thinking proved a pivotal moment in their lives.

* Names changed to protect the privacy of the individuals involved.