A Client reminisces on a 1984 business rescue I did

What follows is an extract from a book written by a former client and now valued friend. It is the life story of Linda and her husband Phillip. This extract relates my involvement in the recovery of a failing business.

“Our accountant had persuaded us to take out an endowment mortgage , which was meant to provide us with a pension of ? over 50,000 pounds At the end of the allotted time. from the bank's point of view it meant we were not paying off any of the capital loans because this was at the time of the government's black Wednesday. Our mortgage payments seemed to double overnight: we were now having to pay 18% on our loan and things were getting very tight. The bank was also threatening to take our overdraft facility away; we even received a letter from them telling us we would need to win the pools in order to pay them back.

?It was at this point that we approached a firm, telling them of our dilemma and desire to move our mortgage from an endowment which we had initially been advised to take out to a repayment mortgage as we never see it getting any? less. We were told they could not help but would put us in touch with someone who could. his name was Ben.

?This was the beginning of a very stressful time.? Ben went through our books with a fine toothcomb, checking and rechecking everything. I had kept records of all overnight stays and meals at Yorkway, making graphs by hand as we did not have the benefit of a computer at that time. It was Ben indeed who introduced us to working on the computer and started me on a bookkeeping program called Quicken, which meant we could have up to date figures at the press of a button.

?We had started this business with just one cleaner and one other front of house person, Barbara. She was excellent as far as I was concerned. As we got busier she would stay and help no matter how late it was, or would come in on her days off if for any reason I could not manage alone. The only time I saw her have a meltdown was when she came in one day after obviously crying quite a lot –? she was a farmer's daughter who quite happily sent sheep and pigs to market – and when I asked her what was wrong she burst into tears again and said her budgie had died. she supported me whilst Ben? was overseeing our business, so I was heartbroken when he told me I had to make her redundant. He threatened to do it if I didn't, so I had no alternative but to sit and explain our situation and tell Barbara that we could not keep her. This really was a cruel time, but at least she was entitled to a redundancy payout.

?We were summoned into the bank and we were sure our overdraft facility was going to be withdrawn, and that the rug was going to be pulled from under us. This would have caused us great hardship as we had spent the money on the improvements and buying the extra land for car parking. but Ben, who certainly knew how to handle bank managers, came with us and supported our case, so much so that we managed somehow to get a stay of execution. He still visits us and often talks about how that meeting changed from one of total bleakness to optimism. Over the next year a comprehensive plan was put in place..

The bank manager was hand in glove with our new accountant. Ben, having sacked our previous one, and whatever we did they? monitored to the nth degree. Philip, who had never seen eye to eyea with bank managers, this one, in particular, was made to sign a deed? of retirement more or less stating that he would have no input into the business. Inevitably life was very fraught, so much so that I thought our marriage would suffer. This also had a detrimental? effect on family life.?

To say we worked hard was an understatement –? we made the most of anything and everything that came through the door.” we can't do that” was not in our vocabulary”, and although Ben was on hand to criticise everything we did, he was very supportive and made sure that we wear all in? agreement as to which way the company was going

?The Yorkway Motel Ltd. was formed? with Philip and me as director's and Peter (our son) taking over as managing director under the tutelage of Ben.

The Business was divided into three separate departments one for accommodation, one for the restaurant and one for the public bar, which meant each section could? earn up to the VAT threshold without having to register. A visit was made by the VAT Man. who didn't impress when he arrived sporting a colourful tie sporting Snoopy the dog.Ben? made short work of him. “

My note

The Yorkway Motel has gone from strength to strength, expanding from the original9 self-contained chalets to 19.? it also has a development of fixed homes. despite Covid it is now adding a business park to the premises. All in all, they have had a very successful development since I first was engaged by them in 1994.?

Linda’s book is very readable. It was published privately with the sale proceeds going to charity. It can be bought directly from the Yorkway Motel

Ben Clarke M.C.M.I.