Company turnaround is possible with the right resources and assistance. The first step in turning your business around is to identify the main problem. The typical response to turning around a business that’s failing is to reduce expenses, increase sales and downsize the workforce. However, it’s imperative to analyze what is causing the slump. Next, track the cash flow of the business through analyzing the profit and loss statement. Once this information is obtained, it’s crucial to decide what type of turnaround help to seek.

Avoid making the mistake of thinking it’s impossible, there’s no one who can help me with turning around my business. Explore information about how to turn around a troubled business or save on expenses with a do-it-yourself turnaround business strategy. Opt to find a consultant that specializes in servicing a troubled business. Pursue professional advice to develop a plan to turnaround your business. Before resorting to putting the business up for sale, consider the following:

1. Review your business plan and make the necessary changes to turn around the direction of your company.

2. Research ways to find additional training or resources to assist in turning around your business.

3. Use experienced consultants that specialize in business turnarounds.

Action Steps
The best contacts and resources to help you get it done

Identify profit and loss to initiate business turnaround

Access profit and loss data for your business. Turnaround basics requires research into whether it's a matter of declining sales, excessive overhead and operating expense, indebtedness, poor quality product or failure to service customers. Cash flow reports that trace business liquidity, credit and cash flow can give insight into business finances.

I recommend: Simpleplanning.com offers a free download demo of their profit and loss software. Orion Systems provides an online profit and loss statement, balance sheet and a cash flow statement that automatically performs all math calculations.

Gather resources to develop business turnaround strategy

There are a variety of methods to address business turnaround. Enlist the help of an experienced turnaround consultant to begin the process of restoring your business.

I recommend: Lanier Turnaround Group offers a free trial for online coaching to help start your business turnaround. HK Turnaround has free business web casts and consultation services.

Hire a full service restructuring company for broad-based turn around recovery

A full service debt restructuring company can address a wide range of ways to solve your business dilemma. Turning around a business may require solutions such as the addition of capital to finance expenditures that exceed allotted funds, up to paying for legal assistance for debt relief and bankruptcy.

I recommend: Corporate Turnaround offers free initial debt consultation services with the goal of avoiding bankruptcy. Focus Management Group is a full service company ready to assist with a recovery plan to turn around your business.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Turning your business around may require a simple solution such as developing a new business plan to capitalize on the changing market and economy.

Whether you need to revitalize your company or actually resuscitate it, turning around a troubled business requires focused efforts. You must focus on the crisis and the opportunity at hand. Assess just how dire the situation is by figuring out if your company is just a little off track or needs professional help to make a complete U-turn.

Turning a troubled business around may involve harsher methods than usual to deal with problems, much like avoiding an imminent wreck can require slamming on brakes or veering sharply. It can be broken down into three processes:

1. Realize the root of the problem
2. Rethink your business strategy
3. Restructure the business process

Action Steps
The best contacts and resources to help you get it done

Find the source of the problem

Is spending and debt out of control? Do you have the wrong people in place, not enough or too many? Does the product or service you offer successfully target the needs of the customer/market? Facing these issues will help focus your rebuilding efforts.

I recommend: The Phoenix Effect: 9 Revitalizing Strategies No Business Can Do Without" by Carter Pate and Harlan Platt maps out a nine-step path to corporate revitalization. To help rethink your strategy, search for a business coach by state at the Professional Business Coaches Alliance.

Know your financial situation

An honest assessment of your company's financial strengths and weaknesses — including capital, debt and cash flow — is critical for turning things around. This will help determine how much financial leeway you have and where to stop the bleeding.

I recommend: Download a free template for calculating two-year profit and loss statements from Microsoft. Order the audio course "The 10 Cash Flow Rules You Can't Afford to Ignore."

Assess your market

Is your product on target? Is there a growing or shrinking demand for it? The answer to these questions, and a new marketing strategy, will help point you in the right direction as you make changes.

I recommend: Order marketing plan software from Palo Alto or Template Zone. Download free marketing plan templates from Microsoft Office or a free marketing guide from Morningstar Multimedia. Search for a marketing consultant by bids at eWork Markets and Guru, or by expertise at American Marketing Association.

Hire a turnaround consultant

If you need professional help, hire an independent consultant or turnaround firm.

I recommend: Look for a consultant from the Association of Certified Turnaround Professionals. Download a list of ways to tell if a turnaround consultant is really necessary from Allen Web. Use the checklist from the Turnaround Management Association to know what to look for in a consultant.

Meet with key people

Write a list of the people who need to be brought into the loop. This may include key staff, advisors, directors and your accountant. It also may include certain vendors or your banker.

I recommend: Get tips from TRG on communicating with your inner circle during a crisis.

Address staffing issues

Staffing can be one of the toughest parts of turning around a troubled business if it requires laying off or firing people. Conversely, an increase or shift in production could involve new hires.

I recommend: Get tests to assess employee fit and individual strengths from CPP. Refer to Integrity Center's tips for firing workers, or download Joanne Sujansky's e-book "How to Fire Someone." Find a human resources consultant from the Society for Human Resource Management to help with hiring and firing.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If management is the problem, bring in new managers as early as possible in the revitalization process.
• •  When communicating change, whether the message is brief or detailed depends upon what the particular audience needs to know.
• •  Don't add grist to the rumor mill. Communicate change proactively.
• •  Assemble year-to-date and year-to-year comparisons and other data in understandable chart form so you can base your decisions on concrete facts.