Do you or your clients need a turnaround specialist?

The current credit crisis is causing significant problems to a good number of businesses, many of whom haven’t experienced anything like this before.

Are you:

• Experiencing a downturn in your business?
• Suffering from cashflow pressure?
• Experiencing a strained relationship with your bank or other financiers?
• Sitting on assets you cannot sell?
• Preparing your business for a sustained period of an underperforming economy?
• Wondering which way to turn?

If so, we urge you to put together a survival plan - some examples of simple steps to follow are:

• Establish your up to date financial position
• Establish the core issues facing the business, which may be:
  • Trade creditor pressure or PAYE/VAT arrears.
  • Lack of trust in banking relationship.
  • Slow-selling assets.
• Identify solutions to the key business risks.
• Build in key milestones to your planning.
• Project forward the outcome of your chosen route.
• Build in a margin for contingencies.

Solutions need to be sought at the earliest opportunity. Proper planning can prevent poor performance. Generic solutions may include the following:

• Improve the dialogue with your bank manager and build mutual trust and understanding. Demonstrate how well you understand your business risks and the commitment given to planning for success.
• Negotiate with your suppliers, always offer them something which will help maintain co-operation and continued supply.
• Prepare a new business plan and financial projections.
• Negotiate a time to pay arrangement with HMRC.
• Improve cash position or reduce indebtedness to more manageable levels by the strategic sale of assets.

Once you have your survival plan, the next task is to communicate this to the interested parties, such as HMRC, the bank, your accountant and your clients. It is absolutely essential that your message is clear and logical.

Once meaningful dialogue has been established then it is crucial your credibility is maintained by making the plan work. Communication is the key and should there be any further issues or concerns it is important to keep the affected parties informed.