10 Top Tips for a Business Turnaround

If you're considering acquiring a zombie business, you're going to need a sturdy turnaround plan in place to bring the company back to life and create a secure and viable long-term future for the business.

There are various different methods of conducting a successful turnaround depending on the individual business concerned. But here are ten tips that business buyers across the board can take into account.

1 Develop a clear and concise business plan. A strong business plan can be invaluable in conducting a turnaround. Not only will it help guide your management and staff through the turnaround process, it will also help reassure and encourage creditors and investors. Remember, nobody is interested in bailing you out; a business plan will reassure investors that they stand to benefit from the turnaround themselves.

2 Take a fresh approach. Don't just cut staff and replace dodgy management. Take a look at the company as a whole and consider a revolutionary new business plan for the future.

3 Reduce creditor pressure. Once you've got a new business plan established, you will be better placed to talk to the company's creditors and come to a realistic agreement in order to reduce the pressure on the business. Don't promise the world if you can't deliver, but demonstrate the efforts that are being made to bring the company back to health; show them that they stand a better chance of getting a healthy return on their investment if they work with you.

4 Improve staff confidence. Making positive changes to a company's structure can create a cycle of improvement as employees feel increasingly confident about the direction of the business and renew their efforts to help take it there.

5 Tackle management problems. All too often a business flounders due to poor management. If you're thinking about reorganising staff as part of the turnaround, work from the top down and don't be afraid to remove inept or dishonest people just because of their status.

6 Take a careful look at cash flow. Look at the company's track record and fluctuations that have taken place in the past and then keep a close eye on how things change as you implement your turnaround plans.

7 Check out the competition. It's an arrogant and ignorant business owner that truly believes they have no competition. The marketplace is changing all the time, you need to keep an eye on what other people are doing but – crucially – you need to make sure you're the one coming up with the ideas to do it first.

8 Don't waste time with saviour investors. Some investors seem too good to be true and can appear to be a saviour for a company in need. All too often these 'saviours' are too good to be true and spending time in negotiations with them is wasting time that could be spent in building a solid turnaround plan.

9 Revamp the marketing plan. Take a closer look at the marketing plan for the business; there could be some key opportunities that haven’t been explored to their full potential in the past. Is the business investing in online marketing, for example? If so, take a look at its search engine performance. Consider bringing in some experts if you're not sure how to tackle this; companies like Newsvend have helped revitalise the online presence of many businesses.

10 Consider changing the debt structure. Sometimes you need to have a full clear out when it comes to debt. This can be difficult and chaotic, but removing the debt from the company and lowering personal guarantees to affordable losses can allow you to operate the business with the revenue and freedom required to make the turnaround a success.

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