I have seen a lot of great entrepreneurs go out of business as of late. It's wierd how it happens. These people have VERY creative minds but find a way to end belly-up. The other thing is that they'll start something else up just as quickly and make oodles of cash once again because they are great at what they do, just not from a management standpoint. I'm not sure if this is what is happening at HMS, I'm simply posting on how most business get in financial trouble and eventually go out of business.
1) They develop the business and have a good thing going.
2) They start making $ and start spending it as soon as they make a buck.
3) They do not reinvest into the company and safeguard it against hard times, problems, slow times, unexpected expenses, outside influences, laws or other issues and find themselves playing catch-up at some point.
4) They grow too fast and do not grow the company with it (space, people to help manage it, etc). Their thinking is that they can continue doing it, why not, it means more $ for them.
5) Great success catches up with them and they simply have too much to do and forget to do the simple things like pay bills, etc. They forget once, 20 days late, forget again, 60 days late..... For an entrepreneur, paying bills is the last thing on their minds, really.
6) Over years they develop bad credit with their suppliers and have to pre-pay for all of their inventory.
7) The suppliers now see you as a dead beat and stop holding inventory for you until you pay them first. This leads to longer turnaround time. Once they could order stock and have it in 2-3 days. Now, they have to order it, pay for it and have it made and shipped in 2-3 weeks.
8) Company then begins to ask for customer payment up front so they can pay their supplier so they can get your product shipped to you.
9) The company starts looking for other suppliers because of their bad debt. They find them but quality of the inventory drops and soon they develop the same relationship with the new supplier.
10) The business owner, with problems with his/her suppliers, now goes back to what they know best (which they think will keep their business a-float during this rough period). All other aspects of the business fall to the way-side. They simply can not afford to pay for extra help now.
11) Word gets out through customers that the business is in trouble, quality is down, not delivering product, etc.
12) Customers finally stear clear of the company's CORE offerings and the business suffers until bankruptcy results.
This is a typical life cycle of a business. Some stop at # 3, some go to the very end.