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Turnaround – How to spot the warning signs

We all need a personal heath check every now and then, and businesses are no different. Here are some of the warning signs for a business suffering a degree of distress.

Step 1 – Early warning signs

 

   You're always short of cash

   Your bank are asking for more information
      or an audit

   You have a plan, but it keeps changing

   You are constantly using all of your
      bank facility and have no free headroom

Step 2 – Things are getting worse

 

   Continuing losses for more than
      3 consecutive months

   You can't pay your monthly PAYE/NI payment

   There has been a sharp increase in your creditors

   Raw material supplies are drying up

   Customer service levels are dropping

Step 3 – Final weeks

 

   Your suppliers are starting legal action
      and you may have been presented with a CCJ

   You haven't met your rent payment and
      your landlord is threatening to lock you out

   Inbound supplies are sporadic and your
      staff can sometimes have nothing to do

   Your bank are turning hostile

   Customer service levels are dropping

If any of the above sound familiar, or if two or more were true for any step, then that's the stage that your business distress has developed into. Don't leave it too late, call us for a free chat and initial diagnostic review.

Stephen Moon, Director, Venturn Ltd

Case Studies

Quote

Construction Industry.

Access to Finance

January 2010

Found new investor for acquisition out of Administration.

Quote

Software Developer.

Cash flow management & supplier negotiations.

March 2010

Avoided insolvency by negotiating informal arrangements with suppliers in order to buy time for growth in sales.

Quote

Rail Component Manufacturer.

Division Profit Improvement

March 2009

Profit improvement plan of an underperforming acquisition. Returned to profitability within 3 months. Now seeking acquisition targets.

Quote

Automotive Tier 2.

Operational Improvement Programme

May 2009

Headed up restructuring of company's operations after the downturn in the market. Returned to cash neutral in 3 months. Profitable within 6 months.