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How to survive & turnaround your business!
- Details
- Written by Alastair Macduff
List your fears
- Prepare a detailed list of all your secret worries and worst fears
- Assume the worst in each situation
- Decide how best to deal with each fear- prepare another action list!
- If you have legal fears, get competent advice on what you may face, and how to deal with each situation, and what would be the likely outcome
- Consider relaxation techniques and exercise to reduce stress
- Talk honestly with family & friends, share your problems & feelings
- Carefully evaluate your economic situation (see our separate checklist!)
Make the crisis your ally
- You are now ready to deal with your adversaries and make them your partners in a venture where everyone can benefit
- You need to believe in the basic viability of your business
- Communicate your belief to all concerned
- Contact the bank , financial institutions & major creditors and set up individual meetings to update them on the status of the company
- Let them know that you “expect” their support
- Set up the meetings as far in the future – 4/5 weeks away to buy time!
- For these meetings you will have to present a recovery programme
Develop the Business Rescue Plan
- Explain the conditions that created the crisis
- Explain how you are going to deal with each of the conditions
- List action already taken, and anticipated benefits and when they will take place
- Explain action planned to reduce the level of costs and operations
- Summarise significant changes in the organisation structure, responsibilities, reporting relationships, jobs etc
- Discuss the sale of non-income producing assets and potential sales prices
- Describe the new financial controls that have been put in place
- Specify a date when a business plan & financial statements with supporting assumptions will be available
- Let the bank and financial institutions know what you need from them –
- Maintain current levels of facilities
- Defer interest payments for “X” months
- Transfer of certain assets directly to them to set off debts
- Convert debt short term from to long term
- Let key creditors know what you want from them
- Continuation of existing terms or extended terms for the next “X” months
- Conversion of current debt into a formal loan or commercial bill
- Barter deals
Format of the recovery Programme
- Programme to reduce expenses
- Programmes to increase cash flow
- Changes in management & organisation
- Proforma income statements, cash flow & balance sheet
- Supporting assumptions
- A short term business plan ( 12 months) & if appropriate a longer term 2/3 year plan
- A careful explanation of reasons for past problems
- A scheduling chart ( time line) showing when all the above will be accomplished
Conclusion
By analysing your findings, you will now be able to understand the fears of bankers, financiers, creditors and people, who must deal with you! Remember fear is a two way street! The banks and creditors must know that restoration & revitalisation are in motion.
Source: How to Turnaround a Financially Troubled Company By Ronald Kibel (McGraw-Hill)
Contact the Head of our Business Rescue Unit:
Alastair Macduff
+ 27 76 977 3066
+ 27 11 442 5494