The Day The Bank Cut Off Supply

It was the early nineties. Big shoulder pads were on the way out but I still wore stone-washed stretch denims. At 28 I was already a six year real estate veteran, running my own agency and going places, or at least that’s the way it appeared on the outside.

After a long, rough year working in a market struggling under the burden of double-digit interest rates I needed a holiday. We packed our bags and headed to Busselton for a few weeks. I was excited. No phones, no pager (it was the nineties remember), no home opens. Just relaxing and having fun with friends.

But I harboured an uneasy feeling, a feeling that something wasn’t right. For months I’d been concerned about my property manager. She was slow to produce bank reconciliations and when she did they contained errors and adjustments that didn’t quite ring true. More disturbingly, she struggled to maintain eye contact. I’d ask her a question and the answer was often delivered while she glanced fleetingly at the ceiling or the wall behind me. They were warning bells I chose to ignore.

After I returned from holidays the property manager announced she was leaving. I was in equal parts glad and unhappy. Glad that I was now free of someone that made me so uneasy but unhappy she was leaving in such a hurry. That’s business I thought and turned my attention to recruiting.

It hit me the day after she left. The phone calls, one after the other, from owners missing money, from tenants waiting for bond refunds, from tradespeople demanding payment. By the end of the second day my message to callers was simple: I’m in a mess, I’ll fix it, I don’t know when but I will. There was no point sugar coating it or making it appear better that it was. It couldn’t get much worse.

In the days and weeks that followed the picture became clear and the storm clouds began to form. There was a hole in my trust account of somewhere north of $85 000. That was $85 000 of other people’s money that I owed. Right now!

I scrambled to replace the missing funds. I sold our unit and dumped our meagre equity into the trust account. Then my car was sold to stop the repayments. For months I carted buyers around in Rita’s tiny blue Ford Laser L. It had vinyl seats and looked every bit its age. Shortly after, in an act of trust and generosity, my mother-in-law allowed me to mortgage her house. The money was dumped into the trust. They were dark, dark days and they were soon to become darker.

In the months previous the banks had courted our favour offering loans and loans to service loans. They’d taken us to lunch and expressed their confidence. At least the banks were on our side. Or so we thought.

But that wasn’t to be the case.

I remember the day as clearly as if it were yesterday, the day the bank cut off supply. I was running a sales meeting, standing in front of the sales team, urging them to make more calls, teaching them how to overcome objections and handle rejection when, from the back of the room, a man walked in. It was my accountant. He motioned me towards him. I ignored him and he left. Moments later he returned, this time frowning ominously, beckoning me with an urgency that was hard to ignore. But I did. The most important thing right then was to get the sales team pumped up for that was our future cashflow. He left, but again he returned this time making a sign with his finger that imitated slitting his own throat with a knife. Right then I knew there was something that needed my attention. Right now!

After wrapping up the meeting with all the enthusiasm I could muster I made my way to the accountants room. “The bank’s bounced two cheques”, he said. “Which ones?” I asked. He named my two top sales reps. I knew immediately what that meant.

My top rep had come to me from an agency who had gone bust. Their principal had stolen trust funds, the business went to the wall and he had arrived at my door owed thousands in unearned commissions.  After numerous bounced cheques followed by promises that everything was going to be ok there was one thing on which he was crystal clear: If ever I bounced a cheque he was gone, no questions asked. Without him my business was sunk and with the bank about to make that a reality I had minutes, not days, to act.

I stood there in shock. The accountant shook his head. Creativity was never his thing. The admin staff tapped on their keyboards. I needed the funds to cover the cheques right now. And then an angel arrived. Unexpectedly, and with the grace and compassion of a saint, one of the admin team threw my business a lifeline. “I’ll get a cash advance on my credit card. That’ll cover it”, she said. With a gratefulness that has lasted to this day I accepted. Right there, at that very moment, my business was saved. Of that I have no doubt.

In the weeks and months that followed our cashflow slowly improved. There were some dark days and hurdles to overcome. But that I was able to overcome them was only possible through the grace of an angel with a credit card, through the trusting generosity of my mother-in-law, through the love and support of my wife, and through the efforts of those on my team at the time.

I learned a lot from that year not the least of which were the importance of bank reconciliations, tight systems and accountability. Until that year they were but lessons in a text book. After that year it was a very different story. But that year also taught me to trust my instincts and listen to my own counsel and that success is measured and determined by the quality of my relationships. It’s a year that, in a strange way, I’m glad I had.

Photo credit: doortoriver on Flickr