We assist and lead dramatic financial and organizational changes to a business; refinancing, divestments, debt restructuring, cash management, strategic transformations / repositioning, costs reduction, downsizing workforce.
The motive to restructure a business
Due to the rapid evolution of the economy, business competition has become so complex that companies and organizations are facing many challenges. These challenges include constantly anticipating and adapting to a fast business environment. At the same time, simultaneously, there is the need of improving business performance and generating better revenue and develop new product and market opportunities.
Businesses need to make significant - gradually planned or abruptly forced - changes to remain competitive and relevant. After all, every company needs to develop and adapt itself to changing circumstances.
Some companies take excellent strides in their next phase of development, performance, and profitability. But other companies may experience a moderate or fast decline, and with a decrease of stability and some possible setbacks, they may even have to struggle to stay in business.
The main reason for restructuring a business is a necessity, not a desire for change. A restructuring always occurs because the company is not optimal performing, not because the company wants to follow the trend or move in a different direction. A restructuring process is often a drastic and painful, and complicated process, so it is so important to take the right approach from the beginning.
Visible issues leading to corporate restructuring
The causes of a business restructuring are many and varied. There are many common causes. Perhaps the most common cause of a business restructuring is simply that the owner(s) of the company become disillusioned with the company, with themselves as owners of the company or with the prospects for the company.
When this occurs: business owners need to take immediate action to stop the bleeding. Another critical action when this situation arises is to get new, objective, outside, intelligent advice. This is not the time for emotions, wait-and-see hunches, or intuition. When a company is in distress, it needs cold, hard analysis.
The problems are most evident, but the underlying causes of the issues often remain unknown and are only tackled to a limited extent. Ultimately, it is about all business continuity and profitability, and if there is no realistic assessment, it is undesirable to initiate a restructuring.
Although a restructuring mainly concerns the underlying causes of the business problems, an overview is listed below of the most common troublesome business situations. In practice, we often notice it is not a single problem but a coherence of different issues.
Severe business problems which require immediate intervention and usually require a thorough restructuring are;
a. primary and extremely urgent problems
-decreasing or low
profitability or even loss
-serious threat to business continuity
-lack of liquid funds
-change of ownership structure of the company
-partnerships, collaboration and changes in the supply chain
-revision of business strategy
b. internal related issues
- too high costs
-moderate and ineffective management
-significant turnover of staff
-inefficient processes -lack of knowledge and skills
c. market-related issues
-reduced or changed
-declining turnover and market share
d. external changes
policy or laws and regulations
-new technological developments