How to turn around a struggling business

How to turn around a struggling business

Anyone buying a business out of administration will know that they face a challenge to make it profitable again. Although it may seem a daunting task, there is a process that all buyers must go through and it starts with establishing why the business failed in the first place.

What went wrong?




Once you have a clearer picture of what may have been causing problems in the business before you bought it, seeking the guidance of a professional turnaround specialist or management consultant, can help to provide the experience needed to deal with these complex issues. Again, bringing in someone from the outside after a takeover can help to ensure that the people that caused the problems are not tasked with solving them.

People


While identifying and protecting the best staff is important, so is making cuts to ensure poor performers no longer pull the business down. Whether this be through redundancies or management overhauls, the focus on reducing waste is essential. To be able to identify both the best and worst performing staff, performance needs to be measured by managers and they should feel confident in their role of communicating findings to the top.

Taking over a family company can come with unique challenges with regards to identifying who is valuable and who is holding a business back. The influence and expertise of an external consultant can help in this situation and will provide new owners with the ammunition and intelligence they need to do what is required in terms of trimming the excess from the staff of a family business.

At the same time, this approach will only work if you ensure that a clear culture of performance and success is spread across the company and that performance is rewarded and expectations are clear. Establishing clear core values and a working culture that is shared by everyone is the first step to creating the right attitude among all employees and minimising wastage and poor productivity.



The future




At this stage, establishing a clear vision for the future of the business is the next step. Senior management needs to put time aside to ensure they are thinking strategically about where the business, which was recently struggling to survive, will go in the coming months and years. Although the natural instinct for this process is to keep it behind closed doors until a plan has been agreed upon, this is rarely a good approach and can undo all the hard work you put in to make sure staff are onside.