Welcome
To the blog for small and medium sized business (SME) owners.
Is it:
• A sudden unexpected event that will devastate the business unless corrective action is taken
• Or the cumulative impact of small insignificant adverse events that at the time were considered unimportant to receive great attention?
Often the business owner is unprepared for either type of catastrophe and perhaps in a well meaning but unplanned, ill defined manner attempts to take remedial actions without understanding the impact those actions may have on other areas of the business.
The end result being ‘problem shifting’. The original concern is corrected in the short term but re-appears or manifests itself in another aspect of business life at a later stage.
Unless well skilled in financial management, change management, business turnaround or the like, the business owner will experience difficulty in implementing the necessary robust solutions and often aggravate a problem, resulting in a continued business downturn with the prospect of a short term solution less likely.
To protect your business employ experts who have the necessary skill sets to help you – the skill sets that may be missing in your business.
Many SME business owners are enthused at starting a business and may enjoy initial success. Others may be good at taking over and managing businesses that have been long established and require little change.
Whilst the business owners remain in their ‘comfort zone’ their new business may thrive and bring rewards. However, when the owners are challenged by a downturn in business fortunes many are found wanting, unable to manage the situation and find their businesses perhaps spiraling out of control.
What action should be taken?
It is not uncommon to find the business owner, who may be unskilled in turnaround work, attempting to take actions the consequences of which are not fully understood until too late or recruiting generalists who are not experienced in all aspects of business.
Do not risk losing your business engage a business turnaround expert early in the process.
If the owner is too close to a situation, often the obvious is missed or deliberately ignored to avoid embarrassment. Not many business owners willingly admit to mistakes until matters are critical, so it should be no surprise that business owners who manage their own turnaround without reference to business turnaround specialists often repeat the mistakes of their past with similar results.
If you want a gourmet meal you go to a top restaurant not cook in your kitchen. The analogy with employing a business turnaround specialist is no different.
How do you ensure your business turnaround work will not fail? How do you ensure business turnaround success?
The business may become:
1. More complex – perhaps overtrading
2. Demanding, problematic and stressful
3. Less successful than previously
4. Facing increased competition
5. Encountering pressure from investors
6. Suffering low staff morale, high staff turnover
7. Not generating positive cash flows
All features of the business environment that may result in business change.
Learn more on How to Ensure Your Business Turnaround Will Not Fail
Business turnarounds are usual when a business is failing and an attempt is made to save all or part of it from closure.
This will be a time of anxiety and the typical concerns and issues arising include:
1. Is there a real desire to change?
2. Will the business turnaround strategies be palatable to the business owner?
3. The uncertainty regarding the business turnaround plan
4 What steps will be taken in the turnaround process?
5. Who will manage the business turnaround process?
6. Will expert help be required?
7. What will the reaction of stakeholders be to a turnaround?
8. How will the business turnaround process be communicated internally and externally?
9. What will the turnaround uncover, will there be real or implied criticism of the management?
10. What is the way forward after a successful business turnaround, and will the existing management team be part of the future?
Discover the steps to take to avoid your business spiralling out of control.
1. Review and Assess the Present Situation
2. Develop Plans and Business Strategy
3. Communicate With Key Employees
4. Communicate With Other Employees
5. Meet the Bank
6. Meet Customers
7. Meet Suppliers
8. Conserve Cash
9. Implement New/Update Systems and Procedures
10. Monitor, Measure and Take Action
More tips on How to Avoid Financial Disaster and Business Turnaround
If you need help in improving your business contact for a free confidential discussion.David Willetts
Why should there be need for a business turnaround?
Unfortunately, business turnaround happens when the financial expectations of the business fail to materialize, a situation that may result from:
- Failure to regularly review the financial performance and to take corrective action if required
- Poor internal business controls
- Fraud
- Major errors of judgement
- Events outside of the control of the business owner.
A regular review of the business should identify the causes that give rise to areas of weakness or poor performance. The 7 symptoms that often result in a business turnaround are:
1. Cash flow difficulties
2. No business growth, declining markets
3. Expansion of the business has been too rapid resulting in a lack of working capital
4. Quality of the product or service fails to meet the customer expectations
5. The business lacks strategy, no long term goals and exists from day to day
6. Low staff morale resulting in high staff turnover
7. Lack of specialist skills
If your business needs help to avoid a business turnaround then seek expert help quickly.
Business turnaround and transformation are accepted as part of normal business life. Hence the need for business owners to understand turnarounds and transformations in order to face the global market challenges is paramount.
Read article on Business Turnaround
Many businesses operate with little or no strategy to avoid problems and create value in the organization. This will happen in good times as well as bad and will possibly result from a belief that:
- It is not broke so don't fix it
- There is no competition the business is in a niche
- The business cannot make changes there are no in-house skills capable of manageing the change
- Soon it will be someone else's problem; the business owner is retiring
And so on
Such organisations generally adopt a reactionary position to business life; the organisation fails to take business planning seriously and is focused on resolving current issues than establishing a mechanism to allow problems to be anticipated and actioned prior to becoming an issue. The import of this can be found when comparing organizations that:
- gain year on year success
- attract the most skilled staff
- train staff in new skills
- have set their goals and know how they are to be achieved
Read 'Discover 10 Reasons Why Businesses Implement Change' and guage what changes will occur in your business, if any?
