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.”
