Discover 10 steps to a successful business change

In all business change situations, there are certain steps that are commonly taken to change the fortunes of a bankrupt business.

The owner of a business that has not been very successful may need the help of a professional expert to stop the demise of the business and create value for the organization. The task of managing the required change may be beyond the skill set of the owner or there may be too great an emotional feeling that can prevent the owner from making difficult ‘business savings decisions’.

Is there a standard process to be adopted in business changes?

All business situations are different and therefore deserve different approaches and emphasis on different aspects of the job. However, there are a few steps that are generally considered in many successful business change situations and ten of the most relevant are detailed below:

1. Review and evaluate the current situation

In a business course change, it is important to fully understand the starting position. It will be important to collect objective and anecdotal data to review the situation and determine the causes, as well as to understand the immediate effects, of the problems that affect the business.

Management accounts, the sales order book, financial arrangements, internal controls, customer service levels, quality, and leadership skills are typical areas that will require assessment and an assumed vision.

2. Develop business plans and strategy

After evaluating what it takes to change for the business turnaround to be successful, it will be necessary to develop solid plans and strategies that will achieve success.

Without a doubt, it will be necessary to thoroughly document the actions to be taken, the timing, the financial impact of those actions and obtain the “buy-in” of the business owner.

The benefits of writing the business plan include that of a benchmark against which actual results can be measured and an indication to third parties that the proposed business change plan has been carefully evaluated and is a viable proposition that should be supported. This will be an important and relevant form of communication for investors, staff and others who may need to know what the future plans of the company are.

3. Communicate with key employees

For the business turnaround to gain momentum, you will need to meet with key managers and personnel. Current business issues should be explained and the consequences of failing to take corrective action should be disclosed. A summary of the proposed actions to be taken should also be communicated and a request for comments should be requested.

While it may not be possible to answer detailed questions, it will be important to raise the concerns of this group and address them in the most positive way possible.

Members of this group will be critical to the success of business change. They will be in charge of taking the planned actions and delivering the results; therefore, it will be imperative that the group act as a team and be committed to future plans.

4. Communicate with other employees

It will be necessary at the first opportunity to meet with all employees or their union representatives, particularly if job losses are planned.

A prolonged period of uncertainty, fueled by hearsay and backlash, will not be beneficial to the company, and while bad news may not be easy to convey, it is desirable to communicate it in a timely and sensitive manner.

The meeting will also be the opportunity to provide insight into future business plans and the role that the remaining employees will play.

5. Meet the bank

The bank and other parties with a financial investment in the business should be informed about the business restructuring plans. If possible, meetings should be arranged to discuss plans and seek assurance that it will continue, and perhaps more support for the business.

6. Get to know the customers

Depending on the severity of the situation within the company, it may be necessary to reassure key clients about business restructuring plans and the benefits that will accrue to them.

This action should be considered mandatory if the why The disappearance of the business has been poor customer service, a poor quality product or any other matter that does not meet the expected / agreed customer satisfaction levels.

Begging for a second, third, or even fourth chance to ‘get it right’ can be embarrassing, but remember: without customers, there is no business. Learn from past mistakes, don’t promise the undeliverable, and ensure that internal systems, processes, and communication channels are raised to a standard that allows business to run smoothly in a timely and timely manner. efficient.

7. Meet the providers

If the company has not been able to settle accounts payable on time, even the buzz of business restructuring activity taking place can cause suppliers to impose draconian payment terms that can jeopardize the business restructuring recovery plan.

If support for the restructuring plan has been obtained from financial institutions and investors, it will be advisable to actively seek meetings with providers to outline plans and seek their continued support.

Restoring trust will be critical. Negotiating new payment terms or even the continuation of existing ones from a weak position will be difficult; however, all promises made must be kept or, if default is imminent, inform the provider in advance of how the debt will be canceled.

8. Save cash

Review and improve if necessary credit management procedures. If possible, negotiate extended payment terms to suppliers; Thoroughly examine all unused assets of the business and liquidate if necessary.

Options that may be available include the sale of unused buildings, the rental of spare office space, the sale of unused office and plant equipment, the disposal of excess or redundant inventory, factor sales debt, and , if unavoidable, make excess employees superfluous.

Furthermore, steps should also be taken to eliminate all unnecessary overhead.

9. Implement new / updated systems and procedures

A thorough review of existing systems and procedures will be required to meet the objectives of the business restructuring plan. Implement the change if necessary; It will be noteworthy to remember that continuing the old practices will almost certainly result in the same old results.

Profitable and positive change may be required and this should be communicated to employees so they understand their roles in the new business environment.

10. Monitor, measure and act

Throughout the business change process, results should be measured regularly against the plan and corrective actions should be taken if necessary. Determine key performance indicators (KPIs) that provide a snapshot of business performance and are available on a daily, weekly, or monthly basis.

KPIs should include financial and non-financial measures and reflect the important aspects of the business that will determine success or failure.

Finally, it will be desirable to proactively communicate the progress of change to all stakeholders: employees, customers, suppliers and financial institutions.

As long as sound business management principles are employed, results are measured, and positive trends are reported, control of the business must be restored. However, corporate restructuring work should not be viewed as exceptional. Lessons learned during the restructuring process should be embraced to avoid a repeat of previous mistakes.