Business Turnaround The 5 Strategies For Success

The business world is full of successful turnaround stories, not least Steve Jobs, Walt Disney and Donald Trump.

While there are also countless examples of businesses that failed to recover after a setback, the successful turnaround stories make it clear that, with the right strategy, it’s possible to turn a failing business into a major success.

In this video, Mitch Hahn discusses five strategies that can help your business to thrive. Whether you’re going through any cashflow, investment or customer issues at the moment, or you simply want to stay one step ahead, watch it now for some brilliant advice.

At Nordens we have a Business Turnaround Department which has a 100% success rate. I spent a bit of time with them and have taken 5 key things that I thought would be beneficial to share with you to help turnaround your business should there be any problems, or should you anticipate there being any problems in the future.

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So let’s get straight into it shall we… The business world is FULL of successful turnaround stories. n 1997, Steve Jobs came back to a struggling Apple Computer and turned it into one of the largest, most cash-rich companies in the world. Walt Disney faced millions of dollars in debt in the 1930s before turning his studio around with “Snow White and the Seven Dwarfs” in 1938. President and Real estate mogul Donald Trump neared bankruptcy in the early 90s before rebuilding his property empire.

While there are also countless examples of businesses that failed to recover after a setback, the successful turnaround stories make it clear that, with the right strategy, it’s possible to turn a failing business into a major success.

Is your business struggling due to debt, poor cash flow or a product that’s cost a lot of money and just isn’t working as expected? With the right combination of strategy and tactics, it might be possible to facilitate a successful turnaround.

In many cases, turning around your business is as simple as stripping away aspects that aren’t making money and focusing on its core.

1. Cut away costly investments and focus on your core business

One of the most common reasons for business failure is lack of focus. Over time, an otherwise successful company can invest in so many side projects that its cash can become strained, negatively affecting its core business.

Does your business have several costly investments that have failed to produce any substantial revenue? If your business is losing money on new products and services, try cutting them away to focus on your most successful ones.

It’s tempting to think of growth as something that only comes from new products or services, but the reality is that one of the best ways to fuel growth is to focus on the products and services that are already working for your business.

If your business is short of cash and throwing away money on experiments, try to cut them down to size. The extra cash could be much better spent improving your most successful products, services and offers.

2. Use a CVA to write off some debt and improve cash flow

Is your business struggling to keep up with its debt repayments? If your business owes a large amount of money to its creditors and can’t keep up with its payments, entering into a CVA could be a great way to improve its long-term cash flow.

A CVA – or Company Voluntary Arrangement – is an agreement between a business and its creditors regarding repayment of its debts. With a CVA, a company can write off some of its debt and pay its creditors through a recurring monthly payment.

This means improved cash flow, since debt is paid back monthly on a realistic level that allows the company to keep trading. It also means stability for the business, as its creditors receive legal reassurance that they will continue to get paid on time.

When your business is insolvent and in need of serious cash flow help, a CVA can be an excellent solution. Over time, your business can repay its creditors and continue trading without having to worry about being forced into compulsory liquidation.

3. Sell assets to improve cash flow and streamline your business

Does your business have valuable assets that could be sold for cash? If your business is in a tough cash flow situation and needs to raise cash to keep trading, selling some of its assets could be a good solution.

Numerous businesses, from small companies to large corporations, have sold assets in order to improve cash flow over the years. From property to equipment, selling a valuable asset can provide your company with a source of immediate cash.

While selling assets is a great way to facilitate a short-term turnaround in your cash situation, it isn’t always a long-term solution. To completely recover, your business needs to have steady cash flow, not just one-off cash from asset sales.

Despite this, the cash raised from an asset sale can be extremely useful for helping a company deal with its debts and regain financial stability. If your company needs to improve its short-term cash flow, selling some of its assets could be a good option.

4. Focus on your existing customers and clients, not on finding new ones

When your business needs to improve its cash flow, one of the best strategies is to turn to your existing customers and clients in order to close new deals and generate more sales.

It’s far more costly – not to mention far more time consuming – to reach out to new customers than it is to market to existing ones. Your business’s existing customers already know you, trust you and understand the process of working with you.

If you need to raise cash quickly to avoid insolvency or allow your business to grow at a faster rate, try offering a low-cost offer to your existing customers to generate cash and give your business the resources it needs to operate effectively.

Another simple way to improve cash flow using your existing customers or clients is to offer a pre-payment discount. This gives your business the cash it needs before it fulfils orders, preventing it from having to rely on a line of credit.

5. Raise capital using loans or investment to fuel your business’s growth

Some businesses need scale in order to be successful. If your business is failing due to a lack of growth, outside finance – whether in a loan or equity investment – is an excellent way to speed up its growth and development.

Since investing is often a risky prospect, not all companies can access loans, finance solutions or venture capital. Most of the time, your company needs to have a record of financial success in order to get cash from a lender or equity investor.

This doesn’t mean that struggling companies can’t access loans – they often can if their history shows some degree of success. However, struggling companies often have to make do with more expensive credit than their successful counterparts.

Does your company need to speed up its growth in order to become successful? If your company depends on scale in order to be profitable, using outside investment or loans to fuel growth could be an effective strategy.

I think these are some fantastic tips to take away for anyone watching this video, whether you are going through these issues at the moment, or whether your business goes through this in the future.

We have a department here at Nordens which has a 100% success rate of business turnaround together with a corporate finance department which could really help you and your business. If you would like to chat further, please get in touch.

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