Review and Assess the Present Situation
In a business turnaround, it is important to understand fully the starting position. We gather objective and anecdotal data in order to review the situation and to determine the causes, as well as to comprehend the immediate effects, of the issues impacting the business.
Develop Plans and Business Strategy
After assessing what is required to be changed for the business turnaround to be successful, we help you develop robust plans and strategy to achieve success. It will be necessary to comprehensively document the actions to be taken, the timings and the financial impact of those actions and to obtain ‘buy-in’ from all of the stakeholders.
Communicate With Key Employees
The current business affairs should be explained and the consequences of not taking corrective action should be made known. An outline of the proposed actions to be taken should also be communicated and comments invited. Whilst it may not be possible to answer detailed questions, seek to address the concerns of this group as positively as possible.
Communicate With Other Employees
It will be necessary at the earliest opportunity to meet with all employees or their union representatives, particularly if job losses are planned.
A prolonged period of uncertainty, fuelled by rumour and counter rumour, will not be beneficial to the business and whilst bad news may not be easy to deliver, the communication of it in a timely and sensitive manner is desirable.
Meet the Bankers
The bank and other parties with a financial investment in the business should be advised of the business turnaround plans. If possible meetings should be arranged to discuss the plans and to seek assurances of continued, and maybe, more support for the business.
Dependent upon the severity of the situation within the business it may be necessary to reassure key customers of the business turnaround plans and the benefits that will accrue for them.
This action should be considered mandatory if the cause of the business demise has been poor customer service, poor quality product or any other matter not meeting the expected/agreed customer satisfaction levels.
If the business has failed to settle payable accounts on time, even the murmur of business turnaround activity taking place may result in suppliers imposing draconian payment terms that may jeopardize the business turnaround recovery plan.
If support for the turnaround plan has been gained from the financial institutions and investors, it will be advisable to actively seek meetings with vendors to outline the plans and to seek their continued support.
We review and improve if necessary your credit management procedures. If possible negotiate extended payment terms to suppliers; examine thoroughly all unused assets of the business. In addition all unnecessary overhead costs should be eliminated.
Implement New/Update Systems and Procedures
A thorough review of existing systems and procedures will be required to meet the goals of the business turnaround plan. Implement change if necessary; it will be noteworthy to recall that a continuation of old practices will almost certainly result in the same old results. Positive and profitable change may be required and should be communicated to employees, so that they understand their roles in the new business environment.
Monitor, Measure and Take Action
Throughout the business turnaround process, results should be regularly measured against plan and corrective actions taken if required.
Key Performance Indicators (KPI) should be determined that will give a snapshot of the business performance and be available on a daily, weekly or monthly basis. The KPI’s will include financial and non-financial measures and reflect the important aspects of the business that will determine success or failure.