Business Turnaround Consultants Show Steps to Fix Financially Strapped Businesses
One of the premier turnaround consultants, Kevin Muir, in his excellent training manual, The Insider Secrets to Saving Your Business, gives four phases to restructuring your business. From our turnaround consultants engagements, we can confirm that these phases are valid. They are the general outline that all turnaround consultants and business leaders should follow to fix a sick business.
These phases are:
1) Personal Protection Phase – Your first action item in any business restructuring is to protect your family’s wealth. When your firm is in trouble, your personal assets are at risk from creditor and investor lawsuits and from bankruptcy court review if your have to file. Talk to an estate planner and a lawyer to find out how to protect your assets in your state or country.
2) Emergency Phase – In this phase you must stabilize the cash flow of your firm. As the leader of your firm, you must control cash and cut all unnecessary spending and payouts. If you can get through this phase successfully, your firm will likely survive.
3) Turnaround Phase – During this time you must discover profit making products, services or divisions that you can rebuild your firm around. You then create a business plan based on your core businesses. You then deliver your plan through strong leadership and driving accountability throughout your organization.
4) Growth or Sell Phase – After you have restructured your business and it has had a few quarters of profits and positive cash flow, you then must decide to either continue to grow the business or sell it. If you decide to grow, then you need to find extra financing and effective, low cost marketing methods. If you decide to sell, then you need to “dress-up” your firm and decide what you want from the company’s sale.
Mr. Muir explains these phases as part of two free lessons that he offers on his website. To find out more about the four phases go to turnaround consultants handbook.
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