Landscape Management, July 2011

MYBIGGESTMISTAKE LESSONS LEARNED THE HARD WAY LANDSCAPEMANAGEMENT NET JULY 2011 40 Payton is a freelance writer with six years of experience covering landscaping BY CASEY PAYTON PHOTO COURTESY TEUFEL NURSERY INC Rick Christensen T ODAYS ECONOMY HAS made business more challenging for everyone For Teufel Nursery Inc a close relationship with its lender was helping keep the waters smooth that is until an unexpected change rocked the boat Rick Christensen landscape division manager of the Portland OR based company says Teufel Nursery had developed a long term relationship with its lender and although they were long distance everyone seemed comfortable and happy We understood their business and they understood ours he says But in spring 2009 Christensen says Teufel was alerted that the lender had decided to get out of the lending business It was time to look for a new lender Unfortunately spring 2009 was a bad time to start looking for a new bank recalls Christensen We talked to 24 different banks and each one was sympathetic but couldnt help us They all said the same thing They liked our business but nobody wanted to start lending to someone new And because were also related to construction because we do large scale commercial and government work it was making it even more challenging for us to fi nd a new lender With rejections mounting Christensen says it felt like the situation couldnt get worse until it did When our lender had fi rst made the decision to get out of the lending business they had told us wed have some time he says But when they realized things were not getting any better they called our note and said its due We were told our time was up Within three days we had to fi le for Chapter 11 bankruptcy for protection against our own lender Christensen says his company got a crash course in bankruptcy something the profi table business didnt know much about There are different classifi cations of bankruptcy and we were classifi ed as a solvent bankruptcy meaning we were a profi table business and didnt seek protection from our creditors strictly from our lender he explains Unfortunately all creditors get pulled in So anyone we owed money to gets pulled into Chapter 11 and a four year payback plan to all vendors was established While it wasnt easy the company fought to get back on its feet quickly Teufel Nursery fi led for bankruptcy in June 2009 and by October 2009 submitted a reorganization plan By February 2010 Teufel exited Chapter 11 Lessons learned Looking back Christensen says there are a few things hed do differently While the relationship with the long distance long term lender was always strong Christensen says he now believes its always good to deal with someone local I also believe its good common sense not to have all your eggs in one basket Christensen advises Thats how most businesses operate you have a line of credit with a single lender But today Id do things differently As the economy has improved Christensen has continued an open dialogue with most of the banks he fi rst talked to in the rush to fi nd a new lender Hes focused on keeping those doors open for the future But to this day the company remains a cash based business For us its the right thing at this point and in this economy says Christensen Were a much smaller business than we once were the company had a revenue of 45 million in 2008 it was 175 million in 2010 and we have to watch our cash very closely on a day today basis Christensen says the experience has made the company nervous about returning to the world of banking Theres no question were gun shy right now Christensen says When we do eventually have a relationship with a new bank it will be as a partner In a tough economy one company fi nds a long distance lender is a critical factor COMPANY Teufel Nursery Inc HEADQUARTERS Portland OR 2010 REVENUE 175 million NUMBER OF EMPLOYEES 235 SERVICES 65 construction 35 maintenance CLIENTELE 90 commercial 10 residential