Turnaround Analysis

What Is a Business Turnaround Analysis?

Each business has its own unique set of problems as each business has its own distinctive ‘recipe’ for the way it runs and operates. It is dangerous to believe that what worked for a similar business will work for yours. 

To determine which turnaround Type and Strategy will be suited for your situation. You may need to do a business turnaround analysis that includes an insolvency and viability tests. If you find that any of these tests are positive for your current business situation, it is vital that you take action as soon as possible to address the insolvent position by speaking to a professional.


What Is a Business Turnaround Analysis?

Business Turnaround analysis is the process used to identify and discover areas of opportunity and problems in the business, either strategic, operational or financial, that represents a weakness or vulnerability that, if not addressed soon, will lead to business failure.

The analysis process is the most important part of selecting the best business turnaround strategy, and deserves a significant amount of time and attention to ensure that the correct options are selected.

With Little Time, No Margin For Error... And Few Second Chances -  the outcome of the business turnaround analysis will you be able to choose between the two main types of business turnaround strategies:

  • The Strategic Business Turnaround (profit & cash flow improvement)
  • The Business Rescue (financial restructuring and debt reduction)

Remember, if the business is insolvent you must act to maximize the creditor’s interests otherwise you may personally be held accountable. However, don’t panic, there are many options you can follow, but time plays a vital role.

The Difference between Business Turnaround vs Business Rescue: 

  • The process is owner-led
  • The Objective is to save the business by returning it back to profitable.
  • It’s an Informal out-of-court debt restructuring and negotiation process that’s outside the legal framework.

With a Business Rescue

  • The process is creditor-led, where creditors respond to breach of payment agreements
  • The Objective is financial restructuring and debt reduction under The Companies Act.
  • Followed by formal legislated proceedings

After the turnaround analysis is completed, a turnaround strategy can be formulated. A turnaround strategy is an effective and proven plan that consist of a selected series of actions steps with the objective to accomplish the sustainable financial recovery of the underperforming business to match or exceed its performance prior to the downturn, within the shortest possible time.

When Do I Need To Do a Business Turnaround Analysis?

It will be a wise business decision to do a business turnaround analysis as soon as your business experience poor financial performance. Some signs that your business may be under pressure, at risk or even insolvent may include:  

  • Declining market and customers?
  • Declining revenue/sales?
  • Ever-increasing cost and overheads?
  • Your overdraft is always at the limit.
  • Your bank always wants more information.
  • Your bank has returned debit orders.
  • Your bank has refused to increase facilities or wants to reduced facilities.
  • Your bank asks for increased security.
  • Your bank wants personal guarantees or wants to increase personal guarantees.
  • Your bank wants security against your own property.
  • You already have consolidated you debt.
  • Cash flow always tight so paying creditors is difficult.
  • Low production - can’t get stock because you can’t pay creditors on time.
  • Don’t hit targets – can’t get stock /services on time.
  • You cannot get new credit.
  • You cannot extend existing credit.
  • The business’s creditor days are growing
  • You have lots of failed deals with creditors.
  • You have lots of red warning letters.
  • You have had lots of legal actions.
  • You are using lots of suppliers and spreading credit around.
  • You are always fighting creditor fires.
  • You have to handle creditor’s calls every day.
  • You have had visits by Sheriffs or bailiffs.

If you get an uncomfortable feeling that it sounds familiar – speak to a specialist in this field.

Business Turnaround Analysis may include:

Business Turnaround Analysis may include most or all of the following analysis depending on the business unique situation. (For detailed descriptions)

  • Business Valuation Analysis
  • Revenue Growth Potential Analysis
  • Sustainable Growth analysis
  • SWOT analysis
  • Operations analysis
  • Limitation and Constraint analysis
  • Business Impact analysis
  • Value Driver’s analysis
  • Financial Statement analysis
  • Opportunity Cost analysis
  • Financial Ratio Analysis
  • Profitability analysis
  • Customer Profitability analysis
  • Product Profitability analysis
  • Employee Profitability analysis
  • Operating Expense & Saving analysis
  • Product Profitability analysis
  • Cash flow analysis
  • Operation & Working Capital analysis
  • Business Vulnerability analysis
  • Variance analysis
  • Operating Leverage analysis

Remember:  Earlier intervention can lead to a much better outcome for the business and provides your business with the best options, so if you have any doubts, please contact us for a free strategy sessions today. "free crisis strategy sessions"  During "The Strategy Call", there's no sales pitch or attempt to sell you anything, ever. This call is about helping you, to talk about your unique business, and to brainstorming ideas and strategies to help you increase your sales and profit immediately. The First Solution Is Always Free, Just To Demonstrate That I Can Help You, By Actually Helping You For Free

If you would like the best immediate solution for your business you can go to The 40-Day Business Turnaround Program will take your business from a "Breakdown & chaos to a Breakthrough & control" in 40 days or less. Stop the urgent pressing cash flow problems that's forcing you into making bad decisions, and forcing you into digging yourself into a deeper financial hole. Let us help you transform your cash-demanding profit-seeking business back in to a highly profitable cash-flow rich business

More Turnaround Analysis Resources

Thanks for reading, I hope you found it valuable and helpful.

PS: If you would like me to personally help you find the best immediate solution for your business. You can contact us for a free crisis strategy sessions during this "lock-down" … Just go to "free crisis strategy sessions"

About the Author Hans

Hans had 40 of his own businesses over the last 30 years and is famous for creating fast-growing businesses” He is an author, speaker, coach, and consultant and a specialist in business optimization and turnaround, helping smaller business owners eliminate business limitations, threats, and growth challenges in achieving their sales, profit, cash flow, and income goals with sniper precision.

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