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How to Turn Your Company Around Before It’s Too Late

Turnaround Company
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Times couldn’t be tougher for companies. Due to the pandemic, thousands received shutdown orders this spring. And just when the economy seemed to turn the corner with encouraging job numbers, more bad news hit. Governors in multiple states again ordered closings, devastating weakened organizations. If they are not careful, many companies are likely to go under, forever closing their doors. 

Getting it Wrong

COVID-19 offers an example of how organizations can run into economic trouble for reasons beyond their control. But there are also plenty of mistakes companies make which they can and should address to stave off collapse. 

The core of the problem comes down to one word: strategy. Too many businesses do not establish a plan. Instead, they bounce around from one day to the next, hoping for the best but doing little to prepare for the worst. Worse, few have a sense of future trends and are not doing enough to reinvent their model as innovations transform their industry and how they operate. 

If and when short-sighted companies run into trouble, they tend to freeze like a deer in the headlights. Unable — or unwilling — to take action, they return to wishful thinking, hoping sales will return and all will go back to normal. Unfortunately, this doesn’t always happen. In fact, it’s getting rarer and rarer.

To use another animal analogy, the opposite of passivity is needed when the wolf is at the door. Threatened companies must take quick, decisive action before burning through their available cash. If they don’t, they will exhaust all of their options, leaving them vulnerable to insolvency.  

Of course, these companies may have their own reasons for doing too little, too late. They may even be well-intentioned. Many don’t want to downsize their head count because they are loyal to their people. Others might have lost their way years ago and lack the vision to once again be successful.

No matter what specific challenge your company is facing, if it’s in the danger zone, it may be best past time to call in a Certified Turnaround Professional (CTP). To highlight what we do, I’ll share a brief story.

Going From Red to Black

A few years ago, an aerospace firm in Pasadena was suffering from typical entrepreneurship problems. Over-investing in new ventures unrelated to their core mission, they were burning through their capital. Fast. They sought to launch five new products simultaneously, but all were losing money.

As soon as the organization brought me in, I made quick, decisive moves. First, I advised them to halt development on four of the projects, freeing up about $200k/month. Next, I created a plan to accelerate the launch of the fifth product critical to the company’s future. Though at the time, this project was costing $100k monthly, I knew we could stabilize within 90 days with the strategy.

At the same time we renewed focus on the product launch, I reviewed customer activity for problems. Based on my advice, the company stopped taking orders from businesses which were generating low profitability but costing time and energy. Coupled with a reduced staff and redesigned processes to improve labor utilization and efficiency, I am happy to report my client went from a $4 million annual predicted loss to break-even in 90 days.

The Winning Approach — When All Hope Appears Lost

When working with distressed clients like the aerospace organization, I use a technique called “Starting Over.” What this means is I bring management into a conference room to ask these key questions: 

-If you only had so much money to spend, how would you deploy it?

-What does your dream team look like? 

-What’s your plan to become profitable in the next 1,3,5 years?

-What’s stopping you from reaching your goals?

-What can we do NOW to turn things around?

After receiving these answers, I set to work establishing a blueprint for success with measurable goals with my client. I also make it a point to schedule follow-up meetings to ensure the team stays on track to hit their targets. After all, a plan is only as good as its execution.

Maybe You Should Consider a CTP?

To be sure, many CPA’s and other financial advisors say they can turn-around a company. However, just like any other profession, if you are bringing on someone, you want them to be certified at what they do. To become a CTP, applicants must have five companies write letters in support of your expertise, stating you actually helped them turn around their business.

Ultimately, the reason why CTPs are so valuable, especially in this climate, comes down to strategy. When it comes to leading and managing a business, too many companies get stuck in the grind. They lose their way. Beginning with offering a fresh perspective, the right CTP can turn things around. Before it’s too late.

This begs the question: Is your company in danger of collapse? At Blueprint CFO, my certified team consists of individuals possessing years of turnaround experience. Major institutions, including Wells Fargo, US Bank, HSBC, and Comerica Bank have brought us on to successfully fix difficult situations. If you would like to learn more about our fractional CFO services, please read about me in Forbes or contact me @ [email protected]

Valuation Planning

Blueprint CFO will work with executive leadership to determine shareholder value, and run various models to determine estimated company valuation. Together, we will determine milestone objectives to increase shareholder value and track company performance in relation to these targets. We will review your company’s organic and acquisition growth options to create shareholder value, and emphasize tax planning to optimize shareholder value upon a sale or purchase. We can also focus on Initial Public Offering (IPO) Planning and Readiness.

Analytics & Business Intelligence

We believe that being data-driven is key to profitability. As such, we can help you create meaningful dashboards and scorecards for your business, analyzing performance against key performance indicators and other factors. Our profitability reporting and analysis tools will help drive business decision-making and provide insights into trends, predictions, results, and potential strategic direction moving forward.

Goal Setting & Tracking

Our team can partner with company leadership to establish goals and objectives for the company, for both the short and long term. Additionally, we will help leaders develop meaningful Key Performance Indicators (KPIs) to track and measure results.

Insurance & Tax Planning

Blueprint CFO can work with businesses to review insurance needs and requirements, as well as plan for taxes and R&D credits.

Human Resources

We can assist your HR department with employee benefits planning, and can also perform compensation studies to ensure best practices are implemented across the business.

Accounting & Finance Support

Whether you have an internal team in place or need more hands-on assistance, Blueprint CFO can oversee and advise your accounting and finance department. From preparing general ledger transaction entries to completing month-end closes, forecasting to crafting financial statements, developing customized reporting packages to implementing more effective software, Blueprint CFO can bring you everything from a supportive junior or senior accounting team, all the way to high-level strategic CFO consulting.

Mergers & Acquisitions

Blueprint CFO can partner with company leadership to improve strategic business plans and assist with the development of organizational growth strategy. We can also create financial reporting packages and proformas for capital raises, investments, acquisitions and/or banking requirements, and provide due diligence on company-focused deals.

Financial Planning

We can prepare, create and/or review financial statements. This includes providing trend analysis, developing cash flow projections, and tracking operational and financial performance, with insight into budget and forecast variances.

Banking Services

Our team can help your company to establish high-level banking relationships, and offer expert advice and support when it comes to sourcing bank loans, etc. Additionally, we can review and determine the optimal capital structure for refinancing or a liquidity event.

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