Navigation path

Small and medium-sized enterprises (SMEs)

Friedrich Stummer

2nd chance entrepreneurs in action

 

 

Friedrich Stummer

Austrian restarter

"Der Ybbstaler" Verlags GmbH

AT - 3340 Waidhofen/ Ybbs

The first business

When Friedrich Stummer took over management of the printing shop Stummerdruck GmbH with his brother in 1983, the business had already been in the family for about 60 years. With a reputation for high quality and an international client base, the company was best known for publishing the long-established Austrian regional weekly "Bote von der Ybbs", in print since 1876.

Pressure to innovate forces a move

The printing business has changed beyond recognition in the last few decades, with the introduction of new technologies. To stay competitive and safeguard quality, the company had to invest constantly. Because the printing shop was housed in a historic building in the centre of a small town not suitable for the new plant, it had to relocate to accommodate the necessary investments. The brothers began to plan for a move to a new location outside the town centre.

It was planned to finance the new premises partly by renting out the old one. A tenant was found, and the brothers set about implementing the project. Unaware of what they were in for, they took a fateful decision. To provide their business with the large amount of liquid capital needed to fund the new location, they raised a personal loan and bought the old premises from Stummerdruck GmbH.

The cost gap widens

With the financing concept arranged with the bank and the new location found, construction work began in the spring of 2001. But many small overruns led to total costs that were distinctly over budget. To make matters worse, sales fell short of expectations thanks to the ailing economy, sluggish advertising business and large companies cutting back on their marketing spending. With its international client base, the terror attacks of 11 September 2001 also shook the company.

Insolvency: Christmas brings closure

When the brothers realised that the sales growth they needed could not be achieved in the foreseeable future, they contacted the bank. But the bank was prepared to negotiate only if the brothers' aged parents assumed personal liability. "We did not want to do that to our parents", recalls Friedrich, "and we just could not believe that the bank would not consider other options". The brothers worked hard at rescue scenarios, but the cost pressure increased each month until they had to file for insolvency in September 2003.

The administrator confirmed that the company was worth rescuing, and another firm in the same line of business was interested in joining. "The last negotiations with the bank and the interested company were scheduled for two days before Christmas", Stummer recalls. "A settlement seemed within reach". But the appointment yielded no results. The company was closed and the administrator realised the remaining assets.

"I felt both sad and relieved," says Friedrich. The closure of the long-established family business was very painful. But it marked the end of exhausting negotiations and repeated disappointments.

Fresh start - manageable burdens and plenty of support

Friederich ventured straight away into self-employment with a regional weekly. Within days of the closure of the old business, he founded "Der Ybbstaler Verlags GmbH" and published the first copy of the regional weekly "Der Ybbstaler" on 13 January 2004. "I did receive some malicious and spiteful letters", recalls Stummer, "but also an incredible amount of support and honest sympathy".

Although the once flourishing family firm was lost, Friedrich Stummer's personal liabilities were manageable. He had raised a personal loan to inject cash into Stummerdruck GmbH, but could meet his obligations. Thanks to the support of his family and friends and the low capital requirements of the new company, he had no financing problems. The greatest challenge was to sufficiently distinguish the image of the new paper from the "Bote von der Ybbs" formerly published by Stummerdruck GmbH, the rights of which had been sold to a media company.

Lessons learnt: the boss must control the costs

"Now I know that letting go of cost control when building the new location was a mistake", says Friedrich Stummer, looking back. He has been keeping a close eye on the fixed costs since then. He has outsourced the printing of the newspaper to another company, and keeps his fixed costs down with a team of just three employees and three freelancers. The new business made a profit in year one, and "Der Ybbstaler" has become a stable feature in the regional media landscape.

Friedrich Stummer's advice to entrepreneurs in financial difficulties

"My advice is to keep checking your connection with your bank. We had been with the same bank for decades, and were unaware that our interests no longer coincided with those of the bank. Companies change, and so do banks' priorities. The bank you work well with today today might not be the right financing partner in a few months or years. In the event of a crisis, this may be a matter of life or death."

First try

Company founded in: 1865. The Stummer brothers took over the management from their father in 1983.

Core business: High-quality offset printing, the regional weekly "Bote von der Ybbs" (Ybbs Messenger)

Maximum numbers of employees: 30

Insolvency: 2003

Fresh start

New start: 2004

Company: "Der Ybbstaler" Verlags GmbH

Core business: publishing the regional weekly "Der Ybbstaler"

Number of employees in 2006: 3 plus 3 freelancers

 

Alfred Lanfer

Hervé Lecesne

Manuela Mutschler

Cristian Rovira

Friedrich Stummer

Jacqueline Dubernet

Josef Zotter

Michele Zanor

Share: FacebookGoogle+LinkedInsend this page to a friend

Set page to normal font sizeIncrease font size by 200 percentprint this page