The role of an Interim Manager for business turnaround
If your business is experiencing difficulties, you will have to put in place actions to prepare for its business turnaround , in order to preserve activities and jobs as much as possible.
A Transition Manager can help you effectively carry out these complex actions.
What is business turnaround?
A business turnaround can be defined by the need to completely rethink the activity in order to put the company back on the track of economic growth.
The objective of a turnaround is to achieve substantial savings in order to maintain the viability of a business and ultimately achieve development and growth objectives. This operation often involves cost reduction actions.
The causes of a business turnaround are diverse: they can result from various factors
- Economic situation: unprofitable investment, health crisis, etc.
- Internal errors: poor monitoring of the management of unpaid debts for example, but also management errors leading to significant absenteeism and a lack of productivity
- Evolution of the market: arrival of an “aggressive” competitor on the market, disinterest of the public for the product sold…
- Failure to comply with safety and environmental rules, leading to work accidents and occupational diseases
In this context, business turnaround requires the implementation of an action plan to redefine the growth of the business.
It is a process of restructuring which makes it possible to reorient the strategies put in place by the leaders, in order to ensure better long-term profitability .
How to anticipate a business turnaround plan?
1) React quickly to avoid the crisis
It is up to the manager to spot the early warning signs of a crisis in the company and to react very quickly to prevent the situation from escalating.
Here are some examples of actions that can be implemented very quickly:
- Block orders: while waiting to clarify the situation, it is recommended to avoid maintaining orders that do not represent a real emergency. Strategic choices have to be made.
- Reduce costs: it may be necessary to implement a rigorous cost reduction policy within the company. In this context, an analysis of the charges in collaboration with the accounting department is often beneficial.
- Follow up on unpaid debts: more than ever, it is absolutely necessary to precisely determine the bad payers, to set up a procedure of injunction to pay by relying if necessary on a specialized firm.
2) Negotiate with banks and credit institutions
Banks favor companies that have good profitability, are firmly established in the market and have a coherent development plan. Bankers grant loans to companies based on their ability to repay debts, in other words the profitability of the company.
If your financial situation is not in good shape, negotiations with lenders may be more complex. Being accompanied by a specialist to help you build a file is generally profitable.
3) Design a business turnaround plan with a Transition Manager
The Transition Manager can bring his expertise to identify the key players in the turnaround .
Expert in business turnaround, the Transition Manager strives to model a business turnaround plan and to provide advice to a manager, shareholder, investor or buyer. potential
How to set up a business turnaround plan with an Interim Manager?
The mission of the Transition Manager goes through different axes:
- Analysis of the situation: study of expenses, staff, cash flow, financial structure, company strategy, etc.
- Design of a business recovery plan: the Transition Manager develops solutions to make the business viable.
- Advice to managers: the Transition Manager advises the main stakeholders to define the actions to be taken and the timing to be respected.
- Implementation of the plan: the Transition Manager coordinates the plan (cash management, inventory management, purchasing, logistics), and the conduct of operations, as well as the preparation and conduct of meetings with stakeholders.
- Analysis of the business plan: the Transition Manager assesses, where applicable, the feasibility of the project of a potential buyer.
- Advice, management and animation of the transformation of the company: the Interim Manager organizes the meetings intended to remove the brakes and to mobilize the actors; he ensures the development of the new strategy and new processes; it steers the implementation of changes.
To set up a relationship between a company and a transition manager to carry out a turnaround plan , the transition management firm must delegate a transition manager with specific performances.
- A successful experience in the field of business turnaround,
- An ability to convince stakeholders,
- Managerial skills (project management, cash management, logistics management, inventory management, implementation of the new strategy and new processes),
- Excellent knowledge of the client company’s market.
A turnaround plan can enable a business to increase profitability and preserve jobs . Managed effectively, this process can even prevent a business from going out of business.
