Don’t despair, sick businesses: The doctor is in
Aug 2, 2007 (New York [Long Island]) — By Ambrose Clancy

LIBN, Friday, July 27, 2007

If you just treat the symptoms, you'll lose the patient.
Or the company, according to Roy S. Ryniker, a business doctor who consults with companies that are feeling woozy or coming down with a terminal disease or something in between. Since 1989, Ryniker's operation, Reorganization Alternatives Group, has helped firms restructure, sell themselves off or merge with other companies.

Ryniker started out with no clients, although he did have a healthy Rolodex, thanks to years working for Touche Ross, a financial consulting group specializing in underperforming firms, and British-based merchant banking firm Schroder Wagg. In his first year he made about $100,000, he said; now, 18 years later, he won't say what he's pulling down, noting only that it's "significantly more."

From the beginning, Ryniker's growth strategy was to "focus on just a couple of clients, doing a lot of work for them as opposed to doing small projects with a lot of clients." He began with small to mid-sized companies and still works in that range, but now some of his longtime clients businesses are larger – and he's usually busy handling four or five clients at a time.

In a business where referrals are everything, he has worked to develop a reputation as a take-charge guy who can turn a company around. Treating symptoms is the greatest mistake a company in trouble can make, Ryniker said, noting his first move is trying to "get a sense of what the problem is."

"Owners often say, ‘I don't have any cash – if only I had more money, everything would be fine,'" he noted. "My response is, ‘Why don't you have sufficient resources?' And then I put in a capital management program."

Underperforming companies are usually so busy putting out fires and solving problems they've stopped looking for opportunities, according to Ryniker. "I look at the financial resources, the people the company has, the skill sets of the people and the physical assets like machinery (and) equipment, and then say, ‘What do we do poorly? What are we going to stop doing?'" he said.

Resources, he added, are then freed up for growth opportunities.

Many small to mid-sized companies "have a lot of data but not a lot of information," Ryniker noted. He gave the example of a company that could look at overall profitability, "but often can't tell you the profitability of a division or a product or service line," he said.

One client who got well after Ryniker's diagnosis and treatment is Peter McCree, president of MBH Solutions, a New Jersey-based software company. "When you're in a downward spiral, you're not thinking of restructuring, you're just putting your finger in the dike and not even considering new business," McCree said. "Roy was helpful in negotiating with our lenders to get the borrowing restructured."

For owners interested in selling their businesses, Ryniker employs the same tactics. "I want to improve the business, driving up the evaluation before selling it," he said.

One such company was Woodbury-based Bath Petroleum Storage, a company that stored liquefied petroleum and was involved in legal wrangling with the state Department of Environmental Conservation. Ryniker came aboard as Bath Petroleum's president, settled with the DEC and turned a losing company into a profitable enterprise, to the tune of $3 million annually. He eventually negotiated the $31 million sale of the company, he added.

Ryniker continues to grow his business by working not just with under-the-weather companies but healthy businesses that want to acquire other companies. "I talk to them about what their criteria acquisition should be," he said. "I help them identify the target and what price they should pay, how to negotiate and how to finance the sale."