Here are some turnaround solutions that can assist your business recovery.
1. Cannot Pay Bills on Time
Special Note on Company Insolvency / Company Bankruptcy
The ability of a business to not pay its expenses could mean the business is in corporate insolvency. It is crucial that the Directors of the business understand what this means and that they place the business in voluntary administration as soon as possible. Failure to do this is an offence under the law and can lead to fines and bans.
Voluntary administration can occur when a director or a secured creditor with a charge over the company places the company into the hands of an administrator who will assess how best to protect the creditors interests. This can lead to the company being placed back into the hands of the directors, the company entering into a Deed of Company Arrangement or being placed into a liquidation process which can lead to company liquidation. In some instances placing the business into voluntary liquidation and winding up a company on your terms will mean the best outcome for everyone.
It is imperative when contemplating business insolvency you act early.
SIDE NOTE: If you have think your business might be in trouble now or in the near future, contact us for a confidential discussion using the form on the right hand side of the page.
If the situation is not this dire, then you can implement the following turnaround management
- Make someone in your company responsible for collecting the accounts receivable on time
- Speak with your suppliers to negotiate extended terms
- Get a bank overdraft before you need it
- Have your financial controller prepare a cashflow forecast that allows you to plan your cash needs
- Where possible reduce the amount of inventory you are holding
2. Fire Fighting Culture
- Take some time outside of your business
- Identify which activities you and your business undertake that are profitable and those that are not profitable. Stop doing the things that are not profitable.
- Out of the activities you are undertaking personally, which ones can you delegate and make someone else accountable for and which ones are crucial that you keep doing?
- Identify the bottlenecks - the areas that are under pressure
- Now that some activities have been delegated, spend some time with the person the task has been delegated to, and train them and have them document the procedures step by step. This will clarify your expectations as well as provide a documented system for future employees to refer to when being trained.
- Rethink your bottlenecks and change your business so these bottlenecks do not occur
3. What Game are you playing?
- Get a scoreboard and keep score of your company's goals and how your company is tracking against the goals. Get everyone involved in what the business is trying to achieve and how they are contributing to the achievement of this goal.
- Make people in your team accountable to achieve tasks that contribute to the company achieving that goal and ensure that they have the appropriate training, resources and rules to go and execute.
4. Where's Your Next Drink Coming From?
- For medium-long sales cycle businesses (1 month+) your business development team must be using CRM's to track leads and conversions and have a sales funnel where they are tracking opportunities. Based on conversion rates, average revenue per sale and other metrics it is then possible to predict the future profitability of the company.
- For short term business sales, what indicators are predictive of future results? Is it the number of enquiries or web site visits? Is it the number of quotes or number of meetings your sales people have?
Understanding what drives your sales and more specifically what activity drives your sales means that you can measure that activity which will lead to predictable recurring sales.
5. You've Lost that Loving Feeling...
A leader who does not have the right mindset needs to fix it and fix it fast. Take some time to reconnect with what got you into the business in the first place.
- What was it that made it exciting to get up in the morning and kick some goals?
- What don't you like doing?
- What do you like doing?
- What sort of people do you like working with?
- What sort of people do you not like working with?
- What does the future of the business look like?
- What skills do you need to bring into the business to help you achieve your goals?
- What mentors could you connect with who could assist you achieve your goals?