The global economic crisis has many companies still feeling the pinch. The Maver Management Group has worked with a number of clients and helped them turn around their business situation. We have also seen and reviewed other companies that continue to struggle. There are some common factors that differentiate the successful from the non successful other than the fact that one set has worked with us.
Seven of the most important elements are:
1. Ability to prove business viability. Your business plan must outline clearly the expectations and how you will specifically deliver those expectations.
2. Ability to manage key stakeholders. Once you have the plan that proves viability, you must be able to communicate it clearly and persuasively to all stakeholders.
3. Management credibility. A key element of instilling confidence in the plans is the credibility of the management group. It all starts with the top group. If they can’t generate respect and confidence, the plans will never happen.
4. Business reputation. Positive branding not only brings higher margins, it also contributes to the selling of the company’s viability and the products to the clients and customers. And to the Board, the banks and the suppliers!
5. Maintaining supplier credit. As businesses restart their growth, they require inventory build and funding in advance of the revenue they generate. You need to utilize the credit and payment terms with suppliers to generate the float.
6. Securing internal and external funding. Companies must have the funding required to support the business building initiatives. Without the funding plans, progress will stall.
7. Quality of the people. All progress eventually traces back to the people. Companies with the best people tend to rise to the top. Assess your people and make sure that the top ones are in the most critical positions. They will make the turnaround happen.
Some businesses are unsure whether they need assistance in turnaround management. Others find their company’s problems too hard to face and leave it too late, which often ends in insolvency. So how do you know when to call for help? The key warning signs to call in a turnaround management specialist are:
• If you continue to experience a substantial decline in sales and/or margins or have lost a major customer
• If you are struggling to refinance, raise additional capital or are likely to breach your banking covenants
• If cash flow is becoming harder to manage and creditor pressure is building
• If you are experiencing an increase in turnover at the senior management level
If you have any of these elements, you need turnaround help. You are not going to be able to do it yourself. Generally, companies in this situation have neither the expertise nor the bandwidth to be successful in turning the business around.
Contact us. The Maver Management Group can help.
John MaverPresidentMaver Management Group(925) 648-7561Maver Management