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How to Turn Around a Failing Company, If You Can

Author: Kevin Neiman
by Kevin Neiman
Posted: Apr 26, 2019

"I've seen my share of failed entrepreneurial dreams," says Kevin S. Neiman, talking about companies in crisis. As the president of the Law Offices of Kevin S. Neiman, he has witnessed firsthand how, when a company is not making a profit or is hemorrhaging money, entrepreneurs believe that that is the end for the business. They just don’t know that they need to undertake a turnaround.

Neiman opened the Law Offices of Kevin S. Neiman in 2015, specializing in practice areas arising out of distressed situations such as business financial problems. Here, he offers ten ways ailing businesses can get started on the turnaround work they need to get away from the brink of bankruptcy and to start making money again.

1. Review your mistakes and make a bulletproof plan

It is essential that you trace back your steps and find the root of your problem. Why is your company not making money? What steps did you take to arrive at the crisis? You need to review your business practices, your employees, you need to talk to your accountant and to check out your bank account, your expenses, your transactions, everything. There is always a cause for the failure, and by thoroughly searching for it, you will find it.

After you pinpoint where you went wrong, it is time to build better business plans. Time is of the essence, so it is paramount that you figure out a way to fix what went wrong and strengthen the weak spots quickly. Sometimes that means completely changing the direction in which you are going. All in all, this is no easy task. You will have to work hard and implement a new set of goals and plans in a very short time, but this step is the foundation for turning around your company so you must do it properly.

2. Manage your team effectively

Most successful turnaround efforts involve changing out one or two top-team members. This isn’t about bad managers; it’s just the practical reality that there are managers who must own the decline. And more often than not, they’re bent on defending what they believe to be true and they block the change. Removing those people, although difficult, sends a signal to your stakeholders that you’re not afraid to make tough moves.

Also, a turnaround is a real opportunity to find the next level of talent in a company. I’ve seen multiple crises where the people who added the most value, impact, and quality weren’t the ones making important decisions in the beginning.

3. Pay attention to your clients

Obviously, the clients are the ones that keep your company afloat. To start making profits again, you need to concentrate on what they want. Do some research on what they like and dislike about your company, talk to them in person, maybe ask them to fill out some questionnaires. When you are on the brink of bankruptcy, it is an unwise decision to spread yourself thin. Instead, by finding out what the majority of your clients like and want, focus all your forces on that specific thing. Show that their opinion is important and that you work hard to improve the quality of your business.

4. Take one step at a time

When your company is in a tight spot, it is normal to look for positive results as much as possible. In these cases, every obstacle or failure can feel like a death sentence, so owners try to accomplish as many things as they can, all at once. This is a bad strategy. Apart from creating a hectic work environment, this can also further lower your employees’ morale. Your best course of action would be to set up individual goals, space them out and celebrate each victory, no matter how little. This will encourage your staff and push them to work harder, which will improve the quality of your business.

5. Focus on cash

A successful turnaround is dependant on placing the focus on cash and cash returns. That is to say, bringing the business back to its primary element of success. Which investments in the company are generating cash or burning it?

I like to think about this by asking essential questions, such as whether the business has enough cash to pay the utility bill, for example. When you bring a business back to such basic elements, the actions you need to take to get back on track become more clear.

6. Seek professional help

You shouldn’t think that you have to go through this entire process alone. Talking to professional people about your company’s problems can make an incredible difference. If you are facing bankruptcy and you are not entirely sure what the best course of action would be, talk to turnaround experts or to an experienced lawyer who deals with this kind of situations and ask for their advice on what to do next.

The best part of a turnaround is that it can be incredibly fulfilling. It's great when it works. Although every turnaround situation has its own ugly and challenging issues that require their own unique and clever alternatives, there always are alternatives. It's fulfilling to see a business that was in trouble keep going.

About the Author

Mr. Neiman is the founder of the Law Offices of Kevin S. Neiman, a law firm in Colorado that specializes in issues such as bankruptcy, commercial litigation and appeals.

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Author: Kevin Neiman

Kevin Neiman

Member since: Feb 19, 2019
Published articles: 1

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