“Turnarounds seldom turn”
In the life cycle of any business, it will almost inevitably experience a crisis. This is always a very difficult time and it will be a test of judgment and experience how senior management respond. Usually, it will be some issue that is solvable and the business will continue to operate.
Sometimes however it is an existential threat and this will need careful thought and planning.
Stress drains your energy
Deciding whether to try and turn around a business or put it into liquidation is enormously stressful. Many careers and the family of staff and key stakeholders could suffer depending on the outcome.
It is unlikely there will be a second chance if the first decision made by management turns out to be incorrect.
What is the problem?
So the first thing to do is identify the core problem. There are many things to look at:
- Is your business in a mature to old stage?
- Are there disruptors like Uber in the industry?
- Is there still demand for the product or service your business provides?
- What sort of shape is your business in? Are systems and infrastructure creaking or worse?
Money, planning and analysis
Once the problem and a solution have been identified, don’t forget that turning around a business will take resources. Plan your cash flow carefully.
Business turnarounds are also high risk – remember they will often not work out. But careful planning and analysis will improve the odds of success – ask your accountants for their specialist help and advice at this crucial time.