Tony Mitchell
Tony's recent articles
- A Year of Celebration
19th January - Bankruptcy Tourism – Another E.U. Headache
20th October - The Third Sector Under Pressure
14th July
Turnaround is for the Sick not the Dead
21st October 2010 08:39
As we all get to grips with the aftermath of the Strategic Spending Review many companies over the coming months will be facing the brutal assessment of whether they have the viable core business within their company to survive the next twenty four months. During this period, the skill and experience of a turnaround professional can be the difference between survival and failure.
There are a number of basic constituents that make up a successful business turnaround and I have already mentioned the first, a viable core activity to act as the foundation from which the company can be rebuilt. A company built on sand will very quickly be washed away as market liquidity dries up further.
Funding is the next vital ingredient which comes from a number of sources; internally, realising surplus assets, refinancing, bank borrowings or private equity. Each of these funding sources warrants a blog of their own but for now, suffice to say, all represent a challenge.
Any turnaround requires the various stakeholders to buy in to the turnaround process. They need confidence in the plan and the process, be it the employee on the shop floor or the bank manager who needs to convince his credit sanctioning manager that the business is worth supporting. Suppliers who have probably seen deterioration in the speed their invoices are paid will also need convincing as will customers who need certainty of supply.
A clear vision or goal of where the business is going, supported by measurable targets, is also essential and is the road map of any successful turnaround.
And finally time is required to allow the turnaround process to deliver its results. Turnaround practitioners can relieve the sick of their ailments and restore them to health, they cannot revive the dead and therefore as difficult as it may be the early involvement of a turnaround specialist can be the difference between survival and liquidation.
