Insights

How Can A Turnaround Expert Help A Troubled Business?


The turnaround expert assists you to identify and implement appropriate strategies to stem losses and return your business to financial health.

The following are some potential strategies a troubled company, in conjunction with their turnaround practitioner, might put in place to turn things around:

 

  • Seek out a turnaround specialist

Our experience shows us that businesses trying to struggle through alone are more likely to fail than those that put their hands up for expert help. Engaging a specialist turnaround management firm – as early as you can – assists your business by bringing on board a specialist who deals on a daily basis with the issues causing your business to struggle. They will complete a “warts and all” review of the business’ management and customers to isolate the unique parts of your business. They will also complete weekly cash flows for at least 3 months. These are the essential starting points.

  • Aggressively manage the accumulation and payment of cash

This will include arranging repayment plans with creditors, increasing or reducing prices depending on the situation, reducing debtor collection days outstanding and renegotiating suppliers’ terms of trade.

  • Review the business operations for other short term cost saving/cash generating  measures

This review process might throw up strategies such as: cull unprofitable, outdated or obsolete stock lines; aggressively cut costs on non core activities/assets; reduce staffing levels; consider disposing of unprofitable divisions to reduce losses; consider outsourcing for  significant cost savings; overhaul the sales and marketing strategy to identify strategies to improve sales and margins; implement robust financial and operational management systems to capture key data from the business in a real time environment; and implement a transparent communication strategy across the organisation.

  • Longer term measures

These long-haul measures might include: restructure finance facilities to better match the size and position of the business; consider the acquisition of a competitor to gain critical mass; enter into new markets if the margins are high and the risks are manageable; implement strategies to improve productivity through retraining and recruitment; upgrade maintenance; manage product flow; and implement a workforce performance/employee motivation and retention strategy.

The important thing to remember when business problems overwhelm you is that you don’t have to handle it alone – turnaround specialists are dealing with troubled companies on a daily basis and are able to bring a fresh perspective and the skills to get things back on track.

Vantage Performance is a leader in sustainable business improvement, winning national recognition in 2008, 2009, 2010, 2011 and 2012.

 

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Michael Fingland
Andrew Birch VP

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Michael Fingland

My philosophy is that there is always a way to solve a crisis, as long as you’re engaged early enough.

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Andrew Birch

Cooperative leadership teams that develop prioritised actions to progress towards clear strategic objectives can achieve long-term business viability.