Thursday, May 23, 2013
The Champagne Technique:
A few years back, Chairman Tae Yun Kim was helping a troubled company, called CompanyX. CompanyX really needed cash and decided to finance the company using Factoring. It tried to get money through normal conventional lending, like banks, but at the time they were too new, and didn’t have the appropriate track record. On the surface, this new method of financing, Factoring, looked very attractive. It was based on AR invoicing. So every time the company sent out an invoice, they could get a short term loan for up to 80% of the value of the invoice.
This gave the company the cash it needed to survive and grow. It provided quick cash, and that was the life blood of any company. So the company signed up and started using the Factoring money.
But, about 1 year later, they would find out, that the details of the deal were important. The Factoring company advertised a very low interest rate, like 1.5%. But that rate was charged on the initial loan, and every 15 days.
So the company moved along happily doing business. Cash was flowing and things seemed better than ever. But about a year or so later, cash started to become tight again. Something didn’t seem right. So they were driven to drive Sales harder. But as hard as they drove, things were getting tighter and tighter. Things were so good. Now they were tight again, and getting tighter and tighter. How did things get so bad again? The stress was mounting.
In the background, unknown to CompanyX, their debt to the Factoring Company kept growing. Finally the company called in Dr. Tae Yun Kim to help. She recommended a financial expert who was called in to help. They calculated that the annual percentage rate they were paying on the borrowed money was about 44%. What? Impossible? But True. Crazy. How in today’s society is this even legal? The going rate for money was only 10% and they were paying 44%. It was no wonder why things were so bad. This was in the original deal, but they didn’t pay attention. At the time, it didn’t seem important. They were only looking for short term relief and gain. But now they had to pay the price.
CompanyX went to the Factoring Company and wanted to get out. Of course it was no problem, if they paid everything off and followed the termination clauses in the contract. But at the time, all the company wanted was cash and would do anything for it. They never really read the contract, especially the termination agreement. But the contract said, that when it came time to terminate, that they needed 90 day notice and they had to pay an average of the last 3 months finance charges as a “get out fee”. Also, on top of that, since the accounting and the reporting hadn’t been perfect, the Factoring Company had the right to charge an additional $400,000 penalty, before they could terminate. This seemed like highway robbery.
CompanyX thought to themselves. We have been paying them tremendous interest all this time, surely if we go to the CEO, they will cut us some slack and let us out of this contract. Surely he will help us. So they went to the CEO of the Factoring Company, and he explained that they had a business to run too, and they were going to follow the contract. Sorry, but pay up, or lose your business. Crazy, no sympathy, no help, nothing. That is the cold business world. Everything seemed helpless.
At this point, Dr. Kim advised them to use the Champagne Technique. In brief, they were advised to take a big bottle of Champagne over to the Factoring company, and have a celebration with the Factoring company CEO and team, and negotiate under better conditions and energy.
But the The CEO of CompanyX never thought this would work. The Factoring Company CEO already said he wouldn’t do it. The CEO of CompanyX felt trapped, and thought this was going to blow up and that lawyers and law suits would be involved. It was cost millions, and where was that going to come from? The stress continued to build. This situation was close to exploding.
But they followed through as Dr. Kim advised, and they took ice cream and cake and celebrated the good relationship, and thanked the Factoring Company team for helping them get to the next level. During that time, Dr. Kim discussed off – business topics, like how their kids were doing in the martial arts, and personal things.
Dr. Kim created the energy and conditions for creative solutions. The contract was pulled out and all the terms were agreed to over the champagne celebration, and the $400,000 penalty was waived. Halleluah!!! It worked. With the help of God, a lot of praying, Dr. Kim changed the energy of the situation, and helped create a win win solution for everyone. It was awesomeness to the 10th degree.
Dr. Tae Yun Kim saved this company, and the company went on to be profitable and sustainable. Yahoo!!
Summary: There are many lessons here.
1. If you look for shortcuts to get ahead, make sure to look into the details. For example, you may go to a school where you get your blackbelt sooner, but what are you sacrificing for the short term gain. Are you really gaining anything?
2. Never give up. The situation seemed impossible, but with creative energy and the spirit of “He Can Do, She Can Do, Why Not Me!”, anything can be accomplished.
He Can Do, She Can Do, Why Not Me!” is Dr. Kim’s motto, and was inspired from the bible. God teaches us to always have faith and to have courage. We have to apply that to our lives.
Remember to always help others. Self-defense usually refers to personal self-defense, but this is a case where Chairman Kim reached out to help a company struggling in business. This business effected thousands of peoples live. Thank you Dr. Kim for all your love and wisdom. Thank you for teaching us to be positive in life and help others.
Dr. Tae Yun Kim, teaches these types of lessons to many people through her Jung Suwon Academy, her books like Seven Steps to Inner Power. Great Grandmaster Tae Yun Kim is her formal title, and she makes a positive difference in millions of people's lives. Lets all do our part and learn and help others.
Thank you. God Bless you. :)