How would you approach a friend?

[VisionaryMom]

We have a friend who owns a small business. A few months ago, she told DH that she's in over her head with her finances and isn't sure how much money she really has, etc. So I volunteered to help her out. I've just gotten a good chunk of the info, not all of it yet, but I ran some brief numbers last night. She's broke...headed for bankruptcy fast. Her business expenses are running about $20K a year more than she's bringing in, and that's before she pays herself. She's living off shifting debt.

Now, she's avoiding me. It's subtle, but I realize she's doing it because she just doesn't want to deal with the money problems. I get that, but I told DH last night that I have to talk to her. I want to help her figure out a plan, but I know that I'm going to have to force the conversation. She's just cut off thinking about money. So, if this were you, how would you want someone to go about telling you? Should I have spreadsheets and income statements? Should I come in with an array of ideas? (I think her business can generate more revenue in a number of ways.) I really do want to help her, but I'm not a nurturer. I feel sure she's going to cry if I give her the numbers and make her face it, and I'm terrified of that prospect!

[Juvysen]

Schedule an appointment with her to talk specifically about this (don't drop the bomb casually).  It'll give her a chance to brace herself.  Clearly she knows she's in trouble, or she wouldn't have asked for help.  Personally, I'd want to see numbers and charts, but I'm that kind of person... sounds like maybe your friend isn't, or she might be more on top of this, already.  I guess be as gentle as you can, bring charts, but offer them as an "if you want to see..." and not "look at this... " kind of way, I think?

I'm sorry, this must be difficult to deal with :(

[LifewithSage]

Ugh, we have friends that own a business and they just recently asked me to help them out with various financial and accounting issues.  I ended up setting up a meeting and treating it the same as I do when I present to my company's executive team.  I kept it very professional and very factual.  I laid it all out with numbers and graphs and ratios and all sorts of things that they had never thought about.  I tried it keep it on as professional of a basis as I could.  I know your friend is trying to avoid it, but avoiding it could lead to financial disaster.  As a business owner she needs to be made aware of her dim outlook and also needs to be made aware of how to fix it.  I think if you focus on the numbers and how to improve them that would be best... I also think perhaps bringing trends in and helping her formulate a budget would help as well?  So, break down the P&L into each category showing the historical trends, formulate a plan to reduce costs or increase revenue or at least plan a budget around them.  You could perhaps give her the good news first... so, I have all sorts of way to increase revenue and reduce costs and here that is... and then tell her the reason you've found these is because her business isn't doing so hot... would something like that work?

[VisionaryMom]

Originally Posted by Juvysen 

Schedule an appointment with her to talk specifically about this (don't drop the bomb casually).  

That's what she's been trying to avoid! I've emailed & called, and she just doesn't return them. She'll email me back about other things - issues w/ clients I don't understand, but not about the specifics of dealing with where she is.

Originally Posted by LifewithSage 

Ugh, we have friends that own a business and they just recently asked me to help them out with various financial and accounting issues.  I ended up setting up a meeting and treating it the same as I do when I present to my company's executive team.  I kept it very professional and very factual.  I laid it all out with numbers and graphs and ratios and all sorts of things that they had never thought about.  I tried it keep it on as professional of a basis as I could.  I know your friend is trying to avoid it, but avoiding it could lead to financial disaster.  As a business owner she needs to be made aware of her dim outlook and also needs to be made aware of how to fix it.  I think if you focus on the numbers and how to improve them that would be best... I also think perhaps bringing trends in and helping her formulate a budget would help as well?  So, break down the P&L into each category showing the historical trends, formulate a plan to reduce costs or increase revenue or at least plan a budget around them.  You could perhaps give her the good news first... so, I have all sorts of way to increase revenue and reduce costs and here that is... and then tell her the reason you've found these is because her business isn't doing so hot... would something like that work?

This may work. TBH, though she's really great at doing the work that the business does, she's not really cut out to be an entrepreneur. I'm not sure how she's made it this far. She still is on 2009 (!) for gathering expenses and has just filed for tax extensions since then. She really doesn't want to put the time into the business side of things, but unfortunately she's made it tough for anyone to come in & take over because of the disorganization. Sigh. I may approach it as with any other client and see how that goes. Though I don't want my husband with me because this is my thing, he's so much better at the "here, cry on my shoulder!" thing.

[tinuviel_k]

You said in your post that you volunteered to help. Did she actually ask you to? It sounds like (for whatever reason) she does not really want help or is not ready to admit needing it. Unless you have some kind of personal stake in the business I'd back off. If she wants to come to you she can, but you can't force assistance on people who don't want it. By her actions I'd say she doesn't want to face her financial issues right now or doesn't really want your help with them.

[zinemama]

Originally Posted by tinuviel_k 

You said in your post that you volunteered to help. Did she actually ask you to? It sounds like (for whatever reason) she does not really want help or is not ready to admit needing it. Unless you have some kind of personal stake in the business I'd back off. If she wants to come to you she can, but you can't force assistance on people who don't want it. By her actions I'd say she doesn't want to face her financial issues right now or doesn't really want your help with them.

I agree. If she wants to talk to you she will. It's clear that right now, she doesn't.

[LifewithSage]

Oh goodness, 2009!?!  I agree, it's a mess.  I would approach her and let her know gently that ignoring the problem has made it worse and if she wants to succeed she needs to get things in order and have someone else manage the finances.  I'm sure she could find someone for a reasonable price part-time working from home to put together the financials on a monthly basis and take care of whatever a/p that needs to be done.  The perfect job for a SAHM that has a basic bookkeeping background and wants some extra money. 

Originally Posted by VisionaryMom 

Originally Posted by Juvysen 

Schedule an appointment with her to talk specifically about this (don't drop the bomb casually).  

That's what she's been trying to avoid! I've emailed & called, and she just doesn't return them. She'll email me back about other things - issues w/ clients I don't understand, but not about the specifics of dealing with where she is.

Originally Posted by LifewithSage 

Ugh, we have friends that own a business and they just recently asked me to help them out with various financial and accounting issues.  I ended up setting up a meeting and treating it the same as I do when I present to my company's executive team.  I kept it very professional and very factual.  I laid it all out with numbers and graphs and ratios and all sorts of things that they had never thought about.  I tried it keep it on as professional of a basis as I could.  I know your friend is trying to avoid it, but avoiding it could lead to financial disaster.  As a business owner she needs to be made aware of her dim outlook and also needs to be made aware of how to fix it.  I think if you focus on the numbers and how to improve them that would be best... I also think perhaps bringing trends in and helping her formulate a budget would help as well?  So, break down the P&L into each category showing the historical trends, formulate a plan to reduce costs or increase revenue or at least plan a budget around them.  You could perhaps give her the good news first... so, I have all sorts of way to increase revenue and reduce costs and here that is... and then tell her the reason you've found these is because her business isn't doing so hot... would something like that work?

This may work. TBH, though she's really great at doing the work that the business does, she's not really cut out to be an entrepreneur. I'm not sure how she's made it this far. She still is on 2009 (!) for gathering expenses and has just filed for tax extensions since then. She really doesn't want to put the time into the business side of things, but unfortunately she's made it tough for anyone to come in & take over because of the disorganization. Sigh. I may approach it as with any other client and see how that goes. Though I don't want my husband with me because this is my thing, he's so much better at the "here, cry on my shoulder!" thing.

[VisionaryMom]

She was looking to hire someone to do bookkeeping for her. At this point, that would be an expensive venture for a bit while this mess is sorted out. She started telling DH about her financials & that she needed to hire someone but didn't know who, etc. I offered to help her and to do so for free because I knew that she couldn't really afford to hire anyone. I am transitioning to a career in accounting, so this is a good opportunity for me, too (I don't want to sound selfless in this situation.) So, no, I'm not doing this without her "need" or even "want" for me to do it. It would be easier to say to a non-friend, "hey, you have to get it together here and be more responsible!" I've helped friends & family members with their finances before, but none of them have just not wanted to think about it at all!

LifeWithSage, yes, 2009! She said that she has 2010's receipts "somewhere," but I don't have all of them yet. I'm not sure at this point how much can be backtracked. I don't mind doing that work; in fact, I love it! But...I do need to figure out how to handle it while being both truthful and gentle. 

[LifewithSage]

Well then, perhaps you just have to call her up and say to her "I really feel as though you're avoiding the discussion about your company's finances.  I can understand the reason why as it's never fun to deal with this sort of stuff, but you and I really do have to get together and discuss this.  I've had a look at the information and while it's not perfect, it can be fixed.  So, when can you and I get together and go over what I've found?"

I'm an accountant and I have worked for a very small husband and wife owned company before and it was a struggle.  So many people that go into business for themselves really don't understand the importance of record keeping and the affect it has on their bottom line.  It seems to be that most just believe if the revenues are there, then the  business will survive... but that's not really the case most of the time.  Good luck with the discussion.  It's never easy, but it's great experience for you if you're attempting to move into the accounting world.

[tinuviel_k]

Honestly, I think I would give one more call and then mentally move on. No one can tie her down and make her face her financial messes, and it shouldn't be your job to run around after her trying to get her to face the facts when she is running fast in the opposite direction. I'd call one last time, and if she doesn't pick up I might leave a polite message something like this...

"Hi Annie (or whomever), this is Mary. I've been trying to get a hold of you regarding your business like we had discussed. I have not received a call back, so unless I hear from you in the next couple of days I am going to assume that you no longer want or need my assistance. If you do want to go over some solutions and possibilities please give me a call so we can set up a time. If I continue to not hear back from you I will assume that you'd rather not go over the data at this time. Either way is fine. Bye!"

That way the ball is in her court. If she wants help she can ask for it. If not... well, turning a blind eye is a mistake but it is hers to make.

[HollyBearsMom]

Originally Posted by tinuviel_k 

Honestly, I think I would give one more call and then mentally move on. No one can tie her down and make her face her financial messes, and it shouldn't be your job to run around after her trying to get her to face the facts when she is running fast in the opposite direction. I'd call one last time, and if she doesn't pick up I might leave a polite message something like this...

"Hi Annie (or whomever), this is Mary. I've been trying to get a hold of you regarding your business like we had discussed. I have not received a call back, so unless I hear from you in the next couple of days I am going to assume that you no longer want or need my assistance. If you do want to go over some solutions and possibilities please give me a call so we can set up a time. If I continue to not hear back from you I will assume that you'd rather not go over the data at this time. Either way is fine. Bye!"

That way the ball is in her court. If she wants help she can ask for it. If not... well, turning a blind eye is a mistake but it is hers to make.

totally agree and well worded.  Put the ball in her court and let it be.