As the year comes to a close and 2025 looms closer, many business owners are undergoing a natural process of reflection. For some, it’s a time to celebrate growth and success, while for others, this process can reveal some unsettling realities. Declining profits, mounting debts and operational inefficiencies can all feel overwhelming – but they also present an opportunity to reset and rebuild.
If you’re concerned about what’s to come, an agreed business turnaround strategy can guide your company back onto the right path. By working to a clear framework for recovery, you can address problems in a much more targeted way. Here’s what to include in your business turnaround plan to maximise your chances of success in the new year.
Problem Diagnosis
Successful business turnaround always starts with understanding the root causes of your challenges. It’s no use just accepting that things have started to go downhill; you need to be picking at the hows and whys and conduct a thorough review of the financial, operational and market positions that got you to this point. By identifying the core problems, you can create a targeted business turnaround rather than wasting resources on symptoms.
Set Clear Goals
After identifying the root causes of your financial problems, it’s essential to define where you want your business turnaround plan to go. Set clear and realistic goals to give your efforts direction and purpose. These may blend immediate priorities with long-term objectives, ensuring that you are balancing survival with a degree of hope for the future.
Cash Flow Management
Improving cash flow is often the first step in any business turnaround strategy. Without adequate cash flowing into the business, even the best plans can falter so take the time to dissect your cash flow statements and implement measures to create the breathing room you so desperately need. A range of actions will likely help you to satisfy this part of a good business turnaround plan, including renegotiating payment terms with suppliers and speeding up invoicing to ensure cash is coming into your business at the right times.
Cost-Cutting
If your business is struggling, you should always scrutinize your costs and see if there are any areas where you can make cuts. However, cost-cutting should always be done strategically and as part of your wider measured business turnaround plan, not on a whim. The goal is to streamline your operations without compromising the quality of your products or services or jeopardizing the long-term viability of your business relationships, so focus on reviewing unnecessary costs, reducing overheads and addressing inefficiencies within the supply chain.
Operational Restructuring
If inefficiencies or outdated practices are absorbing high costs and holding your business back, a process of operational restructuring may be a key component of a successful business turnaround plan. This involves reviewing and refining your internal processes to improve productivity and performance by reorganising teams and departments, modernising operations, and automating repetitive tasks. While these types of operational changes can be disruptive in the short term, carefully planned implementation will be essential for boosting the long-term viability of your operations.
Employee Engagement
Employees are often one of the greatest business assets, particularly during a period of turnaround. Aspects of your business turnaround plan are almost certainly going to directly impact your workforce, so keeping it informed and engaged can make a significant difference in your success. Make sure that you are as transparent as you can be about the challenges the business is facing and plan to address them, recognising and rewarding employee efforts at a difficult time. A motivated team can drive the changes needed to turn your business around. Make the most of your employees and avoid any snap decisions that will drive them away.
Debt Restructuring
For businesses burdened by unmanageable debt, restructuring will be necessary to regain control and avoid liquidation. By renegotiating payment terms with creditors and restructuring debts into more manageable chunks, you can start to get a clearer picture of what financial recovery will look like. In many cases, a formal agreement through a Company Voluntary Arrangement (CVA) will be the best way to achieve this as it will provide clear breathing space and allow you to keep trading while repaying debts over time.
Create Your Business Turnaround Strategy Today
Turning your business around is no small feat, but by incorporating the right elements into your strategy, you can lay the groundwork for sustainable recovery.
At Ballard Business Recovery, we understand the unique hurdles you might face when putting together a business turnaround plan and are on hand to ensure that you make the right considerations as you look to the future. Our team of business rescue experts has years of combined experience helping businesses to address debt, restructure operations, and set clear goals. Simply get in touch today to discuss your challenges with us and start putting in place a suitable business turnaround plan.
