Do you want to hire a turn around specialist but you don’t know what to expect? If YES, here are 10 things a turn around specialist can do for your business. Businesses go through hard times and the economy or overall market conditions negatively affect businesses. For this reason, there are professionals who are dedicated to helping businesses get back on their feet after turbulent times.
Business owners who truly want to save their business are reaching out to professional help; professionals that will help them with setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions and guiding them with strategies on how the ends (goals) will be achieved by the means (resources).
The scope of the services offered by a turnaround specialist ranges from negotiating payment plans with your creditors and suppliers to firing employees, and they usually charge hundreds of dollars an hour and require payment upfront.
If you are wondering what a turn around specialist can do, here are the ten most important things a Turn Around Specialist Will do for your business;
10 Changes to Expect in Your Business When You Hire a Turnaround Specialist
Table of Content
- 1. Help Prepare a Short-Term Cash Projection
- 2. Help Prioritize Payments
- 3. Help You Review Your Staff Strengths
- 4. Help You Access Funds (Inject Funds in the Business)
- 5. Help the Company Buy More Time from Creditors
- 6. Give the Business Strategic Business Direction
- 7. Create Sustainable Commercial Advantage
- 8. Create Winning ICT Structure and Online Visibility
- 9. Create Winning Sales and Marketing Strategy
- 10. Help with Report and Implementation
1. Help Prepare a Short-Term Cash Projection
The fact that one of the key factors that results to business failing is lack of cash flow means that the first thing a turnaround specialist is expected to do is to address the issue, howbeit on a short-term basis in the first instance. They will help you prepare a short-term cash projection.
During this period, a turnaround specialist will help your estimate your cash needs for the next two to three months so as to enable them help to identify ways to reduce expenses, set your spending priorities right and plug any loopholes that leads to fund wastage.
2. Help Prioritize Payments
Before a business fails or when a business is in distress, most often than not, the business owner would have borrowed money to try to savage it. So, if a turnaround specialist is invited, one of the things they will do is to help you offset this debt in such a way that it won’t affect the business.
They will help you determine who your crucial vendors are-the ones you can’t operate without. For example, there are vendors that you deal with daily so as to continue to run your business, especially supply of the goods that you retail or service providers.
Turnaround specialist will advise that if you owe vendors who are not currently providing supplies that you need to run the business, you should tentatively suspend or reduce the amount your pay or remit to them monthly so you can face crucial payments.
3. Help You Review Your Staff Strengths
Another factor that leads to businesses failing or going into distress is having enough staff members that they need. As expected, one of the things that a turnaround specialist will do for your business is to help you review your staff strength.
In doing this, they will be able to help you identify staff members that are key to the growth and sustenance of the business and those that you may not need for the time being. Turnaround specialists will help you redefine job descriptions so as to eliminate duplicates and merge similar JDs to reduce waste of resources. During this process, some employees will be retrenched.
4. Help You Access Funds (Inject Funds in the Business)
A larger percentage of businesses that hire the services of turnaround specialists are going through financial troubles. So, if a business is suffering a cash-flow crunch, turnaround specialists will help consider some alternatives.
One way a turnaround specialist will help you access funds and increase your cash flow is to work with an account receivable lender. Unlike banks which base a loan on your collateral and credit history, an accounts receivable lender advances you the cash based on the invoices you have outstanding.
This kind of lender pays you a portion of what’s owed you, charging a fee based on the total amount financed. (The fee ranges from 3 to 5 percent in most cases.) Another alternative, which can help you weather a downturn, is to apply for a commercial credit line. But the time to apply for a commercial credit line is long before you need it.
5. Help the Company Buy More Time from Creditors
As pointed out earlier on, before a business fails or when a business is in distress, most often than not, the business owner would have borrowed money to try to savage the business. So, if a turnaround specialist is invited, one of the things they will do is to help you interface with your creditors and buy more time.
If you borrow money from a bank and your business is having financial problems, you have to persuade the bank on why they shouldn’t pull the plug on your loan yet and it is the job of a turnaround specialist to help you pull this through. Turnaround specialists often help the owner buy more time with the bank.
For example it is expected that if they owe the bank $10 million and they are worth $2 million, they should sell right away, but a good turnaround specialist will often help find them a merger partner and sell the business [company] as a going concern which will result to a win – win situation.
6. Give the Business Strategic Business Direction
Another key input that is expected from a turnaround specialist that knows his or her onions is to help give the failing business strategic business direction that will lead to growth and profit.
An experienced turnaround specialist has the ability to combine the innovative, perceptive and holistic insights of a core professional with the pragmatic and systemic skills of a planner to guide strategic direction in context of business key needs, brand intent, design quality and customer values.
7. Create Sustainable Commercial Advantage
Part of the reasons why a business fails could be that they lack commercial and competitive advantage in their area of operations. In view of that, when a turnaround specialist is invited, part of what is expected from him or her is to create a sustainable commercial and competitive advantage by applying innovative and quantitative ideas and systems that will position the business to gain more sales and customers.
A turnaround specialist will help your business leverage on evidence and reason to make circumstance – dependent decisions that shape the development of the business towards a set of desired outcomes of profitability and growth.
8. Create Winning ICT Structure and Online Visibility
Usually after reviewing why some businesses fail, you will notice that they were not able to take advantage of the emerging ICT model that is helping businesses scale up and take on the global market.
An experienced turnaround specialist will help you develop an IT strategy that is aligned with the business strategy to implement systems to give your business processes efficiency and productivity gains and therefore a possible competitive advantage. They will help you leverage on the internet to give your business online visibility.
9. Create Winning Sales and Marketing Strategy
A turnaround specialist will help provide operating advice and assistance to your business on marketing issues, such as developing marketing objectives and policies, sales forecasting, new product development and pricing, licensing and franchising planning and marketing planning and strategies.
You will quite agree that when a business sales start dropping, it won’t be long before the business start running at a loss and then go bankrupt. This is why part of what is expected from a turnaround specialist is to help revive the sales of the business hence creating winning sales and marketing strategy.
10. Help with Report and Implementation
Lastly, what a turnaround specialist is expected to do is to ensure that they help with a comprehensive report and implementation of the plans listed above. A turnaround specialist will provide a draft report to the internal stakeholders to ensure that the facts and observations are agreed. The agreed scenario will then be discussed with the major external stakeholders obtaining agreement on the way forward.
Please note that during the review period, results of the observations and suggested solutions/changes to management and workplace practices are, if possible, incorporated into the plan. The cash flow forecast is also refined and tested so that accurate forecasting can be put in place.
The last phase of what is expected from a turnaround specialist is to ensure that the various initiatives are implemented and a “three-way forecast” (Cash Flow, Profit & Loss and Balance Sheet) is produced.
If you hire a professional turnaround specialist, you should be willing to take the advice they will be giving and do exactly what they recommend. This is why it is always advisable to choose a turnaround specialist you can trust; someone you will feel comfortable communicating with.
Lastly, you should be prepared because the turnaround process for a failed or failing business can be long and painful, especially if you have spent years building a successful business.