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Venturn Does Your Business Keep You Awake At Night?

Who can business owners turn to when financial problems escalate and threaten the viability of their operation?

Here, a small business owner who is experiencing a bad period of trading explores some options with a Turnaround Practitioner.

  • How can I tell if my business is in distress - what are the warning signals?

    The key signs are:

    a sharp increase in the time your business takes to pay suppliers, which can lead to accounts being placed on stop - when this happens, it can cause further distress as things start to spiral out of control;

    falling into arrears with HMRC, whether it be monthly PAYE, quarterly VAT, or annual corporation tax.

    Either of these should prompt you to get professional help from a Turnaround Practitioner – a professional who specialises in identifying the issues within underperforming businesses, and advising and implementing recovery strategies to enable them to be profitable again. A Turnaround Practitioner combines considerable professional experience and skills with a fresh eye and total objectivity, which can enable them to see the root causes of problems that the owner or management may have missed.

  • Why should I avoid a 'quick fix'?
    Quick fixes simply rely upon financial cost savings or re-engineering the company's finances. They tend to only deliver short-term value. You really need to address the underlying root cause of the problem if you are to create sustainable results. There could be a number of reasons – for example - a poor business structure, a bad marketing plan, a pay structure that promotes the wrong behaviour or too much wasted time or cost when delivering your products & services. Whatever the root cause, this is where you need to direct your efforts. Only real changes can lead to sustainable profits.
  • How can I ensure I turn around my business successfully?
    Planning and execution are critical. You may well have to draw up and run 2 or 3 different plans and you need to understand each well. You need to know your numbers and understand how much cash you might need, and how quickly you can return to generating cash. There's no point in perfectly executing a bad plan. If you get the plan wrong, you'll probably run out of time.
  • What is the best way for me to implement the turnaround plan?
    One of best pieces of advice is to communicate with all of your stakeholders. This will include employees, suppliers, customers and your bank. You may be reluctant to let them know what’s going on, but remember, everyone wants you to succeed. If things get really bad, you're also guaranteed to see the best in some people, but the worst in others. Make sure that you know who is who and deal with each one appropriately.
  • Do you have any tips for ensuring my business is sustainable?

    Take a really good look at how you operate - increase your sales and reduce lead-times - this is the real secret of success. If you’re not already trying to reduce your lead-times, then now is the time. It speeds up orders and makes you more flexible, makes problems easier to see, (they always existed, you just couldn’t see them), improves service levels, increases profits and puts cash in the bank.

    If your business is running into trouble, it’s best to seek help as soon as you recognise the need.

    Sadly, often business owners will only ask for the advice of a Turnaround Practitioner when it is too late for the problems to be addressed.

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