Financial trouble can hit any company; one bad decision can be all it takes to force a business owner to have to seek alternative means of securing their future.
And that doesn’t even factor when financial difficulties are caused by outside factors out of your control. In a post-pandemic world it is more clear than ever just how fragile things can be.
Nearly all businesses in the UK felt the financial sting of the COVID-19 pandemic, lots of them were forced to close their doors, and many of those fortunate enough to be in the position to remain open have not been able to do so without sacrifice.
So your business is in financial trouble, what options are available to you that can consolidate your position in the market and keep your future bright?
One of the most effective and common methods of consolidating a businesses position in the market in both the short and long-term is a business restructure.
In this article, we discuss exactly what is restructuring in business, how it can help you, what the potential pitfalls are of it, and how Inquesta can help get you through it.
What is a Business Restructure?
A business restructuring is a significant action undertaken by a company in order to modify and reshape its operations with the intention of reducing debt, increasing efficiency, and improving the business going forward.
A business restructure is most common in companies facing financial difficulties.
A company that finds itself in increasing debt, that is struggling to make payments on time, will often opt to restructure in order to come up with a sustainable way to repay any creditors and pay off any accrued debt.
Other common causes for restructuring are:
- Reduce/consolidate debt
- Merge with another business
- Reduce company costs
- Rearrange roles within the company
Why Corporate Restructuring is Important?
In much the same way that there are lots of reasons to consider restructuring a business, there are also a variety of reasons that it can be an important tool in the arsenal of any business owner:
- Can act to revive a dying business
- Significantly increase a company’s value
- Set a company up for a change of ownership
- Position a company for prolonged growth
- Assist businesses to readjust to ‘the new normal’ post-pandemic
Overall, the importance of corporate restructuring stems from the ability to right the ship, turn away from a developing storm and head towards calmer waters. It can act to save a company in decline, while setting it up for success.
How to Restructure a Business
The total time to undertake a successful company restructuring will depend on a multitude of factors, no two cases are ever exactly the same, as such, one restructuring could take significantly longer than another.
The timeframe can depend on a few factors, for example, if a company is under threat of liquidation and desperately needs to restructure within a certain period of time to rescue the business.
Regardless of the circumstances behind a restructuring, it is vital that you don’t go in unprepared. A qualified professional can come in at the planning stage and guide you towards a successful restructuring that can help you achieve any goal you have set.
The business restructuring process has a number of things to consider:
A key step when restructuring to nurture long term success is to, simply, assess what specific area needs restructuring. Restructuring can come in multiple forms, one of the most common is in streamlining a business. This involves identifying the areas of the business that are failing, which can then either be shuttered, scaled down, or modified.
A reorganised and slimmed down business is a more efficient one. In assessing each aspect of the firm, you will gain additional insight that can also be helpful when planning for the business post-restructure.
If you can locate a particular area of the business that is struggling to maintain appropriate standards then you need to begin considering what a restructure can do to improve this aspect, and ease the burden for the betterment of the company on the whole. There is no point rushing into a restructure without considering what’s the best way to tackle it.
Preparation is Key
Once decisions over what aspects of a business are being restructured has been decided, it is vital that you create detailed plans of how restructuring can take place. What changes are to be made, what impact it will have etc.
It is pivotal that you create plans for the short-term and long-term of the business in order to protect the business throughout, in the immediate aftermath, and the new future post-restructuring.
The process of restructuring can, in itself, be a challenging and uncertain time, with a fair share of stumbling blocks awaiting you if you aren’t careful.
With the threat of jobs being lost looming overhead, it can also be an emotional time, it is key that a restructuring is handled with tact.
An important step to getting through a business restructuring unfazed can be to speak to trusted industry experts, to seek their support and assistance through the entire process.
No matter what you need, seeking advice as early as you can protect you against any possible complications that could arise at any time,
Assess, Assess, Assess
A vital step that companies often neglect to do is to undertake a proper overview of the restructure. Have the initial goals of the restructuring been met? Can anything be improved further? Is the business now set up for long term, sustainable success after the restructure?
Answer all of these questions and you should have a clear and transparent view on where your business is headed.
Expert Corporate Restructuring Advice from Inquesta
Opting to restructure a business can be the best way to make sure that you are running in the most efficient, optimal way for future success.
At Inquesta, we have the means and the knowhow to ensure that your restructuring goes through without a hitch, for you, your employees, and the ongoing future of your business.
Our expert team have years of industry experience and are qualified to offer a trustworthy service, to educate you on the restructuring process, and guarantee that your business is set up for the future.
We know that when it comes to your business, you want a bespoke service from top to bottom, and that’s why we make sure to provide a personal service in a delicate and professional manner throughout.
We have a dedicated guide available on our website, providing you with all of the tips and information you could possibly need when it comes to restructuring and recovering from financial adversity, particularly in the wake of the pandemic — especially now that furlough has come to an end.
For more information about how Inquesta can help you, book a free consultation or contact our team today.