How to Restructure Your Firm including the Organization & Debt
How to restructure? Here is our 7-step “how to restructure” procedure that we coach businesses through:
Step 1: Get a handle on cash
This is the key how to restructure step. You will need to understand cash
flow at your company. How much you are spending and why you are spending
it. You also need to understand where the money is coming from and when
you can expect to receive payments from customers.
Step 2: Find your profitable core business
You have a profitable unit in your business somewhere. The trick is finding
it. Sometimes accounting methods obscure it. Sometimes salespeople hide
it because they only want the “prestige” clients. For your
firm to survive, you must look hard at the books and the sales reports
to find your core business.
Step 3: Develop a financial and organizational plan (turnaround plan)
After you have found the profitable core business, you then need to develop
a turnaround strategy that rebuilds your firm around the core business. As
part of this work develop a sensible budget and organizational design that
supports the core business. Cut everything else.
Step 4. Develop a funding strategy based on your turnaround plan
This should come direct from your budgeting work.
Step 5. Get agreement from your board and bankers to the plan
Now comes the difficult part. You need to get agreement to your plan from
your board and bankers. Usually, both groups will be skeptical of your
plan because your track record is poor from their view. Nevertheless,
you must have their support to succeed with the turnaround. We will coach
you through this critical phase.
Step 7. Carry out your plan
Self-explanatory … but you must do it right the first time. We will
help you here.
Step 8. Negotiate with creditors for reductions of the amount
you owe
Usually your budget will need the creditors either “take a haircut”
or take monthly payments for overdue invoices. Either way, you must be
able explain your turnaround plan to get this step done.
To find out more about these steps, buy a copy of The Insider Secrets to Saving Your Business: The Step-By-Step Turnaround Guide by Kevin Muir. See how to restructure book for further explanation of these steps.
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