Turning Around a Troubled Business
Drastic measures and focused efforts can get you back on trackWhether 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:
- Realize the root of the problem
- Rethink your business strategy
- Restructure the business process
Find the source of the problem
Know your financial situationAn 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.
Assess your marketIs 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.
Hire a turnaround consultantIf you need professional help, hire an independent consultant or turnaround firm.
Meet with key peopleWrite 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.
Address staffing issuesStaffing 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.
Business.com's guide on properly firing an employee. Find a human resources consultant from the Society for Human Resource Management to help with hiring and firing.
- 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.
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