SMALL BUSINESS TURNAROUNDS

1
SMALLBUSINESSTURNAROUNDS

• COLIN BATCHELOR

30.08.2006
2
STRUCTURE OF PRESENTATION

• Some introductory remarks.
• Recognising the need for a turnaround.
• Stabilising your finances.
• Deciding what to do.
• Making it happen.

3
A SMALL BUSINESS

• Less than 100 staff.
• Turnover less than R20m.
• Overdraft less than R50m.
• Owner/managed.

4
RESPONSES TO CRISIS

• A gold fish.
• An ostrich.
• A rabbit in the headlights.
• A headless chicken.
• A sheepdog.

5
TOOLKIT

• The importance of business skills.
• Managers are critical in a crisis.
• What to do in times of difficulty.
• Take the time to do a business health check.

6
SPOTTING THE WARNING SIGNS

• Why businesses fail.
• The types of business failure.
• Normal business failure.
• Avoiding failure.
• The symptoms of normal failure.
• Checking your businesss health to spot the
  warning signs.
• Take an A score test.

7
A SCORE TEST
8
A SCORE TEST CONTINUE
9
TURNAROUNDS

• Obtaining support for a turnaround.
• Understanding your options.
• The conditions necessary for a successful
  turnaround.
• The phases of a turnaround.
• The turnaround process.

10
UNDERSTANDING YOUR OPTIONS

• Sell.
• Close.
• Fix.

11
CONDITIONS NECESSARY FOR A SUCCESSFUL TURNAROUND

• A viable business.
• Time.
• Money.
• Vision.
• Management.
• Commitment.

12
PHASES OF A TURNAROUND
13
UNDERSTANDING WHY BUSINESSES FAIL

• The causes of normal failure.
• The five key areas.
• - Management structure
• - Strategic challenges
• - Financial control
• - Operational control
• - One-off projects

14
UNDERSTANDING YOUR FINANCIAL POSITION

• What you need to know.
• Insolvency.
• Cashflow forecasting.
• Support from the bank.

15
MANAGING A REAL CASH CRISIS

• Wealth warning.
• Achieving balance.
• The key steps to survival.
• Improving profits.
• Improving management.

16
MANAGING A REAL CASH CRISIS

• Controlling the cash you have.
• Obtaining more cash from normal trading.
• Obtaining more cash or credit from elsewhere.
• Reducing and/or controlling outgoing cash.
• Reducing the amount of cash needed to trade.

17
UNDERSTANDING AND CONTROLLING YOUR FINANCIAL
PERFORMANCE

• What you need to know.
• Profitability.
• Financial stability.
• The management/financial information you need.

18
SETTING THE STRATEGY

• Its your business what do you want to do?
• Setting your personal goals.
• Industrial trends PESTER analysis.
• Competitive advantage.
• The value chain.

19
MANAGING MARKETING

• Successful marketing.
• The importance of marketing.
• How to sell your product.
• Tailoring marketing strategy the four Ps of
  marketing.
• Managing the sales process.
• Managing the sales force.

20
THE VALUE CHAIN
The mission The lowest cost widget
WHAT THE CUSTOMER WANTS
SET YOUR BUSINESS UP TO DELIVER
21
MANAGING CHANGE

• Managing and motivating yourself.
• Understanding your businesss structure and
  culture.
• Assessing your team.
• Managing people and the process of change.
• Managing a project.
• Getting stakeholders on board and keeping them
  there.

22
SUMMARY AND CONCLUSION

• Recognise the need for a turnaround.
• Stabilise your finances.
• Decide what to do.
• Make it happen.
• Conclusions.

23
ACKNOWLEDGEMENT

• This presentation draws extensively from,
• - Turning a business around by Mark Blayney
• - ISBN 1-84528-063-4
• Other bibliography
• - The definitive business plan
• - The definitive guide to managing the numbers
  by Richard Stutely, FT.Prentice Hall