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Background and process
How can
this site help you?
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All
businesses are fundamentally the same. They all have to sell
goods and/or services to their customers; at a profit and collect in
the cash. They all need to undertake the same basic business
functions.
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All businesses are fundamentally different. They all offer
different services and do things in different ways to different
customers. They all have a unique 'recipe' for how and what they
do.
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But failure in either a business' recipe or in its
management of its functions (or both) can lead to business difficulties
and if these are not addressed, ultimately to business failure.
There is however no shame in a business getting
into difficulty. All businesses will have their ups and downs as the
economy and their industry change. The important thing is to get
through these periods and come back up the other side.
This site is dedicated to giving you the
information you need to help restore your business' health if times are
difficult.
What do
you need to do to restore your business?
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Spot the signs as early as possible. Business
failures are like smouldering fires at first. Use this site as a smoke
detector. The earlier they are detected, the easier they are to
deal with because you have more time and resources to devote to
dealing with the problem.
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Face up to the need to deal with it, and use this site as
the fire extinguisher to:
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assess the causes and seriousness of the situation
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understand insolvency issues and risks if
things are really tough
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survive
any initial cash crisis
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plan your business's unique recovery strategy; and
most importantly of all
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make it happen.
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But do get in help if you need it! Don't wait
until you are firefighting before you use local help to call the fire
brigade.
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What do
you need to achieve a turnaround?
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A viable business: Some core business that has
real potential around which you can rebuild your business.
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Time: A turnaround will take time and if started too
late may fail or need Insolvency Act protection.
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Cash: Turnarounds need money to fund first the initial
restructuring (eg redundancy costs) and then the regrowth of the
business; that has to be found either from within the business
('bootstrapping') or from outside by raising
cash.
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Vision: A clear goal.
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Management who have both the will to achieve the
turnaround (it's your plan and vision) but also the skills to make it
happen.
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Support: You cannot do it on their own, you need to take suppliers, customers, staff,
bankers, shareholders, and others with you.
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Confidence in the process: Everyone
involved needs to be able to see how the plan is going to work.
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What
phases does a turnaround go through?
Turnarounds tend to
divide into three key phases with the priority moving from a focus on
finances through to marketing
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Crisis
management: short-term survival and restructuring down
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Stabilisation:
preparation for relaunch
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Regrowth:
Long-term sustainable competitive advantage
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Financial
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Concentration on solving immediate financial crisis
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Put finance in plan for regrowth
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Managing the working capital cycle
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People
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Retrench staff and keep key staff committed
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Get the right management team in place for regrowth
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Support
regrowth by recruiting and retaining right people
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Marketing
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Slim down product/ market portfolio to profitable items
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Prepare for relaunch of growth products
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Drive growth of turnover and profits
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