Revenues falling and costs are rising? Market share declines? Customers and key employees abandoning ship? Creditors getting ever more stressed? Bills are paid late?
We have to accept that not all businesses succeed. In these economically challenging times there are more and more businesses that find themselves at that forked road that one leads to success and the other toward failure. Often than not, a business owner, a leader or investor will think that his business is heading to doom right now. However, before he throws in the towel, it is worthwhile considering a turnaround approach to resurrect the business and gain success instead. At the time faced with the moment of truth, the only question to ask is “How can I salvage my business and lead it to success?”
Generally, turning a failing business around takes a specialist approach and the first thing that’s often required in troubled times is a process dedicated to corporate renewal.
The process, known as Turnaround Management, involves the formulation and implementation of a strategic plan and a set of actions for restructuring. A full management review, SWOT/TOWS analysis and a Root Failure Causes Analysis are essential to determine why the company is falling. Once analysis is completed and the real cause of the problem identified, a turnaround plan is formulated and executed, assuming that the firm still offers the potential to return to financial solvency, profitability and strategic viability.
Rather than merely dealing with the symptoms of the failure, turnaround management focuses to the causes of the problem, how this can be solved or be prevented from occurring, and helps stakeholders to achieve permanent resolution of it. Although there is no formula for a successful turnaround, because companies and their challenges vary too widely, a few key pointers that characterize the most successful transformations are as follows:
- Make an honest analysis and assess exactly where your business stands
- Stop the bleeding and control your expenses
- Keep the best Business Partners and let go the least profitable clients
- Evaluate your staff
- Work on a new clear strategic survival plan
- Restructure the business
- Boost company’s morale
- Get your staff and customers involved
- Be positive
The long-term key to success is to stay calm and rational. As a business owner or a leader you have worked very hard, you have sacrificed time with your family and friends to come so far and you are unwilling to give up on your dream.
If any of these signs of impending failure sound familiar, now is the time to take action!
by Dimitris Rousopoulos – Head of Strategy & Operations