Survive in Business

How to Turn Your Struggling Business Around

Steve Lloyd

• Publisher: Survive in Business
• Year: 2021
• ISBN:
  9780648971917
• Edition: 1
• Topic: Business
• Subtopic: Managerial Accounting
• Index: Business

Turning around a struggling business requires a different mindset and a different skill set than managing a business through good times.

When a business is heading towards failure, managers confront some of the most challenging decisions of their careers. Very few are trained to handle these situations. How you manage the complexities will define not only the future of your business but your own future.

Survive in Business: How to turn your struggling business around is a practical guide to:

• understanding the problems confronting your business
• evaluating the strategy options available to you
• planning and implementing the actions required to manage your business back to health.

It is essential reading for anyone trying to navigate a business through a turnaround.

Survive in Business Pty Ltd ACN 109 655 138
P.O. Box 496, Ballina. NSW. Australia 2478

www.surviveinbusiness.com

Published February 2021.

Copyright © Steve Lloyd 2021.

This book is copyright. Apart from fair dealing for the purposes of private study, research, criticism and review as permitted under the Copyright Act, no part of this book may be reproduced by any process without the express permission of the publisher.

ISBN
Paperback: 978-0-6489719-0-0
Epub: 978-0-6489719-1-7
Mobi: 978-0-6489719-2-4

Cover images © Rangizzz, George D. via Bigstock.com

Managing editor: Belinda Pollard
Copyeditor: Alix Kwan

DISCLAIMER

This book contains information and comments that reflect the opinions and ideas of its author. Those opinions and ideas are general in nature and do not take account of the individual circumstances of any specific individual or entity. Strategies outlined in this book may not be relevant to the circumstances of every reader or every entity and are not guaranteed or warranted to produce or result in any particular outcomes. Relevant laws and regulations vary from jurisdiction to jurisdiction and from time to time. Readers are advised to seek independent legal, financial or other professional advice that is current and tailored to their individual circumstances and geographic location. No warranty is made as to the accuracy and completeness of the information contained in this book. Without limiting the generality of this disclaimer, readers should note that no warranty or guarantee is given that the strategies outlined in this book will result in a successful turnaround of a business that is experiencing difficulties. Both the publisher and the author specifically disclaim any liability or responsibility for any loss, damage or risk incurred to any party as a direct or indirect consequence of the use of, application of or reliance upon any of the contents of this book.

Preface

Managing a business that is in decline or struggling is very different to managing a healthy business. It can be a very stressful experience and it is often difficult to know what to do or where to go for help. This book has been written specifically for the owners and managers of businesses that are going through tough times and experiencing financial troubles. It has been designed to provide practical, easy-to-follow guidance to help you identify and understand what is causing the problems with your business; to help you decide what steps you may be able to take to make it right; and to help you develop and implement a turnaround plan.

The content of this book is the distillation of more than 30 years’ experience in working with, and in, businesses experiencing difficulties. In that time, I have seen many businesses fail. I have learned that there is a significant degree of commonality between the causes of most business failures. Many of the business failures I have seen could have been avoided if decisive action had been taken earlier. Indeed, one of the most critical factors in a successful turnaround is early recognition, and acknowledgement that there is a problem that needs to be fixed.

Of course, the individual circumstances of every business and every business manager will be different, so it is important to adapt the ideas, strategies and processes outlined in this book to the individual circumstances and context of your business and yourself. Be prepared to supplement the guidance in this book with expert advice and support as required. By following a disciplined, decisive and timely approach to understanding and responding to the problems being faced by your business, you will maximise the prospects of a successful turnaround.

Steve Lloyd

Success is not final;
failure is not fatal:
it is the courage to continue
that counts.

Winston Churchill

Introduction

Businesses that are failing today are failing for the same reasons that caused businesses to fail in the past. We can learn from the experiences of those who have failed before. Equally, there is much to learn from those who have successfully restored their businesses to good health. Some of the most successful businessmen in history have failed in business before they ultimately succeeded. Walt Disney’s first animation company went broke. Henry Ford’s first two car companies failed. Bill Gates’ first business venture failed and a number of Richard Branson’s Virgin spin-offs have also failed. For these people, and many others, business failure has been a character-building experience from which they have learned – and from which they have rebounded.

But let’s be honest here. For the vast majority of business owners and managers whose businesses have failed, the experience has been a debilitating one. The most difficult position a businessperson can find themselves in is when their business is on the brink of collapse. It is a time when managers are faced with having to make some of the most difficult and unpalatable decisions of their lives. Yet, it is a management experience for which no training is provided. Very few managers have any experience in managing these situations.

A business in trouble can damage staff morale, disrupt business operations and destroy business relationships. It can be a period of great stress, often one where managers are confronted with uncertainty, conflict, harassment, and legal threats, while also having to deal with the myriad of complex issues that can emerge, both professional and personal. You may find yourself not only fighting to save your business, but also fighting to save your staff, your home, your family and your reputation. The very serious consequences of business failure make it an experience to be avoided.

By far the most important step in managing a business that is in trouble is to recognise and acknowledge the problem as early as possible, and be honest with yourself about the fact that there is a crisis to be managed. The biggest mistakes you can make when your business experiences problems are to deny that a problem exists or to assume that the situation will correct itself. You should not wait until your bank knocks on the door to take decisive action. Nor should you expect that your suppliers, customers and financiers will continue to support you if you don’t take action. You must be proactive in securing their support.

A business in trouble usually presents a range of issues that often require urgent attention. By the time a business gets to the point where it is clearly in serious trouble there are rarely any easy solutions. There are times when the problems confronting a business can seem insurmountable. Sometimes they are insurmountable – but not often. In most cases there are strategies and opportunities available that can provide solutions. There is usually no quick remedy. Turnarounds can take time and always require significant effort and total commitment.

It is important to manage the situation, rather than allowing the situation to manage you. It is easy to fall into the trap of fighting scrub fires while letting the house burn down. You must effectively manage your business if you wish to retain control of the business. That doesn’t mean there isn’t a place for professional advisers (including, in some circumstances, administrators appointed by you) in developing and working through your turnaround plans. In fact, I would strongly encourage you to take advice from experts both as a source of strategic advice and to give credibility to your turnaround plan. It simply means that you should make the key decisions, using these professionals to your advantage, as part of a considered strategy to successfully turn your business around.

Your approach to resolving the problems you are experiencing must be disciplined and structured. If not, the stresses of your situation will distract you, weaken your resolve, and potentially lead to a disastrous outcome. There will be significant emotional pressures working against you, stresses and emotions that you will probably not be familiar with and that you may not be well equipped to handle alone. These should not be ignored. It is important to share the burden and seek support through this difficult time.

Successfully turning around a business requires the application of both a different mindset and a different skill set to those that apply to running a business under normal circumstances. The manner in which you handle the difficulties that confront you, or will confront you, in these circumstances will define not only the future of your business but, in all likelihood, your own future for many years to come.

The message here is that you must act decisively and take the initiative to understand the problems, develop a plan and drive the resolution strategy relentlessly until you succeed. The fact that you are reading this book means you are astute enough to acknowledge that your business has, or may have, problems that might lead to failure if those problems are not addressed.

1. Why do businesses fail?

The managers of today are not inventing new ways to fail; they are making the same mistakes as their predecessors. Businesses are failing today for the same reasons that businesses failed 100 years ago.

Why do businesses fail? This is not a terribly difficult question to answer – the vast majority of businesses fail because they simply run out o...

Table of contents

• Preface