If a business has been underperforming for a number of years, or if it is in financial distress, turnaround management may be the best approach. A turnaround manager or interim turnaround CEO can take the company through a restructuring process leading to solvency.
In distressed companies, management has often been at the helm for years, not sure how to fix the business. Although they have tried many different approaches, success has remained elusive. The owners are dedicated to turning the business around, but they’re out of ideas of what to do.
In these situations, a turnaround manager or an interim turnaround CEO is often the best solution. Someone with experience, a fresh perspective and without the ‘Not Invented Here’ attitude. Someone who can quickly assess the situation, make the tough decisions necessary to turn the business around, and implement solutions.
Causes of Poor Business Performance
A company’s lack of performance is usually the result of a multitude of factors. Rarely is it just one thing. Many factors, large and small, can contribute to a company’s lack of performance, such as:
- Sales decline
- Poor management decisions
- Weak execution
- Lack of sound business strategy
- High costs
- Poor inventory management
- Lack of management skills
- Personnel issues
- Insufficient resources
- Lack of new products
- Outdated technology
- Weak competitive position
- Excessive debt
- Weak accounting practices
- Low profits
- Poor pricing strategies
- Focus on the wrong markets
- Over (or under) diversification
Turnaround Management Process
Although each turnaround situation is unique in its own way, the typical turnaround process for a small business involves a number of key stages:
If your business has been underperforming and you’re considering bringing in a turnaround manager, do not hesitate to contact us.