Let’s assume you are in the most serious kind of turnaround situation and that you are the owner, as opposed to the General Manager. (Hopefully you’re not in this situation just yet, and we need to take less drastic action before embarking on a growth plan, but this will give you a sense of the activity required.)
In a very serious turnaround situation, we will have a plan ready for you in two weeks. It will be ready for execution immediately and as soon as you endorse it, we will begin.
In the first 15 days we will:
- Examine your financials in some detail. We’re looking for the key numbers. How much do you owe? Who do you owe it to? How important are those creditors in terms of what comes next?
- Review your cash outflows specifically, and prepare a plan with prioritised actions to reign them in as quickly as possible.
- We’ll examine your organisational chart with a view to paring back roles to cover only the most important and profitable actions the company requires.
- We’ll put you into safe harbour – this gives your directors some protection at law over your actions, allowing you to trade your way out of trouble even if it means that you are continuing to trade while technically insolvent. Learn more here: link to https://aicd.companydirectors.com.au/-/media/cd2/resources/director-resources/director-tools/pdf/06547-1-director-tools-insolvency-safe-harbour-a4-9pp-web.ashx.
When we have spoken to all of the key people, examined your processes, looked at your assets and liabilities and what you need to do to keep your head above water, we will reconvene with you and your key management team members and lay out your options.
Often, the fastest way to make a positive impact is to cut away unprofitable parts of the business to expose a version of your current entity that is profitable.
Almost inevitably, that means job cuts. It’s unfortunate, but it is effective. Depending on the contracts in place, we may bring in external assistance to chart a redundancy programme so that you can retrench staff without exposure to distracting legal claims.
We will help you deliver the bad news and inform the remaining staff of what is happening. It is vital to retain your expert contributors and this is a really important moment to “get it right”, so we will help you. Losing one or more vital team members right after you have positioned the company for turnaround would be an unfortunate side-effect that we can plan for and mitigate.
We will call in key creditors and let them know the situation we’re in.
We will negotiate, or renegotiate, payment terms for current accounts. If you have internal accounting staff, we will work with them to achieve the required outcome.
We will ask key creditors to stretch even further. Often, by the time we are involved, trading terms are already breached. We will rescue what we can and start making new relationships if we need to, to assure you of supply.
In the second 15 days we will:
- Start working with your Sales and Marketing team to increase performance. This may be happening alongside retrenchments so an experienced hand is required to avoid panic. As your appointed turnaround team, we will provide remaining staff the confidence that we’ve done all this before and if everyone pulls together on the team, we will collectively get through this tough time and back to increased levels of profitability.
- If you have one, we will work with your marketing department to redefine the Marketing team’s goals and how they fit with the Sales team.
- We will work with your BDM’s and Account Managers to redefine the products on offer, what their goals are and the tools they have at hand to achieve their targets. Poor sales performance will be identified and changed or the person will be changed quickly – this is not a game of friends.
- We will create a new Management team, with clear reporting objectives.
- Set the next 30-day plan. Each 30-day plan contains clear objectives for each member of the Leadership team that, when achieved, will lead the company back to stability.
- We will commence weekly check-ins for the management team. Each manager will report to the Leadership Team on their team’s performance, any obstacles to performance will be identified and the manager will adjust their plan for the week as appropriate.
- For manufacturers, and distributors, we may change procurement policy. We have, in the past, found that poor procurement protocols have tied up crucial funds in non-core products that either move too slow or aren’t as profitable when they sell as the company’s core products.
What you can expect from us
Total commitment to your business.
Once you engage us, we fully commit to your goals. We become an integral part of your team through your turnaround programme. We are confident that we can turn around almost any business, at practically any stage of decline. Our arms-length engagement means that we bring a clear-eyed mindset to your business, allowing us to see all the positives and negatives.
If you are having trouble arresting a decline in your profitability, let’s talk. Call us on 1300 36 20 27 for a confidential discussion or send a message from our contact page.