On an average more than 300 businesses fail every week in UK with various factors. Employees lose their livelihood, customers lose access to services, providers, creditors and share holders lose money.
The COVID-19 pandemic has created unprecedented and complex challenges for organizations and in the short to medium term we are going to see even highly competent management teams stressed and challenged. According to a study there are some key steps in achieving an effective turnaround and the specific challenges for SMEs.
Although for SMEs a normal turnaround is somewhere in between 3 to 18 months and a long period of 2 to 3 years is required. The primary period is about stabilization, understanding what went wrong and resetting the direction. The next 12 months is about building on change and preparing for growth.
With a turnaround approach, this exceptional situation needn’t prove the end of the road for small companies with a viable offering. Core turnaround process gives a blueprint for recovery under pressure. Here we share some key measures and ways that you can take to save your small business.
Top 7 Tips To Rejuvenate Your Small Business
Stepping In Early
The first measure in turnaround is significant: stepping in early to address both immediate and underlying issues to stabilise and rejuvenate the business. The sooner a business engages in a turnaround process when they are on the distress curve, the more the prospects of success and the better the result in terms of jobs secured and value saved.
Assess The Situation And Consistently Evaluate
It is crucial to assess the state of the business and understand its position. The key financial and operational issues must be distinguished and prioritized and a short term plan should be created to help address them, taking a look at various situations. Focusing on the key KPIs: sales, orders, cash, debts and profit will enable you to understand the situation, to design, to manage and to offer confidence to stake holders. Understand your position and continue doing so.
Build The Trust Of Stakeholders
Stakeholder certainty can normally get influenced at times of stress but is never more significant. It’s fundamental is to get everybody on board with the plan: investors, moneylenders, shareholders, providers, representatives and customers. Build trust of stake holders by managing with their expectations early and afterward following up consistently. It’s also essential to understand your stakeholder’s conditions: moneylenders’ expectations and requirements, the concerns and position of workers, and the situation of your suppliers, especially if you have a complex or particular supply chain.
It is essential that the initiative grasps the issues and motivation from the top to the bottom of the business. From commitment in hygiene measures to steps you may need to take to temporarily redesign or scale back operations, your partners need to know how they can get involved and how they will be affected.
Stabilize The Finances
Get money streaming into the business, pay off debts, extend credit, reduce stock, reduced expenses. Running out of cash is often the trigger point for an emergency. Fixing the funds, for instance through robust cash flow forecasting and the management, will give the time to manage more extensive issues but this won’t in itself turn the business around.
Restructure accounts, cost base and cost controls. Refresh leadership skills. Develop your key vision and turnaround plan. That means figuring out how to improve, less expensive or uniquely in contrast to competitors. It means having a dream that can be transformed into a long term recovery plan and a system for growth.
Articulate A Strategy For Growth
Develop a sustainable business strategy for future development. If you want to save your small business, a long term strategy building on the operational and financial turnaround gains and based on the core value of the business is essential.
Turnaround should be a situational intervention: when a standardized situation has been achieved the time has come to move on.