Things may not be going well, but all is not lost.  There could be a viable ongoing business in the works.  Here are a number of steps we can do to help get your business back on the ground:

• Get the real picture on the numbers.  Bad financials can lead smart people into making bad decisions.  The numbers can create a false sense of security.  We get the real picture together, so we know how deep the valley is.  We do this quickly, so we can move onto the important turnaround steps.

• Understand the cost structure.  What are the real costs of being in business?  What makes money?  What doesn't?  Often it could be very different than what a company has thought.  The products or services believed to be profitable might really be dragging the company down, while other products/services could be profitable but not getting attention.

• Listen.  This can be one of our most valuable resources.  People in the company could have some terrific ideas.

• Questions.  An important value is the questions we ask.  These questions help bring new perspectives and lead to changes in the business model or strategy.

• Communicate.  When a business starts heading south, it could start a trail of avoiding the phone calls or avoiding contact.  We get the lines of communication going again.  We may not have immediate answers, but at least we can buy time until a plan is put together.

• Assess the people.  Businesses do not operate themselves.  It takes people to make it work.  We look to see who the players are or who could be a stronger player in a different role.

• Evaluate the systems.  Dysfunctional systems can keep good people from doing their best.  Is there adequate information coming from the systems?  Is it coming on a timely basis?  Do the systems operate efficiently or are there bottlenecks?

• Determine the customer value.  Not all customers have equal value.  There could be some that are holding a business back.  We look closely at the acquisition and servicing costs, churn rates and other factors to determine the lifetime value of the customers. 

• Walk along the balance sheet.  We take a hard look at the balance sheet to see how well resources are being used.  Quite often there are dollars tied up in working capital or fixed assets that can be freed up.

• Buy time.  The turnaround situation can be an opportunity.  We come in and use our role as the new person as leverage to buy time.

• Cut the bleeding.  As we quickly get up to speed, we move towards attacking the costs of doing business.  Areas include operating costs, other overhead costs, financing costs, excess working capital/fixed assets and shifting the product/service mix.

• Evaluate the strategy.  It may not be just how a company operates.  It could also be the direction it is headed. 

• Develop a new plan.  We have created dozens of plans and can have a template that we customize to fit a business.  We use this to quickly create a new plan based on the other steps mentioned.

• Refinancing.  We have seen cases where the financing gets in the way of running the business, such as an acquisition that took on too much debt and had little chance of earning more than the debt service.  Based on the new plan, we determine what funding will be needed.  We then use the turnaround opportunity to get the financing restructured and give the business a better chance of becoming whole.

• Execute the plan.  We can stay on as interim management and/or help guide current/new people in executing the new plan.  We don't consider it done until the company is turned around.

Here are a few examples of turnaround work we have done:

• A pharmaceutical firm was not doing well after its first year of operating after the acquisition.  We were brought in by the investors as the CFO.  We found the loss was much higher than anticipated, 110% of sales.  People expected it to be out of business in weeks.  Instead, we kept the business flowing, buying time with vendors while collecting receivables.  We listened to employees and got people together on the same page.  We put together a short term plan and convinced the investors and banks that there was a good business here.  They agreed, with the investors putting in another round of equity, the bank agreeing to restructure their debt and new top management hired in certain areas.  Just four years later, the company earned 56% net income on sales and sales had grown over 650% from that first year.  The bank and investors said we played a major role in keeping the company together, buying time and persuading them to push ahead.  Without our efforts, they said they would have likely sold off the company at a major write-off.

• A health care services firm was in business for about 10 years and was finally getting close to profitability, until reimbursement rates got cut nearly 70%.  We came in at this later stage in an interim CFO role.  We improved the flow of working capital and helped cut costs, such as closing a number of service locations in remote states.  This reduced the cash burn significantly while the investors evaluated the next steps.  Since they had been in the investment so long and it would take a dramatic shift to new markets, they decided instead to sell the company.  The investors were glad we helped cut the down-stroke and buy time.  They wished they had brought us into the company much sooner.

• A consumer products firm was growing rapidly but not making money yet.  We looked at their operation and revamped the customer service, warehousing, purchasing and IT areas in to allow the company to grow with only modest increases in their non product costs.  We also suggested a change in their marketing strategy on how they priced their product.  In addition, we lined up new financing.  In the next year, the company grew over 400% and earned their first profits.  The operating improvements and the pricing change were instrumental behind the turnaround.

• A telecom client had made an aggressive launch of their service in a variety of regional markets.  They were not profitable and sensed that they were having trouble with bad debts.  We cleaned up and evaluated the data and found that the bad debts were running much higher than they thought, actually tracking at 55% of sales.  We worked with their revenue assurance people and developed the strategy and reporting which helped bring this to down over 90% to 5% of sales, around the industry average.  The company became very profitable, the stock price climbed over 30 times from the low point and management was able to sell the firm to a larger company.