2015 was, by anyone’s standards, a banner year. I won the EY Entrepreneur of the Year award for my region, was named to the Forty Under 40 in Cincinnati, and the company I ran, Legion Logistics, made #136 on the Inc. 500. Things were good. At 35, I felt as though I had reached a pinnacle of success and that it was only up from here.
In 2016, I nearly lost everything. Less than a year from crossing the stage to accept that Entrepreneur of the Year award, Legion was on the brink of bankruptcy, my personal relationships were disintegrating, and I was so sick that I could barely speak most days. It had taken less than twelve months for the universe to bring me right back down to earth, and I was fighting like crazy to keep what I’d built.
I started Legion in the basement of my house in 2009, and by 2015, we’d experienced that fabled hockey-stick growth — moving from zero revenue to more than $25 million annually. It was a wild ride, and my business partner (we were married when we started Legion, got divorced in 2012, and kept running the company together) and I were basically just hanging on the tail of the rocket ship, learning as we went. We thought the growth would continue forever, and we were building a company based on that.
Those first six years were a whirl of changes and growth — moving out of the basement, expanding twice more in the space we’d rented, adding employees and investing heavily in IT infrastructure. At our peak, we had 54 employees and we were plowing all of our profits back into capital projects.
Our story was unusual enough that we attracted a good deal of media attention, both locally and nationally (the feature on us in Inc. Magazine when we made the Inc. 500 was about how we were divorced but still running Legion together). We were in the spotlight and the personal accolades I won in 2015 put me squarely in the public eye in Cincinnati. The success of our company was definitely under a microscope, and the pressure was on to keep performing at the same level we had been. (Not to mention the need to support the payroll expense of 54 full-time employees.)
Since inception, we had used a small, local bank to handle all our financial needs. It was big enough to be able to support a credit line of the size we needed (we have to pay our trucking companies faster than our customers pay us, so we have to have a credit line to float payables) but small enough that the president of the bank came to our quarterly financial reviews. In mid-2015, we set out our plan for the next two years, involving capital investments and some hiring that we thought would be necessary for continued growth. The bank was on board, and gave its stamp of approval. Our income statement wasn’t going to be pretty while we went through this process, but within 18 months, we’d be back on the side of profitability.
Then our bank was acquired by a giant national bank. Our loan officer left immediately, taking his knowledge of our business and his support for our strategy with him, and the former president of the bank was moved into a marketing/figurehead role that left him with absolutely no authority to help us. The new bank decided they wanted nothing to do with companies in the transportation sector, that were under $100 million in revenue, and that didn’t have pristine balance sheets. We were out, three times over. They sent me a letter 45 days before our credit line was set to renew, telling us they were pulling our line and we had to find a new lender in a month and a half.
We were screwed.
In the best case, finding a lender to take over a $2 million credit line takes about 60–90 days. And that’s if you have a business everyone understands, collateral and really pretty financials. We had none of that — our business (freight brokerage) is one that not too many people have experience with; our credit line was based on our receivables, which some banks don’t want to touch; and our financials, as I mentioned, showed a company that was in the midst of a major growth phase with serious capital expenditures. We were going to have to find a bank that was willing to take a risk. (Spoiler: Banks don’t like risk.)
We knew the company was solvent, and that we were going to be right-side-up again within a year or so, but our belief in ourselves wasn’t enough to get a bank interested. We had to show the banks that we were making immediate moves to increase profitability and reduce expenses, and we had to show them that we were going to continue to acquire market share so our growth wouldn’t stall.
We had to craft the most convincing slide deck possible, while at the same time work furiously to improve conditions inside the business.
My partner and I started by slashing our pay to the bone. We cut to the point where we could make our mortgage payments and keep food on the table, but we took a sixty percent pay cut, effective immediately. Then we took a hard look at our payroll, our biggest single line-item. With 54 employees, we were incredibly top-heavy. We cut the entire marketing and recruiting departments, consolidating those activities into my duties, reduced headcount in support services, and let go any salespeople who weren’t hitting minimum targets. Those layoffs were incredibly difficult, and some of the folks we let go had been with the company since we were in the basement.
I consoled myself during this difficult period by holding firm to my belief that my number one responsibility was to create, and maintain, a business that was solvent, so all our remaining employees would have a place to come to work every day. I also tried to refer folks who were leaving to other jobs, and give recommendations whenever possible. I didn’t want anyone stranded without a job if I could help it, and most of them landed someplace new pretty quickly. (Most of them still won’t speak to me if they see me out in public, though.)
Then I got to work on the presentation we’d have to make to the banks — the rundown of how we got where we were and how we were going to get out of it. I called it the “Full Dog and Pony Show,” and it was nothing if not thorough. Financials, graphs, charts, detailed explanations of future plans, summaries of the actions we’d already taken, etc. The whole presentation ran to about 90 minutes, plus questions, and I was prepared to give it to every single bank that would take a meeting with us.
I just had no idea if it would work.
In the course of three months (I was able to beg the bank kicking us out the door to give us an extension on finding new financing, so we had some breathing room), I met with every single bank in Cincinnati, and some from much farther away. Every day, bankers would come into our conference room, sit down, open their padfolios, and listen to my pitch. About halfway through the process, I got a case of laryngitis so severe that the only time I could talk was when I forced myself to in meetings. The rest of the time, I would just squeak and point. Most meetings I did with a fever over 100.
It was exhausting. I was literally selling for my life, and to save the business I’d spent six years building. I have never pitched harder or been more convincing or bent and scraped more than I did in those meetings. It was incredibly humbling — I walked into that conference room every day to eat crow, admit the mistakes we’d made, and listen to bankers who’d never owned a business or tried to build anything tell me that I was running a business that was, essentially, worthless. Never mind that we were cash flowing enough to support our current line, and that we were projecting a profit in 2016, and that we had made some really hard, but necessary decisions to improve the financials. In the eyes of the banks, Legion was worthless.
In the end, after dozens of presentations and hours (and hours) of back and forth, not a single bank was interested in financing Legion. Every single one turned us down. What I had feared when our lender told us they were pulling the plug was now a reality — if we couldn’t find someone, somehow, somewhere, to finance us, we were done. We’d have to declare bankruptcy and without a solid credit rating, we’d lose all our business, and the partner carriers who had worked with us for half a decade would walk away.
On the day the last bank said no, my business partner and I finally admitted what we’d been afraid to say out loud to that point — it was probably over. I went home that night and stared at the ceiling in my bedroom, thinking about what I would have to do next. Sell the house. Sell the car. Find a job. Hide in shame.
It was painfully obvious to me that what I had suspected for so long was actually true — I was a fraud, a terrible business owner, and a charlatan, and everything that was happening to me was a result of me being a total loser who lucked into six good years and was now receiving her great, universal comeuppance. I had pretended to be good at business for quite long enough, and now it was time to get back to where I came from — the working class.
It was time to give up.
I didn’t give up, of course. (The fact that I still own Legion is a bit of a spoiler here.) We had a great partner in the financial field who found us some “creative” (also known as “expensive”) financing that was able to bridge the gap for us for 18 months while we got our shit together. By early 2018, we were back to looking for traditional bank financing, and the banks were once again competing for our business. (I’d like to say I’m not bitter about the whole experience, but I am. There’s a part of me that thinks that if you didn’t want Legion in 2016, you don’t deserve Legion in 2019, but then I look at the interest rates and give in.)
Legion is leaner (we have half as many employees as we did in 2015) and smarter today, and so am I. When I won the Entrepreneur of the Year award in 2015, I had a sneaking suspicion I didn’t deserve it — that I had won because they wanted someone young, or a woman, or someone in logistics to win — but after the turmoil of 2016 and the three years of incredibly hard work that have followed, I feel like now I do deserve that accolade. When you are growing, and things are easy, you don’t have to be good at business. You can just hang on and reap the rewards. But when things get tough, you have to be tough, too. And you have to get smarter, and more nimble, and a lot more humble. I know now that I’m a damn good business owner, and that even though I’m going to be challenged all the time, I’m up to the task.