In my 30 plus years of experience with entrepreneurs and startups, I have learned that businesses survive and thrive when certain core principles are in play. A key principle is commitment.
The first thing that a struggling business owner or management must understand is that their commitment along with the employee’s commitment are critical components to the success of the business. Every business must have a mission and that mission requires commitment that should be vigorously pursued every day.
Whether the business is established (i.e. small, midsized, or fortune 100) and fallen on hard times or purchased as distressed, a turnaround strategy may be required. In order to have a successful turnaround, a company must first identify its problems, consider changes in management and develop and implement a problem-solving strategy.
When a company is operating in a situation of jeopardy, there is nothing more important than hiring an experienced, professional turnaround manager that will apply sound practices and bring a fresh understanding with complete objectivity to a troubled business.
The consultant would know what to do about extensive debt, overextended credit, and working with little or no margin for error. A consultant would also know how to;
- Identify profit centers.
- Manage and scale back costs.
- Access capital or investors who share the commitment to the company’s mission.
While much of the focus of rehabilitation is on the immediate financial concerns, let’s not forget about marketing. Many businesses I’ve had the pleasure of assisting often overlook this component while focusing on simply keeping the doors open and creditors at bay. A good turnaround consultant will address a company’s marketing efforts and steer strategies in the direction of the current customers. The economy has influence on who the customers are.
Customers can be won or lost based on economic ups and downs. A company’s marketing strategy should always reflect who the customer happens to be in that particular time and place.
When something is not working, change is necessary. This change could reference key employees, mission statements and, marketing strategies. According to Paul Rauseo, managing director at the George S. May International, a Chicago consulting firm, “If a business is in trouble, it is quite necessary to not panic, get creative, and get on with business. If something is not working, make changes sooner rather than later.”
A turnaround consultant is trained to make critical decisions quickly, effectively and efficiently. If companies recognize trouble in the early stages, there is a much greater chance for survival. The consultant knows that they have to start at the 10 yard line and drive the ball down the field for a touchdown.
Resources:
Turnaround Management Association (TMA)
Article by Karen E. Klein January 27, 2009
Business Insider