Four Business Turnaround Strategies That You Can Apply Right Away
A business turnaround appears on the surface to be a difficult task for any manager. The reasons for the company downturn are always unclear. You never know for sure if a poor decision, a poor leadership team or general industry downturn is to blame. Nevertheless, what is clear is the firm needs a business turnaround … and fast!
While the reasons for the business turnaround are unclear, the strategies are simple and straightforward. In our business turnaround practice, we use these strategies to rebuild and restructure companies:
Business Turnaround Strategy #1 - Cash Control Strategy – Short-Term
The key to this strategy is never to pay out more than you have. What
you must do is immediately take control of the cash. This means that you
approve all expenses and sign every check. You will likely have to stretch
vendors, but most will understand if you communicate with them about your
dire circumstances.
Business Turnaround Strategy #2 - Immediate Downsizing – Short-Term
Within the next few weeks, you must make some immediate cuts in your operations.
This is especially true if you are running out of cash. Since you have an
emergency, you cannot spend much time analyzing. Our advice is “check
your gut, and make the cut.”
Business Turnaround Strategy #3 - Business Model Change – Long-Term
Once you are reasonably certain that you can make payroll over the next
few months, then you need to take a strategic view of your firm. You need
to discover the profitable areas of your company. These areas then form
the foundation of your strategy. To restructure effectively, you must
rebuild around profitable business units, products and customers. You
must cut everything else.
Business Turnaround Strategy #4 - Sell the Business – Long-Term
You will know that you have turned your company around if you have six quarters
of profits and cash flow. If you want to sell your business, now is the time.
Your firm is now growing again and healthy. Buyers will pay a premium for
this.
You can find out how to carry out these strategies in Dan Betts ’s business turnaround bible, The Insider Secrets to Saving Your Business: The Step-by-Step Turnaround Guide. As the title implies, this guidebook gives you the exact steps for each of these strategies. It is good for executives and owners needing to save and rebuild their financially strapped companies.
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