“It felt like I was crossing the street and got hit by an airplane.”
RODNEY MEEKS: CEO Credit Consulting Services
DAMAGE CONTROL 101: Rodney Meeks, Salinas CA
Rodney Meeks is a second generation owner of a debt-collection business. He has spent his whole professional life watching how people deal with financial crises. On March 17, when the order to shelter in place came through, Rodney pulled the emergency brake on his business, made a quick assessment of what was absolutely essential, and put everything else on hold. Staying in business meant doing everything he could to keep monthly expenses below monthly revenues.
CASH IS KING
1. Cut Expenses:
He immediately stopped all marketing for the company and trimmed back his SEO, saving himself nearly $5,000 a month. He put two-thirds of the staff on furlough. He says he was watching to see who was busy and who was ‘acting busy.’ “I needed to make sure that anyone on staff was bringing in income at least equal to their salaries.”
2. C-Corporation to S-Corporation:
One factor that allowed him to hold onto cash was a recent decision (made before the crisis) to switch from being a C-Corp to an S-Corp. The result, he says was a huge cut in taxes. He put that savings into the cash on hand. That gave him a cushion to fall back on in this crisis.
3. Don’t get divorced; don’t get sued:
Rodney says if you want to avoid financial ruin, don’t get divorced. Given his position as a debt collector, he understands only too well that one of the top reasons people end on on his call-list as debtors is the financial havoc which is so often the result of divorce. The other killer is serial lawsuit filers. There are some people who routinely file lawsuits rather than resolve disagreements directly. These suits can go for a very long time, racking up gigantic attorney fees and cost more to defend than they were worth. “Watch out for them!” says Rodney.
HYGIENE… HYGIENE… HYGIENE!
Some businesses can allow their staff to work from home, but not Rodney’s. His staff has access to highly confidential information on their computers and he couldn’t risk any accidental leaks on computers in less secure locations. This meant his staff needed to come the office, and Rodney needed to make sure the office was safe.
1.Unlimited sick days:
Anyone feeling ill was sent right back home. The risk of infecting the rest of the staff could shut down the entire office.
2. High quality cleaning service
Rodney put money into disinfecting the office space every night, and regularly fumigates the offices.
3. Separate the cubicles
In regular times, the staff was tightly packed together; now he is turning storage space into work space and keeping people further apart.
INDUSTRY ASSOCIATION MEMBERSHIP
Rodney is a member of a national advocacy organization, the ACA (Association of Credit and Collection Professionals). Aside from the typical benefits of keeping up with regulations and trends, he joined a tiny sub-group (about half a dozen) called a benchmark group. There are many benchmark groups with the ACA; the members become mentors and advisors to each other. Each member is a small business person rooted in their own local communities; but by sharing all their financials, they give each other heads up to what’s going on, what problems they’re facing, and solutions they’ve devised. They get the big picture by sharing information, and Rodney says this has been a lifeline during the current crisis.
WHAT CHANGES WILL THIS CRISIS BRING? AI IS TOP OF THE LIST:
Clients will be able to go to Rodney’s website and work out a plan by themselves for paying debts. Once AI is developed for his industry, it will revolutionize his work and his staffing.