Take any industry niche; it’s full of successful business turnaround stories.
One of the most famous amongst them is dated back in 1997 when Steve Jobs brought back the struggling Apple Computer and transformed it into one of the largest, most cash-rich and loved company in the world.
In the 1930s, Walt Disney too suffered a debt of millions of dollars, but eventually recovered with ‘Snow White and the Seven Dwarfs’. Also, the real estate magnate Donal Trump neared the state of bankruptcy in the early 90s before rebuilding his massive property empire.
While you might also find myriad examples of businesses that failed to recover after a setback, few strong turnaround stories make it clear that with the right strategy, it’s possible to turn a failing business into a significant success.
In case your business is struggling due to debt, poor cash flow or a product that costs a lot of money and just isn’t working as expected? You are surely in need of taking all the right steps to save your business. If your business is falling apart, then you need to have the right combination of strategy and tactic to facilitate a successful turnaround.
- No company is immune to trouble.
- Do you think your company is capsizing?
- Read on to discover effective ways of rescuing a capsizing company:
Honesty is the best policy
It doesn’t matter how cliche it may sound, but that’s the right way out.
It’s tough for any C-level executive to face the revelation of a sinking company, as all their pride and reputation lies at stake. But, on such grounds, that’s precisely what they must do - pull back and take an unbiased look at the journey of the business, its plan and criticise the shortcomings.
Don’t be late or don’t shy away from raising the white flag. We know it’s tough, but that is more important to save your business. Most people don’t want to admit they or their business needs help, cause that would mean they’re failing. Don’t hesitate to wave the white flag, as it will only help you in getting better than making things worse.
Cash is King
Any business runs on a constant flow of money. If that flow disrupts, so will the company. The first sign of distress is liquidity, not enough money in the till to pay the bills.
The basics of any business are quite simple to comprehend; you need to find the right balance between the expenses and revenue and ensure the former doesn’t increase from the latter one.
If you notice that this is not the case with your business, then you must run back to your basics of managing the business. Stop focussing on the abbreviation soup of performance metrics like ROI, EBIT, EVA, and NPV. Instead, focus on cash, and determine how to get it and how to conserve it for the future.
That’s the first thing any business turnaround services provider will suggest you do.
Ignore the Business Plan
A business plan is usually a little better than a fantasy. On the other hand, a struggling company might involve realities that you can touch and feel.
Many a time, a business can be running on a business plan that operates on a flawed model, which is bound to leave the company struggling in the market. Sometimes people also go into businesses that they don’t understand.
However, when you know that your business is struggling, make sure you become attentive towards the reality, which lies in revenues, operations, expenses, and cash flow.
Craft an apt narrative
What will you do if you’re in a sinking boat?
A sensible person will jump off and start swimming towards the nearest possible shore. The same goes with a business that sends up a distress signal. When in problem, a company must come up with a crucial and compelling story (or truth) that can aptly explain what the organisation’s current troubles are and share the gist of all the smart things that are being done to correct the course.
Concentrate on quick wins
Plan out a smart strategy to swim out from the pool of problems.
A companies turnaround situation always shouts for an overarching strategy to win the day, but that takes time and involves a full team effort. But at such times, when you need quick wins, make sure you’re cost-focused and cut off demands for unnecessary external services.
Moreover, you must also restrict your focus to your existing customers and clients, rather than finding new ones. Your business is in dire need of cash flow. Therefore, you must look up to your current customers to close new deals and generate more sales. You can even come up with proposals such as pre-payment discount on your services/products. It will help your business with the required cash before it has to deliver the order, preventing it from the demand for relying on a line of credit.
Don’t waste your time and cash on attracting new potential clients, nurture the existing ones and keep your focus on making saving the business from the big problems.
Focus on People
Any business runs on the foundation built by ‘People’.
If a once-thriving business is struggling, it’s almost always a people-related issue. They can help you fix it, not the financing, not the capital but the employees, management, or owners will help you surf through the struggling times.
In most cases, when everything is going great in a business, something breaks down, then there exists a disconnect between the manager’s concept and what people did with that concept. The problem might be anything from entitlement, laziness, complacency, to even ego.
Always remember, it all starts with people because it’s still about people.
Still not sure of what brought your company to this struggling place? And aren’t sure of what will make things right?
If you believe that things have gone out of your hands, and you’ll require some experts advice! There are numerous business recovery solutions in the UK, that can help you surf through each phase of the turnaround process. They are proficient enough to help you from establishing an initial plan of action to developing a detailed turnaround plan that can balance all the business priorities for the stakeholders.