Turnaround Management Firm Offers Five Key Points For Avoiding Financial Ruin
Revitalization Partner, a Turnaround Management firm based in Seattle, WA is in the business of teaching companies how to avoid disaster.
The international specialty turnaround management and business advisory firm, which is headquartered in Seattle, has clients in a range of industries-from technology to retail to manufacturing-who usually seek out help from the company’s partners with a common problem: Financial distress and stunted sales growth.
“Often corporate leaders and managers can’t see the forest for the trees,” said Bill Lawrence, Revitalization Partner principal. Because of this they have a difficult time recognizing warning signs that point to immediate or future trouble.”
When, finally, they are no longer able to ignore issues or rely on hope to see them through, bankruptcy may seem like the only solution. Having discussions with a turnaround management firm can often provide viable alternatives.
With the new bankruptcy laws that have taken effect, this option, instead of helping to solve some of their problems, will likely create new headaches and may lead to the end of the company.
“In short, corporate leaders must do everything in their power to avoid bankruptcy and this means being pro-active in recognizing potential problems and having plans in place to deal with issues should they arise.” Admitting that you need turnaround management is never easy, but the right turnaround management firm can often provide new insight into a company’s problems. According to Lawrence, there are some simple steps for turnaround management that can be taken by corporate leaders and managers to reduce the risk of the financial stresses that could lead to bankruptcy:
Step # 1 – Forecast cash flow. Having a definitive annual cash flow plan, that’s updated regularly, based on conditions, will provide a way to monitor activities and judge whether there are issues with cash flow that need to be addressed.
Step # 2 – Understand variances between projected revenue and cash flow. A significant variance can signal a problem. Find out why it exists. Don’t assume it’s a fluke or the problem will fix itself. It’s better to be pessimistic and pleasantly surprised than be faced with a financial disaster that could have been avoided.
Step # 3 – Keep your lenders and board of directors in the loop. Financial crunches happen. Lending institutions and board members will be more likely to help with additional funding or loan extensions if they’ve been kept informed. Discuss with your board and lenders the possibility of bringing in third party assistance. Often, by suggesting that you are talking with a turnaround management firm, you can gain time to resolve difficulties.
Step # 4 – Have a Plan B. Having in place a contingency plan that minimizes cash drains, accelerates revenue, and cut expenses will help to plan for the long-tern effects of any financial trouble that presents itself.
Step # 5 – Don’t be afraid to ask for help. While it can be a difficult to do, seeking outside help from a turnaround management firm when a company has encountered an extended period of missing forecasts is the most prudent thing to do. It can make the difference between big financial gains and bankruptcy.
A reputable turnaround management firm can help your company avoid financial ruin. Recognizing the need for turnaround management services is never easy, but securing capable turnaround management executives will likely save your company. We would be happy to meet with you and discuss your turnaround management needs.