This is the second volume in our 4 part series on creating, running, and growing a successful small business. Our approach is simple, we did our research and tested it in our own companies. Once it was proven internally, we offered it to our clients and expanded the robustness of our products so business owners can take greater control over their future.
Here is how to approach this volume.
What if you were asked to walk in and take over somebody else's company, what would you do?
We wrote this volume based on our experience fixing dying companies. The only difference in DIY Turnaround is what if the company you were turning around was yours?
Chapter 1: How To Turnaround a Business - An Overview Consulting: The 13 Shows (Chapters)
How To Turnaround a Business - An Overview
During a Turnaround, Leadership & Management looks different:
This requires a vision of what it looks like when you get there and the 'burning platform' on why staying where we are will not work.
This starts with the Owner. Hiring someone to do this is different from doing it yourself because the outsider has no attachment, nor are they guilty of anything. They didn't create the mess and therefore are open to all options. That is not the case for DIY. You did it and your mindset needs to own it. Also most business owners at this point in their company's history are suffering depression. You must move beyond feelings of guilt and embarrassment. If you are not positive about the turnaround and throw all of energy behind it - bring in an outsider otherwise you are chasing bad money with good.
Now that your head is in the right place, start with building a foundation that should have been in place since the founding. The following are the 4 Principals we always build before fixing anything.
Short Term Focus
View this as triage. What is the current situation? Where are you hemorrhaging money, customers, employees etc? What is the root cause of the bleeding? Then fix it! We always start with finding the money laying around - inventory gathering dust, accounts receivable not collected, missed accounts payable discounts, and lines of credit. Our experience is the first time you aggressively go after these issues will add 10-20% more cash. We use those dollars to help fund cost reductions in production, marketing, sales, and people.
Long Term Focus
Once we have righted the ship and it making a profit, the focus shifts to our journey and the first port of call. The near future includes scalability - when growth starts what is getting in the way and how much money will we need. Part of the money issue is the source of funding - are we going to pay for this out of sales or look for capital investments? Beyond the near future is looking at the external environment for threats and opportunities. What is coming down the road we should prepare for before it arrives?
We started with operating principles and we close with what happens when those 4 are assembled together - Managing By Objectives. It is how we transform business goals and objectives into everyday behaviors. If the business is running on a MBO System, the turnaround is almost complete and you transforming an under-performing / zombie company into a market leader.
new choice for BUSINESS SEARCH
All IBGR Shows Notes are available for download