The power of collective wisdom when you’re up to your ears in debt.
NORCROSS, GEORGIA
In 1996, at 35 years old, Alf Rhea left his job at a large corporation and bought Business Innovations, a small promotional distributer that makes swag for B2B companies.
“I had already been successful leading a large company for many years,” chuckles Alf. “I was kind of a golden boy.”
But Alf quickly discovered that leading a large firm isn’t the same as running a small one.
“We had a lot of inefficiencies,” remembers Alf. “As a small business owner, I was unaware that we were paying too much for health insurance. I also had to worry about inventory, and we had systems that were obsolete.
“Honestly, we were just trying to survive.”
Another huge obstacle for Alf was funding the company. Without the money to purchase it outright, he arranged a leveraged buyout, using a significant amount of borrowed money to meet the acquisition cost—a big risk.
“One of my friends said, ‘You ate an elephant,’” chuckles Alf, “and I did.”
The financial pressure heightened when Alf’s bank was acquired, and the new bankers told him that they wouldn't renew his line of credit. Even though Alf hadn’t missed a payment in four years, he didn’t fit their new loan profile.
Alf remembers the conversation vividly: “I was eight months away from paying off my acquisition loan when these men in suits came to my office.
“Sitting around my conference table, I said to them, ‘If you’re not going to renew my line of credit, you will put me out of business.’ And I remember putting the keys on the table in front of them, saying, ‘We have $500,000 in inventory, and about 25 employees here. It’s up to you to shut it down.’
“I said to them, ‘If you’re not going to renew my line of credit, you will put me out of business.’”
“Then, I sat there quietly. After three minutes of silence, one of the men said, ‘Okay. But in eight months, you need a new bank.’ And they walked out.”
Despite the extension, Alf exhausted himself trying to keep the company afloat. For him, not only was his financial well-being at stake, but also his reputation as a business leader.
“I was working like a dog,” remembers Alf, “coming in on Saturdays. I wasn’t having meaningful, deep relationships with my wife or family.
“To everyone else, I was fine: a good Christian guy. But I felt alone, and I kept it locked inside.
“I remember one of my friends said, ‘Alf, I sense that you’re operating out of fear,’ but I was too proud to admit it. On the one hand, I felt shame that I might embarrass my reputation by failing in my new business; on the other, I feared being unable to provide for our family and losing our house. I also worried that I wouldn’t be able to pay off the former owner.
“I feared being unable to provide for our family and losing our house.”
“Year after year, I had to renew my annual credit line loan, but I wasn’t making any progress in paying it down. Finally, my wife asked, ‘How long are you going to keep doing this?’
“I felt trapped, and I had nobody to talk to.”
Right around that time, a businessman from church, Tom Lutz, informed Alf that he was starting a Christian business group, which later became a Convene team. Alf saw an opportunity to get some advice.
“I knew that I needed help,” reflects Alf. “Sometimes, when you talk to people, they just give you two aspirin and some Bible verses and tell you to suck it up.
“Also, a lot of the time, preachers don’t understand the business side of what you’re going through. So when Tom said that he was starting this group, I decided to try it.
“Even though finances were tight, I wanted to try it for a year. I needed help.”
Alf was astounded by the collective wisdom and networking power of the team. It seemed that no matter what he was going through, someone from Convene could help.
“As I brought my issues to the team,” remembers Alf, “it seemed like someone always had a solution.
“As I brought my issues to the team, it seemed like someone always had a solution.”
“They would say, ‘I got this bank guy’ or ‘I know this guy’ or ‘You don’t have to do this’ or ‘You could split the building and not be on the loan personally’ or ‘I saved money with this IT guy.’
“That went on for years, so it wasn’t like a million dollars came pouring out of the sky. But as we plugged up these small holes, we worked toward righting our sinking ship.”
Alf recalls one incident that was particularly impactful. His controller had been telling him for years to dump a particular military program on which he said the business was losing money, but Alf wouldn’t listen. Finally, Alf decided that he would bring the issue to his Convene team and let them decide.
“I told him, ‘I’m going to invite you to my Convene team. You present your case, I’ll present mine, and they'll vote. If they vote for me, then you quit bringing this up.’ He agreed.
“After we presented our cases, my Convene team voted: 10 to 0 in favor of my controller.”
Alf laughs as he remembers the experience: “He’s an introvert, so he didn’t brag to others. But he said, ‘I’ve been telling you to do this for years.’ So we did it: I fired a branch of the US military, and suddenly we had $130,000 that had been sitting in dead inventory coming in, and that was just one year.
“After it all shook out, that decision saved us $60,000 per year after the initial $130,000. And it never would have happened—we'd still be doing that program today—if it wasn’t for a 10 to 0 vote against me from guys I respect.”
Five years after joining his Convene team, Alf arrived at a moment he’d never imagined.
“If you would have told me five years into Convene that I’d get my line of credit paid off, I wouldn't have believed you,” says Alf. “That line was $800,000, and I thought it was permanent,” he chuckles. “I never thought I’d touch that one.
“I feel liberated.”
Now, with his debt paid off and business more steady, Alf can focus on mentoring the younger Convene members.
What does he tell those who are on the fence about joining?
“Don’t worry about the money—it'll take care of itself,” says Alf.
“I joined during a horrific time, so there’s never a ‘right’ time. God has used this team of people in my life for eternity.
“You can’t put a price tag on that.”
Alf Rhea is the President of Business Innovations in Norcross, Georgia.
Disclaimer: Some quotations have been edited for length and clarity.