When hiring a turnaround consultant, there are certain features you should require. First and foremost, this should be a person you feel comfortable with. You should like this person in a way that you can only assess personally. Some people are likeable and others not. I can’t explain exactly how to determine this, but if you feel comfortable with them, that is usually a very good indicator.

As a business leader and entrepreneur, I think you know what I mean. This feature may also have something to do with leadership qualities or charisma or trust, but it is probably the most important characteristic because the last thing you want to do is bring in someone that your employees don’t like and have this person irritate the situation worse than it needs to be.

Advanced degrees are nice, but they are hardly the most important credential. Someone who has an MBA or a CPA will certainly be a benefit, but if they have no experience, those degrees will not add up to much. The turnaround professional you select should therefore have a fair amount of experience with turnarounds (successful ones), and if possible with turnarounds in your business sector.

Ideally, this person should be a self-started and a leader. They should be able to deliver an honest opinion even if it is one you may not want to hear. C-level experience is necessary, and a good understanding of accounting issues would be a huge benefit. This person must also confirm to you that they believe they can turn your company around if you hire them. They should also have a solid grounding in negotiations, and if possible in debt negotiation. Debt negotiation and reduction will play a vital role in a successful turnaround.

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If your business is in danger of failing and you chose to perform a turnaround, you can either bring in outside assistance or take the do-it-yourself approach. In any case you will need the help of an accountant and an attorney. If you get outside help, it may come in the form of a consultant or a coach. The consultant will be more “hands-on” and will likely spend some time during the turnaround visiting your company location.

This will give them the necessary insight to assist with all aspect of the turnaround process. You can have them stay for only a week, or you can have them stay for the duration of the turnaround process. It all depends on your budget and how much money is at stake if you lose your business.

If you chose to go with a coach, this person will likely assist with your turnaround efforts from a remote location and may never visit your company location in person. They will likely communicate using current technology. They will provide a sounding board, but you will need to do most of the difficult work.

Whatever the case may be, after you have your turnaround team in place, you will first identify the non-core business functions, those that are not profitable or necessary to the core business functions and that are dragging the business down.

You will also identify those core functions that are having a positive effect on the business. These will be your primary revenue streams.

Identify profitable products & services
Identify core business processes
Identify non-core business processes
Identify profitable business sectors
Identify non-profitable business sectors

The steps you take to accomplish this will depend upon the type of business you run. You may have a service-oriented business or you may have a product-oriented business (manufacturing and distribution). In any case the first few steps will be to look closely at your revenue streams and identify those that have a positive effect on your business and those that have a negative effect.
André Larabie

www.andrelarabie.com

If your company is facing bankruptcy or you are in the process of a business turnaround, it is likely that your revenue streams are not as stable as they should be. Here are the 3 steps you need to take to make your company more revenue-stable:

Step 1
Identify your current products and services. You need to list our each and every product and service that you use to derive revenue for your company.

Step 2
Identify additional products and services with a high level of revenue stability. Use the concept of saleability as a gauge for how much revenue stability a proposed new product or service has. Revenue stability refers to the amount of predictability and consistency in the revenue source. For example, revenue derived from annual contracts is much more stable than revenue derived from emergency calls.

Step 3
Identify a Revenue-stability plan to include these products in your product line. This plan will include advertising marketing campaigns, along with a timeline. Each product should be assessed and gauged for the amount of revenue stability it will bring. The overall goal is to make your revenue streams more stable and predictable.

The list should be prioritized and those items with the highest stability should have top priority for implementation.

Hopefully, the discussion in this article has increased your awareness of revenue stability and the important role it plays in the durability and marketability of your company. If you have endured a recent turnaround, it is likely that prior to the turnaround, your product line was not very revenue-stable.

Now you can take the necessary actions to increase the revenue-stability of your products and services.
André Larabie

www.andrelarabie.com

The primary approach during this restructuring period will be to develop a plan that will identify the core business revenue streams that you can focus on to get your company through this difficult period.

Your plan will pare back all unnecessary operations and leave only the core positive cash flow functions of the business. Then you will build back up to a stable position.

Create a Core turnaround Team
Although you probably have the skills to implement a successful turnaround yourself, it is a good idea to seek some amount of help. This help can include any of the following professionals:

- Turnaround expert
- Certified Public Accountant
- Attorney

Although you may have accounting or legal expertise within your organization, I recommend that you consider hiring experts who are external to your organization.

This will eliminate any conflicts your own personnel may have with the turnaround process. For example, your accounting department may deserve some of the blame for your current predicament, and they may be motivated to cover this up. This would clearly be an internal conflict.

You can include your controller or your C-level accounting manager on your team, but it is best that the external expertise is available and you will not be solely reliant on someone who may be partially responsible for the problems causing the need for the turnaround in the first place.

The other reason you should seriously consider outside help is because it is likely that you do not have a certified accountant working within your organization, or one with experience working on a company turnaround, or an attorney familiar with the unique issues associated with the turnaround process.

I am not suggesting that you hire all three individuals. You may be able to accomplish your goals with an attorney who is also a CPA and has experience with turnarounds. Whatever works for your particular situation.
André Larabie

www.andrelarabie.com

Another thing to consider during a business failure or business turnaround situation is that you may need to protect yourself. This is because sometimes you can ultimately be blamed with things that you are not responsible for. For example, if you are a main proponent in a medium-sized corporation, and things go bad, you may think it is a good option for you to resign your position and move on to greener pastures.

First of all, this would only be the case if the corporate structure was such that there were several other proponents who owned equal or larger shares, or if together they controlled a larger portion of the company than you did. The company could have evolved this way. If the environment gets hostile, and you decide to resign, you may discover later that everyone at the failing company blamed you for all the failure and you have to answer for it legally.

This can turn into a very bad situation, so it sometimes may be necessary to remain in your position, even if it seems like it is a good time to leave. You may have to stay in your role so that you can document events yourself and protect your interests if/when the situation deteriorates. If you vacate the position for greener pastures, you may find out later that once you were gone, all the fingers pointed at you when it came to the blame game, which everyone plays, and especially so when it comes to failing companies.

Keep this in mind if your business is entering a troubled period of operation.
André Larabie

www.andrelarabie.com

For many years, corporations have been the most popular way to shield personal assets, but limited liability companies (LLCs) should also be considered. LLCs offer just what they say: limited liability for the owner(s), i.e. personal asset protection. Besides protection similar to a corporate shield, LLCs offer benefits similar to a partnership or sole proprietorship.

As with a partnership, pass-through income taxation is possible with an LLC. This means that the income of the LLC passes through to the owners and this avoids the issues of being taxed twice, as with a traditional corporation. In this way, an LLC is similar to an S-Corp (discussed below) but less formal and with less paperwork and government maintenance requirements, and with fewer overhead expenses.

Since the income flows through the LLC to the owner(s) each year, the amount of income allocated to each owner is reported to the government. You do get the liability shield and since the overhead of a corporation is much more than with an LLC, these are easier to operate and maintain.

With both a corporation and an LLC you get protection from creditors in the even of a business failure, but you do not have the excessive paperwork and licensing requirements that usually go along with a corporation (this is state dependent). The LLC is easy to set up and simple and cheap to maintain.

You are not forced to hold annual meetings or have shareholders, or maintain corporate records to the degree that you are with a corporate entity. With an LLC, you can usually file with your state and be up and running in a short amount of time. No corporate seals and heavy binders filled with reams of legal sounding verbiage and corporate jargon.
André Larabie

www.andrelarabie.com

If your business is in danger of failing, you should expend some extra time and effort on the home front. Possibly you are in a business turnaround situation and trying to save the company. This will avoid bad feeling and problems in the future. Here are some promises you should make to yourself and to your family as you enter into a turnaround situation:

- Have a weekly Family Day
- Set a time limit on the turnaround
- Set a course of action should the turnaround fail

Identify a family day, or 1 day per week, usually a Saturday or Sunday, where the family spends at least the afternoon or evening together. You can go on a drive, a picnic, bowling, or participate in some other group event.

What I have found works well is to let each family member decide where the family will spend the day and rotate this decision-power between members. At the end of the month make sure to ask which of you had the best activity and get a sort of competition going.

What tends to happen is the family day turns into a sort of game and everyone is looking forward to their day of “control.” During high stress periods, this small amount of control (and hopefully a large amount of fun) may make the difference.

At a minimum, a family day will help to lower stress and bring the family members closer together physically and emotionally. Since you are experiencing a heightened level of stress at work, this will help alleviate that stress and you will avoid letting inadvertently it flow over into your home life.
André Larabie

www.andrelarabie.com

If you are planning to recover a distressed business, you need to develop a Turnaround Plan. This plan will contain a Marketing Plan that should be a standalone component and distinct from the overall Turnaround Plan. A critical component of the Marketing Plan is the Distribution Channel section.

The Distribution Channel section of the Marketing Plan should describe the methods used to distribute products and services in the current company and what, if any, changes will occur in this channel after the business turnaround occurs. It should emphasize any key aspects of the new distribution channel that will improve the chances for success of the overall Turnaround Plan.

To illustrate what to included in the Distribution Channel section of the Marketing Plan, we will use a fictitious company called XYZ Company. XYZ Company sells high-end medical lasers used in surgery.

[Beginning of excerpt from Marketing Plan]
Distribution Channel
In the current company, all educational materials are delivered via printed books and physical classes at our onsite educational facility.

In the transformed company, all educational products and services will be delivered over the Internet or at the customer location. We will provide service and support coverage remotely with a 24-hour support line. Overnight Federal Express will handle any required equipment repairs or exchanges.

The inventory will consist of online products stored in files and backed up in database repositories online. The Internet service provider will maintain these databases. Therefore there will be no physical inventory. This will result in a significant reduction in facility costs.

All products will be distributed using online methods. A typical transaction for an educational product will take place as follows:

Customer arrives at the XYZ Company website and clicks on Products. From the product menu, customer selects XYZ2590 Expert Training module, Online live session.

If the Customer has an account with XYZ Company, then they go into the Order Entry system; if they do not have an account, they are sent to the New Account menu, their email address is added to the main Customer List in the XYZ Company database, and the customer is sent to the Order Entry system.

- Customer specifies the dates for the online class
- Other add-on products are offered.
- Customer is moved to the checkout screen.
- Customer enters payment information.
Payment information is verified and a confirmation message is displayed.
Customer receives a printable receipt and class information in their email box.

If the order included any downloadable products, the links for these products are sent to the customer email box.
[End of excerpt from Marketing Plan]
André Larabie

www.andrelarabie.com