Robert Thaxton had a problem. As president of Carolina Restoration & Waterproofing Inc., a Creedmore-based concrete-repair contractor, he was good enough to land restoration jobs for high-profile structures like the Wright Brothers Memorial in Kitty Hawk. He just couldn't fix his own company.
Cost overruns and a shortage of winter work left it low on cash. By the end of last February it was tens of thousands of dollars in debt. Thaxton even considered selling the $2.5 million business. "We were so busy lining up bids and managing projects we didn't have time to manage our finances properly," he says. "What we needed was a full-time financial officer, but we couldn't afford one."
So he rented one. His lawyer put him in touch with Tatum CFO, an Atlanta-based consulting company with offices in seven Southern cities, including Charlotte and Raleigh. It provides veteran financial officers to companies in need of a quick fix. Think of it as an upscale temp agency. Brothers John and Douglass Tatum, both former financial execs, founded the company eight years ago.
Some of their 61 "partners" - which is how they refer to their temps - are former CPAs with Big Six accounting firms. Others were CFOs, such as Robert Consoli, who was at American Studios Inc., the Charlotte-based portrait-studio chain, before it was bought by rival PCA International Inc.
Clients cough up $2,000 to $5,000 a month for the hired guns, depending on how many days a week they work. Then there are retainers of $250 to $750 a month that go to Tatum CFO and performance bonuses shared by partners. The CFOs usually serve two or three companies at a time.
Thaxton got Duane Tolan, one of four Tatum partners in the Raleigh office. He has 20 years experience in finance, including stints as a CFO at Rocky Mount-based Tuscarora Corp., an investment company, and as a CPA in Ernst & Young's Columbia, S.C., office. Thaxton hired him in June to work Mondays and Wednesdays.
What Tolan found was an able company "with a severe cash-flow crunch," he says. "It was life or death as to whether it should continue or not." The business took on too many jobs, rarely distinguishing between money makers and losers, and it did a poor job tracking the impact of seasonal trends, inefficient labor use and spiraling administrative costs.
Tolan organized a management retreat at a lake house north of Creedmore for Thaxton, partner Steve Wright and three project managers. He asked them to identify projects that...