How to Turnaround a Failing Business

In these economically challenging times there are more and more businesses that find themselves in that difficult situation where sales are falling, costs are rising and the creditors getting ever more agitated. Before a business owner or investor throws in the towel and winds up the business it is worthwhile considering a turnaround approach.
Generally, turning a failing business around takes a specialist approach and there are many factors involved but a few key pointers are as follows:

1.      An honest analysis

The turnaround manager must take a thorough look at all aspects of the business and come up with a simple, honest and realistic appraisal of the enterprise and its chances of survival and future success. This initial review should look at all aspects of the operation including: sales; finance; administration; staffing levels and overhead costs.

2.      In what form can the business survive?

Often a company has been over trading and has too few sales to support the level of overheads it has accumulated. An experienced turnaround manager will be able to tell you what the business can afford, and will point to areas where cuts can be made and efficiencies introduced to create a more sustainable company.

3.      Speed is of the essence

A failing company is losing money and the longer it goes on the more it will owe to creditors and maybe the bank — By acting quickly you will stem the losses and allow yourself some breathing space to try and pay off debts and build up reserves.

4.      A credible financial plan for turnaround

If creditors, the bank and staff are going to support a business they must see a clear and achievable plan for future success. This can be very short and simple and must show how and when debts will be paid but it needs the buy in of the key creditors.

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The seven principles of a successful restructuring

Chances are, you’ve had to make some changes to your company’s internal structure in response to the economic downturn (and in preparation for the slow recovery). As with everything in business, restructures can be done well and they can be done poorly. Here are seven principles to help you avoid unnecessary complications.

Even as the economic outlook appears to brighten, the fact remains that many organisations can no longer operate as they had been. A key feature of this changing landscape is the need for organisations to restructure.

Here are seven broad restructuring principles to help make any restructure a successful one.

1. Align structure to strategy

All restructures must align to strategy. This may seem self-evident, yet a significant number of organisations fail to do so. For example, if local conditions are a predominant factor, then stress local sales and marketing functions rather than a centralized behemoth that then tries to matrix with local elements.

2. Reduce complexity

Simply put, complexity costs. Whether it is a complex organisational structure, a complex product offering or complex transactional processes, the added cost of complexity can be a drag on performance.

To mitigate complexity, there are three considerations that help with organisational design:

    Design structure for strategy before you design for specific personnel. Organisational redesigns which are a compromise between strategic intent and line management preferences inevitably add complexity. So, while internal political intrigue is unavoidable, at least start with a clean and clear design that matches to strategy.
    Avoid making leadership roles too complex (see principle #5).
    Minimise the use of matrices. They introduce measurement overhead and a lack of clear direction to the staff.

3. Focus on core activity

What Does a Good Business Consultant Do for a Company?

A Good Business Consultant Has Extensive Experience

A good Business Consultant has experience working in and working with a broad range of businesses. It is the accumulated business history of a Business Consultant which makes the consultant valuable. A good Business Consultant is experienced in a lot of different types of businesses and industries, while also having very specific experience in running companies, in the financing of a company and most importantly in the marketing and sales of a company. Experienced Consultants have experience with companies in all stages of Growth: Existence, Survival, Success, Take-off and Maturity. The business consultant may also have a specialty as a Business Turnaround Consultant, helping struggling companies to turnaround and succeed again. In other words, a good Business Consultant has broad and narrow stroke experience and typically, 20 years or more of accumulated business experience. Having an MBA from a good business school isn’t enough. The Business Consultant must have solid real world experience with many types of companies in order to be an effective consultant.

Exactly What Does a Business Consultant Do?

First and foremost, a Business Consultant gets to know and understand your business. As the business owner, you know more about your business than anyone else. For this reason, a good business consultant will take the time to learn from you, your department heads and key employees what the ins and outs of your business entails. It is only until a complete understanding of your business that a Business Consultant can begin to help you.

Identifies Problems and Opportunities

How to Find Consultants to Assist You in Your Startup Process

Deciding to startup your own company is an exciting time. It can also become a headache if you don't have the experience needed to tackle all that needs to be done. The initial decision to start a business sets off a chain of events and lists of things to do in order to get the business off the ground. If you aren't sure what needs to be done, maybe you should hire a consultant to help.

A business consultant is a person who specializes in a particular field or area and offers advice to clients in various ways. For instance, a business consultant experienced in running a sporting goods store would have a wealth of information for a person who is planning to open a retail shop. From the startup process all the way through basic record keeping procedures, the sporting goods store business expert will be able to consul the new retail business owner and guide them along the way.

In order to be a good business consultant, a person needs to have the experience and expertise for a specific type of business. If you have run a service-type business for several years, it does not necessarily mean you will make a good consultant for a retail business. Being experienced and skilled in the specific industry of the business is best.

Finding a good consultant can seem like an overwhelming task on its own, but there are many avenues to explore. Being able to find a business consultant that can assist you and guide you through the startup process is well worth the effort. Begin your search by asking other business owners with whom you are friendly. If you do not know any, start with the local phone directory or online. Search for business consultants or business advisors and create a list of companies to contact.

Visit the websites of all the business-consulting firms you have listed. Do they seem to have a professional image?

How Does Shareholder Value Create the need for a Restructuring?

Companies benefit immensely from corporate restructuring. They restructure with a view to improve the present state of affairs. They review all the systems, process and policies of the company then they make necessary modifications so the company functions more efficiently.

Corporate restructuring is all about drastically altering the company's interval environment and hierarchies. Through this process, the management may consolidate the company's debts. Management also may decide to sell off the company's redundant assets.

Corporate restructuring almost always increases shareholders' value.

Concentrating on the Pluses

    With corporate restructuring, management can dramatically and radically change the face of the business. Many times, corporate restructuring involves merger with another company in the same line of trade. Both the companies have pluses and minuses in their styles of functioning. Corporate restructuring sees to it that the strengths of the two companies get accentuated and that they curb weaknesses. When the functioning improves, the new company will likely make more profits than the two companies merge. Shareholders' value in the company increases.

Shareholders' Decision

    Many times, shareholders force management to consider restructuring the business. When the value of their investment in the company constantly depletes, the shareholders put across this proposal. Periodically, management apprises the shareholders of the state of the company's affairs, its growth and expansion plans. The shareholders learn the company's market share. They are able to comprehend if the competitors are eating into their market share. The shareholders then decide and force the management into correcting the present state of affairs.

Communicating to Stakeholders

How to Start a Small Business with No Money

How do I build a business team for my small business? How do I assemble a business team when I can’t afford them? Are you interested in building your own business team from scratch? Do you want to know what it takes to build a strong business management team? Well, if you are interested in finding an answer to any of the questions asked above; then please read on as I share with you the pros and cons of building a business management team from scratch.

1.Outline your personal objectives

The first step to building a business team is to outline your own personal objectives but I prefer to this your primary aim. Every entrepreneur must have a primary aim in order to succeed in business; without a primary aim, you have nothing worth dying for.

Now what has your primary aim of building a business got to do with a business management team? While I have no direct answer to that question, I want to point out that the main reason why entrepreneurs build business to use that business as a leverage to achieve their primary aim. That primary aim may be freedom, self actualization or anything.


Now it’s the duty of your business team to work towards the growth of your business, which will in turn fulfill your primary. So directly or indirectly, your business team has a role to play in the actualization of your primary aim and if they are not going to help you achieve that aim; then they are not worth being a team.

2.Outline your business objectives

After outlining your personal objectives, the next you will need to outline are your business objectives. You need this because it will help determine who is worth being on your business team. When assessing your proposed business management team members; you must make sure that their various skills will add to the bottom line and help the business achieve its objectives.

If a proposed member possesses a skill that doesn’t add to your bottom line; then bypass him/her no matter how skillful that person may be.

3.Identify your strength and weaknesses

Secrets of Successful Small Business Management

A business is an ongoing activity that doesn't run itself. As the manager you will have to set goals, determine how to reach those goals and make all the necessary decisions. You will have to purchase or make your product, price it, advertise it and sell it. You will have to keep records, and determine costs. You will have to control inventory, make the right buying decisions and keep costs down. You will have to hire, train and motivate employees now or as you grow.

Small Business Management - Setting Goals

Good business management is the key to success and good management starts with setting goals. Set goals for yourself for the accomplishment of the many tasks necessary in starting and managing your business successfully. Be specific. Write down the goals in measurable terms of performance. Break major goals down into sub-goals, showing what you expect to achieve in the next two to three months, the next six months, the next year, and the next five years. Beside each goal and sub-goal place a specific date showing when it is to be achieved.

Plan the action you must take to attain the goals. While the effort required to reach each sub-goal should be great enough to challenge you, it should not be so great or unreasonable as to discourage you. Do not plan to reach too many goals all at one time. Establish priorities.

Plan in advance how to measure results so you can know exactly how well you are doing. This is what is meant by "measurable" goals. If you can't keep score as you go along you are likely to lose motivation. Re-work your plan of action to allow for obstacles which may stand in your way. Try to foresee obstacles and plan ways to avert or minimize them. This also pays off in the long run, as positive impact through management reduces need for PR management firms.

Business Management - Buying