At my most recent turnaround engagement, I quickly identified 10 different, easy to resolve issues. They are listed below:
The company needs a new “sales-friendly” website.
A manager-level person needs to oversee receiving, warehousing, and picking, packing, and shipping the inventory to customers.
The company needs to hire an accounting manager or controller to replace the part-time bookkeeper.
I need to understand the COO’s responsibilities and determine how he can best help the company.
I need to increase the labor billing rate for the shop technicians to the current market rate.
The company needs to have loss prevention security over its inventory, so parts do not disappear on employees’ trucks. The goal is to sell the inventory to a customer, not allow it to be stolen by an employee.
The financial statements need to be updated and accurate. They must always remain current in the future.
There needs to be an operating budget for the year.
The on-hand inventory balances need to be recorded within the accounting software and accounted for properly.
A physical inventory needs to be taken, so the company knows how much stock it owns. By doing a physical inventory count, this will help me reconcile an accurate inventory balance and the total cost of goods sold for the year.
The 10 easy to resolve company issues listed above had to be solved during the turnaround, but they were not part of the “turnaround plan.” If I resolved these business issues, the chances are that those and other problems would reoccur again and again.
The turnaround plan is a list of tasks that need to be accomplished that solve the issues that caused the problems I noted above. Solving these ten items listed above that I had learned about the company from the initial meeting would be easy.
But the secret to managing a successful turnaround is to dig into these problems to determine why they occurred in the first place. The “why” is the most important part of the turnaround. The turnaround plan goal is to solve the issues that caused the problems that have not been resolved by the existing management team. The turnaround plan mostly has to do with determining the quality of the management team and then fixing their weaknesses.
My goal is always to have managers in place who can recognize potential problems and solve them well before the issue becomes problematic. Turnarounds all have to do with the management team—not the issues that are caused due to weak management.
If you read this article, and you can identify with some of the problems listed above, as the business owner, you need to understand the “whys.” You should then fix that issue and the problem that the “why” issue caused.
About the Author
Robert S. (“Bob”) Curry - Bob Curry is an Author, Keynote Speaker, Seasoned Business Coach, and successful Turnaround Specialist. Earlier in his career, he served as President and CEO of three different companies, the largest with annual sales of more than $1.3 billion dollars - all which experienced successful turnarounds under his management. After turning around three companies as the President/CEO, he started his turnaround consulting firm, and for the past twenty years, he has turned around more than eighty distressed companies in many different industries helping each to establish a strong management team and become profitable. He has published three books: "From Red to Black," "The Turnaround," and “The Turnaround 2.” He resides in Fort Lauderdale, Florida, with his wife, Esther.
All three books are true stories about the turnarounds of real companies that I have turned around during my career. In each book, I shared my (“PIR’s”) Profit Improvement Recommendations which helped turnaround the companies from Losses to Profits. PIR’s help to grow sales, reduce expenses, improve cash flow, increase profits, and most noteworthy, strengthen the management teams. All three books are on sale on Amazon.com in paperback, kindle, or audio.