Four businesses which have streered their way through troubled times share their turnaround tips.
FIND YOUR PLACE ON THE MAP
Many small businesses that fall on hard times can’t work their way out of the mire simply because they’re not sure how they fell into it in the first place.
That’s the view of William Kendall, who sold Green & Black’s to Cadbury. The organic chocolate maker, and the New Covent Garden Soup Co, which he ran for nine years, both “look like growth stories”, he says, but were, in fact, turnarounds.
“In both cases, we needed to dramatically change how we were operating. The classic is the business that has done the sustainable stage and lost its way.”
The soup business “almost went bust” because it achieved ambitious sales goals the wider company wasn’t prepared for, he recalls. “Running a company is like map reading. The business is lost if it doesn’t know where it’s going, but, equally, where it is.”
Kendall, who now invests in start-ups through his Nemadi fund, says struggling small companies often have a theoretical margin they should be achieving, and can’t work out which everyday factors are to blame when they’re nowhere near it and performance starts slipping.
Most entrepreneurs are “enthusiasts”, he says, who need assistance from someone with an eye for prosaic detail, particularly when in a turnaround situation.
“I can do the enthusiasm bit. Anyone coming in saying, 'I’m fixing this’ will get goodwill from suppliers, staff and the bank, but you need a cynical navigator keeping score, someone to tell me that idea I had last week isn’t working.”
In other words, “pilots need navigators”. For entrepreneurs, that often means a decent financial controller. “It’s someone who doesn’t give you the theoretical margin from three-month-old financial accounts, but the daily reality. The two are often miles apart.”