If your business hits a snag (like mine did!), then at some point you may have to consider restructuring. Restructuring is widely believed to have negative connotations; however, it can simply be a way to help your business operate more efficiently.
What Restructuring Involves
You cannot afford to overlook even minor details while restructuring as the process can have wide implications, depending on the health of your business. The following are the different options of restructuring that you could evaluate:
When restructuring is unavoidable, the 4 C's should be remembered during the implementation of the restructuring plan:
Communication: It is vital to ensure that you personally communicate the restructuring plan to the staff, instead of giving the job to someone else. Transparency in communication is vital. You need to gain the support of everyone concerned with the restructuring plan. You should communicate about the plans and strategy with no ambiguity or mincing of words. It is essential to keep all parties involved updated with information about implementation and the desired results.
Concentration: It is important for you to concentrate on the core competencies in times of scarce resources, to conserve and utilize them for optimum productivity. This may require disposing of non-core business, even if it is painful.
Cutting Costs: This is another vital consideration in the process of restructuring. All cost areas should undergo a microscopic investigation. If required, cut costs via salary reductions at all levels. Outsourcing, de-layering and even downsizing should all be considered.
Cash Flow Management: You should take immediate steps to improve your cash flow. This is possible by a reduction in the inventory, credit allowed to customers, perks and purchases. Ensure prompt collection of company receivables.
Restructuring may be necessary to stabilize a staggering business. However, with determination and smart managerial initiative, you will certainly be able to bring your business back on track!