Running a small business isn't easy. Inevitably, profits sometimes wane and customers may walk away. When that happens — maybe even before it does — it's time to make some changes. Occasionally, those changes can be small. If the wounds are large, however, the bandage will need to be big, too. Restructuring your business — reorganizing your employees, products and financials — might just be the big solution you need if your company:
- Is in financial or legal distress.
- Wants to re-focus its core business holdings.
- Needs to adapt to rapid growth and organizational change.
Evaluate your problemsAnalyze your situation to determine if your problems have solutions. Are your company's ailments a symptom of its organization, or are they a sign that your business simply isn't viable? Restructuring can save a salvageable business, but it can't help a failed idea succeed.
Develop a planCreate a restructuring plan with which to grow your business and consolidate it. Share the plan with your managers, staff and important third parties, including your creditors and vendors.
Realign your teamRestructuring should include reorganization of your employees. Start at the top with an evaluation of your management team and work your way down the company totem pole. Replace weak members of your team and eliminate extraneous positions.
Restructure your debtsUse the restructuring process to put your finances in order. Take out new loans, if necessary, to fund restructuring, but work with your accountant to make sure your fiscal plans are sound.
- Lower costs by building intimate relationships with a small number of vendors. Keep them abreast of your company's changes and work with them to maintain affordable service as you move forward with reorganization.
- Restructuring can be as simple as moving things around; be willing to shift financial and personnel resources from less profitable projects to those that make you the most money.
- As you restructure, maintain high customer service standards by answering clients' questions promptly and honestly. Instead of hiding changes from your customers, use restructuring as a means for communicating with them.
- Consider strategic restructuring, whereby you'll partner with another business - via a merger or joint venture, for instance - in order to save yours.
- A restructured company needs entirely new policies and procedures. Wipe your slate clean and meet with remaining employees often to present company goals and get input on company culture.