If so, put EFM’s turnaround experts in your corner says Pat Lavelle, EFM business turnaround specialist
After more than 12 months major disruption, many companies are looking forward to getting back to some degree of normality. But as a result of the pandemic, or longer-term underlying business health issues, many businesses’ ‘new normal’ is a daily fight for survival.
To survive and prosper, businesses may have to restructure and quickly.
Identifying the need for change, or a ‘turnaround’, is a standard management competence, but specialist expertise is often required to produce and implement any plan of action in response and get the best possible outcome.
What is business turnaround?
Business turnaround usually refers to the process securing the financial recovery of an organisation that has been under-performing, or is facing insolvency.
A business turnaround or rescue specialist is an experienced restructuring professional who helps businesses devise plans that restore profitability. As an advocate for you and your business, the turnaround specialist will ‘sell’ your plan to stakeholders, and having ‘bought’ the required time, will go on to implement the plan alongside management.
What are the signs of a distressed business?
To ensure the long-term survival of a struggling business, it is vital that management recognise the need for a turnaround. Typical symptoms of a business in distress include:
- The business is struggling to pay suppliers. Cash has become or is becoming a major challenge.
- Management are fire-fighting rather than driving the business forward.
- Management don’t understand their cost base. Money is spent on the wrong things, and at the wrong times. Wastage is overlooked.
- Management information is inadequate. And management don’t understand the data they do have.
- There is over reliance on a small number of major customers and/or no action is taken to address loss-making contracts.
- The business is operating in a silo, failing to recognise and respond to market developments. Opportunities are missed. The business model needs to change.
- There are no adequate cash reserves or access to funding for when opportunities are recognised.
- There is no clear and shared overall strategy.
- Morale is low.
Sadly, as we have seen recently, many business strategies are not suitably robust to withstand and adapt to these influences.
What does a turnaround involve?
A business turnaround starts with accepting that there is an issue, and that change is needed. Of course, businesses fluctuate according to market swings and demands. It is when a business is lagging behind and cannot catch-up that a turnaround specialist can step in to help and even take over the reins if that is what’s required.
Most turnaround specialists have crisis management experience and are able to make key decisions quickly and accurately – delivering immediate steps towards a rescue.
An experienced turnaround specialist will work closely with management to:
- Stabilise performance and liquidity
- Help manage the crisis with stakeholders
- Conduct a thorough situational and financial analysis
- Assess the turnaround options
- Prepare a robust plan
- Execute the plan
Why someone outside of your business?
If management can identify that there is a problem, one might challenge the need for the additional expense of a turnaround specialist. In times of crisis, however, their impartiality is invaluable.
With no political agenda and no legacy to enshrine, turnaround specialists are driven only by wanting to see your business fixed. When it comes to making the difficult decisions, with no emotional connection to your business, turnaround specialists can spot opportunities and effect change more easily.
Business turnaround specialists will have led turnarounds before across many different sectors, and so can recognise factors that need to be addressed quickly and recommend proven solutions to deliver fast improvement.
Your recovery professional should have:
- Proven experience of delivering financial rescue
- Proven experience of running a variety of businesses successfully
- Proven experience of understanding markets, an organisation’s client-base and industry trends
- Independent insight that is focused on delivering success and helping the business move forwards
How EFM can support your business turnaround
During this era of rapid, sometimes painful, change, turnaround specialists are becoming sought-after.
EFM’s experts are best-placed to help lead a business to profit, operating through an established Ireland and UK-wide network, and having experience of working in all sectors and with businesses of any size.
For more information around EFM’s business turnaround service and to arrange a no obligation consultation with one of our turnaround specialists, contact +353 (0) 1 254 2176 or email firstname.lastname@example.org