What to Expect From a Turnaround Specialist
In a previous blog I addressed when to appoint a turnaround specialist and the reluctance of business owners to seek help as early as they should.
Now I’m going to take this one step further and look at what business owners can expect when they engaged a turnaround specialist.
Phase 1: Strategic Review
Upon appointment, a turnaround specialist will conduct a strategic review of your business, focusing on the following:
- Financial statements
- Capital utilisation and requirements
- Sales and Marketing Strategy.
The turnaround specialist will begin with a review of the financial statements as they often indicate areas of concern/stress within the business. It is beneficial if these can be reviewed before the first meeting.
The original management discussions, on or before appointment, will usually highlight management’s views on the crisis points which need to be addressed urgently – often before the review is completed.
While these are being addressed by the company and turnaround specialist, the review will continue.
This review will flesh out management concerns, the reason why the concerns occurred, possible solutions, industry comparisons as well as any other major concerns which may come to light during the review.
Cash Flow Reporting
In addition, the cash flow reporting system (if one exists) will be reviewed, introduced and improved so that this can be used as the basis of a future cash flow forecast.
In this blog it is not possible to go into detail on cash flow reporting other than to say cash flow or the lack thereof is usually top of the list for companies in need of turnaround.
Your turnaround professional then provides a draft report to the internal stakeholders to ensure that the facts and observations are agreed.
Two or three future scenarios are canvassed, eventually arriving at an agreed turnaround plan.
The agreed scenario is then discussed with the major external stakeholders to obtain agreement on the way forward and their reporting requirements.
Even during the review period, results of the observations and suggested solutions/changes to management and workplace practices are, if possible, incorporated into the plan. The cash flow forecast is also refined and tested so that accurate forecasting can be put in place.
Phase 2: Implementation
After the initial phase of producing the report and obtaining confirmation of the agreed direction from the stakeholders, phase two will “kick in”.
During phase two, various initiatives are implemented and a “three-way forecast” (Cash Flow, Profit & Loss and Balance Sheet) is produced.
This is the hard but rewarding phase as the team consisting of management, staff, stakeholders and the turnaround specialist can see the predictions unfolding and the strengthening of the core business.
Vantage Performance is a leader in sustainable business improvement, winning national recognition in 2008, 2009, 2010, 2011 and 2012.