When your business is facing a sustained period of financial trouble it is difficult to know what move to make next. You’ve probably tried a number of options and implemented different tactics that you thought might work. But when problems persist and your solutions don’t solve the problem, you must be open to new approaches. The issue may be that you don’t see the whole picture or understand the options available.
It takes an expert to help – known knowns to an expert are unknown knowns to a newbie to business turnaround.
What do I do if my business might be insolvent?
‘How did you go bankrupt? Two ways. Gradually, then suddenly.’ (Ernest Hemingway, The Sun Also Rises)
What’s the point of this quote? The point is that if you miss the forward indicators of business insolvency there will be a tipping point where options become very limited. The value of a turnaround expert is early identification of root causes of business insolvency.
Get people on board that can conduct an independent and accurate assessment of your business. A good independent analysis will assess the viability of your business using a number of financial tools. It will also provide valuable information needed to move forward and solve problems within your business.
You should also seek out advisers from other fields. You may have a wealth of experience and know-how in your chosen field, but don’t discount what individuals from other sectors can bring to the table. Find creative specialists and advisers from other industries with different experiences. Do not underestimate the value in having problem solvers around you that think differently than you. Go beyond your usual circle and invite people that will challenge your assumptions and question everything.
Even if your problems aren’t solved immediately, don’t give up. If working with external advisers doesn’t work out on your first try don’t be afraid to try again. Be open to trying different approaches until you find a solution that fits your business and delivers results.
Who should I call?
Finding the right advisers can be difficult. There are thousands of consultants that won’t be the right fit for your business. Conducting thorough research will be the first step in the right direction. Here are some of our tips to find the best person for the job:
- Look for people with real world experience. The best advice will come from those with significant experience and quantifiable success in their respective field. Business can be a dangerous and pothole-ridden road and you want an adviser who has driven various routes before and knows which side streets to take and which intersections to avoid.
- Look for an adviser who has accreditations and memberships with professional bodies. These individuals are more likely to be accountable and professional.
- Investigate the history of any potential adviser. It is important to investigate further than the current service offering and take a look at the history of your potential adviser so you know who you will be dealing with.
- Always check pricing. It is important to understand how any adviser may charge you, especially when money is tight. We recommend looking for fixed fees over hourly rates, as this is more transparent and will allow you to budget more accurately. Remember that if it is not immediately apparent how the person is pricing their services or it is not transparent then this should be questioned.
- You need to engage an adviser who operates legally and ethically. Never risk engaging an adviser with questionable ethics, it will never be worth it.
- Get to know their strategies. It is important to be aware of how things will move forward and that you are comfortable with what you will be paying for. Shop around and see which adviser’s strategy aligns best with your goals.
- Avoid conflicts of interest. An adviser should not take on a client where a conflict exists as it could have professional repercussions and interfere with their ability to act unencumbered on your behalf.
- An adviser with a heavy workload will likely not benefit you. Advisers must have adequate time and resources to allocate to your business. Make sure that whoever you are engaging has the capacity to take on your matter and isn’t overwhelmed with a range of other obligations.
What happens if I don’t ask for help?
Not asking for help can be very dangerous for your business. Sustained periods of financial deterioration often correlate with the poor decision making of the company director. If you are the one creating problems, or even just contributing to problems in any way, shape or form, you are probably not the best person to get your company out of strife. If no new perspectives are taken on board, an up-hill battle lies ahead.
The key takeaway
Seek out help!
As Domenic Aversa says in his 2019 book, Corporate Undertaker:
‘Seeking help doesn’t mean you’re weak and you’ve failed. It means you’re smart and proactive. There is tremendous power in a group focused on overcoming a problem.’