Tag: turnaround management

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Brandon Blog Post

#VIDEO-WHY YOU NEED TO DISCUSS CORPORATE RESTRUCTURING AND TURNAROUND MANAGEMENT BEFORE IT IS TOO LATE#

Our prior corporate restructuring and turnaround blogs

We previously wrote a three-part series on corporate restructuring and turnaround management:

  1. CORPORATE RESTRUCTURING PART 1
  2. FINANCIAL VIABILITY ASSESSMENTS – CORPORATE RESTRUCTURING PART 2
  3. COMMERCIAL PROPOSAL – CORPORATE RESTRUCTURING PART 3

Are the steps in growing a successful company similar to corporate restructuring and turnaround management techniques?

When I heard the story told by Mike Miltimore, CEO and Founder of Riversong Guitars, it struck me that the steps he took to grow his successful guitar making business in this video was almost identical to the steps we would take as corporate restructuring and turnaround management professionals.

Any business can, in its life-cycle, face issues of under performance, and financial distress. The reasons can be simple, or complex, and range from: change in market conditions, availability of financial resources, bad debts suffered or inefficient management structure. In Riversong Guitar’s case, Mike understood what was needed to grow his business successfully so that he could expect these potential issues and put plans in place before facing trouble. I am extremely impressed with Mike’s understanding of his role in management and leadership.

Our role as a corporate restructuring and turnaround management practitioner

The corporate restructuring and turnaround management practitioner’s role, is to aid the business owners, with relevant stakeholders, to formulate, and carry out, a strategy to avoid a troubled company’s situation deteriorating, over time and to place it back on the road to financial health and ultimately, more growth.

It is a collaborative process, led by the corporate restructuring and turnaround management professional.

The 3 phases of a corporation in need of corporate restructuring and turnaround management

There are three clear phases in the corporation in need of corporate restructuring and turnaround management, which in hindsight become clear:

  1. Phase one – Invisibility Phase – The issues facing the business, are only visible from within the business.
  2. Phase two – Translucent Phase – The issues begin to become visible to the outside.
  3. Phase three – Total visibility – The issues are known, and are transparent to the outside business world.

Why reach out to a corporate restructuring and turnaround management professional?

Action and transformation methods need to be taken and implemented, before phase three occurs, because if a business is facing financial distress, more and more unwanted interventions from “creditors”, together with their professionals will take place. The ability to carry out corporate restructuring methods, and the scope to discuss problems without recourse to insolvency legislation, will reduce.

When business owners, or influential stakeholders introduce a corporate restructuring and turnaround management practitioner, this is their recognition for the need for change, and importantly that the business itself, does not have the skills or experience, to bring about required corrective change. Mike understood that he did not have the entire skill set to create the proper plans and infrastructure and carry out them, so he too reached out to professionals to help him. This is another way that Mike in growing his healthy company used the same techniques needed in a corporate restructuring and turnaround assignment.

The factors needed to grow a successful company are the same ones used by the corporate restructuring and turnaround management professional

Mike identified various factors, just like we do in corporate restructuring and turnaround management. Some of the issues that Mike faced in growing his healthy company, which we also face in corporate restructuring and turnaround management engagements are:

  1. organizational structure;
  2. corporate culture;
  3. leadership needs in an evolving corporation;
  4. project management; and
  5. ongoing coaching.

A classic turnaround involves:

  1. Understanding the depth of the problems being experienced – severity or otherwise, stabilizing the place, providing a route map to recovery – be that business transformation or corporate renewal.
  1. Implementation and monitoring, what is always underestimated in turnaround situations, is the need for business owners, to invest the required emotional capital involved, and a willingness to accept change.

You need to choose the correct corporate restructuring and turnaround management professional

For a successful turnaround to succeed, the correct turnaround professional needs to be chosen. “Best fit”, in terms of relevant experience, and a track record of success, is essential. In a nutshell, that is corporate restructuring and turnaround management. The exact restructuring methods used is determined by the nature of each situation. The turnaround methods used will also depend on whether the issues are only internal, or if there are external issues as well requiring more serious steps, such as corporate debt restructuring.

Follow Mike Miltimore’s lead. Recognize that you the skill set that has allowed your company to grow so far are not the same as those needed to fix it. Mike Miltimore knew that he needed outside help for the skills to grow his healthy company that he did not have in-house. The same is true in fixing financially sick companies.

So, if your company has too much debt and a history of losses, you need to fix it now so that your company can continue to prosper and allow the many families and stakeholders that relay on the company’s continued existence for their livelihoods. The most important thing is to get into place a proper corporate restructuring and turnaround management plan.

You should book a meeting with an experienced licensed insolvency trustee first. (The first consultation is free.) Ira Smith Trustee & Receiver Inc. brings a cumulative 50+ years of experience dealing with diverse issues, people and complex files and we deliver the highest quality of professional service.

Contact us today and Starting Over, Starting Now your company can be well on its way to overcoming its financial difficulties and continue to prosper.

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Brandon Blog Post

FINANCIAL VIABILITY ASSESSMENTS – CORPORATE RESTRUCTURING PART 2

financial viability assessments, bankruptcy alternatives, consumer proposals, corporate restructuring, division 1 proposal, proposal, restructuring, toronto bankruptcy, trustee, turnaround management, Vaughan, company bankruptcyLast week we discussed the process of corporate restructuring. This week we’ll be addressing the stakeholders and key players and roles in a corporate restructuring, as well as the issue of financial viability assessments.

Serious financial difficulties cause a great deal of distress; the very viability of your company is in question. You need professional help and you need it now. The cause of the financial difficulties must be identified, financial and viability assessments must be done, and an organization and restructuring plan must be implemented. There are stakeholders and key players that are involved, but who are they and what role do they play?

Who are the stakeholders: Depending on the size and structure of your company stakeholders may include corporate management, financial institutions, suppliers, shareholders, governments, regulatory bodies and employees.

Who are the key players and what are their roles: The key players in a corporate restructuring are the:

Company’s Accountant: The role of the accountant may include payroll, cash collections, disbursements, procurement and property accounting, tax preparation, financial planning, business consulting and payroll services.

Company’s Lawyer: The role of the lawyer may include drafting contracts, taxes, facilitating mergers, and handling human resources issues.

Trustee: The trustee is a restructuring professional. We work with all of the stakeholders and key players, creating realistic strategies and solutions for your company. The problems that caused and contributed to the financial distress must be identified and addressed after which a plan must be put into place to restructure the company and affect the turnaround. We perform a financial viability assessment in order to begin the planning process of a corporate restructuring.

Contact Ira Smith Trustee & Receiver Inc. With our expertise and skills in restructuring and turnaround management we will work with you to find and implement the right financial and business strategies that address your particular issues. We will assist you to avoid your company bankruptcy. Starting Over, Starting Now we can begin to rehabilitate your financially troubled company. Watch for our next blog – Corporate Restructuring Part 3 – when we’ll be addressing the Division 1 Proposal.

Call a Trustee Now!