SMALL BUSINESS TURNAROUNDS

1. SMALLBUSINESSTURNAROUNDS COLIN BATCHELOR 30.08.2006

2. STRUCTURE OF PRESENTATION • Some introductory remarks. • Recognising the need for a turnaround. • Stabilising your finances. • Deciding what to do. • Making it happen.

3. A SMALL BUSINESS • Less than 100 staff. • Turnover less than R20m. • Overdraft less than R50m. • Owner/managed.

4. RESPONSES TO CRISIS • A gold fish. • An ostrich. • A rabbit in the headlights. • A headless chicken. • A sheepdog.

5. TOOLKIT • The importance of business skills. • Managers are critical in a crisis. • What to do in times of difficulty. • Take the time to do a business health check.

6. SPOTTING THE WARNING SIGNS • Why businesses fail. • The types of business failure. • Normal business failure. • Avoiding failure. • The symptoms of normal failure. • Checking your business’s health to spot the warning signs. • Take an ‘A’ score test.

7. ‘A’ SCORE TEST

8. ‘A’ SCORE TEST CONTINUE

9. TURNAROUNDS • Obtaining support for a turnaround. • Understanding your options. • The conditions necessary for a successful turnaround. • The phases of a turnaround. • The turnaround process.

10. UNDERSTANDING YOUR OPTIONS • Sell. • Close. • Fix.

11. CONDITIONS NECESSARY FOR A SUCCESSFUL TURNAROUND • A viable business. • Time. • Money. • Vision. • Management. • Commitment.

12. 1.Recognising the need for a turnaround • Indentify symptoms • Identify causes • Assess urgency • 2.Surviving in the short term • Manage cash to survive a crisis • Understand financial performance • Set financial targets • 4.Doing it • Obtain stakeholder support • Manage change • communicate 5.Keeping on succeeding • 3.Deciding what to do • Undertake strategy analysis • Investigate performance in detail • Set strategy and action plan Manage the business Manage the turnaround risks PHASES OF A TURNAROUND

13. UNDERSTANDING WHY BUSINESSES FAIL • The causes of normal failure. • The five key areas. - Management structure - Strategic challenges - Financial control - Operational control - One-off projects

14. UNDERSTANDING YOUR FINANCIAL POSITION • What you need to know. • Insolvency. • Cashflow forecasting. • Support from the bank.

15. MANAGING A REAL CASH CRISIS • Wealth warning. • Achieving balance. • The key steps to survival. • Improving profits. • Improving management.

16. MANAGING A REAL CASH CRISIS • Controlling the cash you have. • Obtaining more cash from normal trading. • Obtaining more cash or credit from elsewhere. • Reducing and/or controlling outgoing cash. • Reducing the amount of cash needed to trade.

17. UNDERSTANDING AND CONTROLLING YOUR FINANCIAL PERFORMANCE • What you need to know. • Profitability. • Financial stability. • The management/financial information you need.

18. SETTING THE STRATEGY • It’s your business: what do you want to do? • Setting your personal goals. • Industrial trends: ‘PESTER’ analysis. • Competitive advantage. • The value chain.

19. MANAGING MARKETING • Successful marketing. • The importance of marketing. • How to sell your product. • Tailoring marketing strategy: the four Ps of marketing. • Managing the sales process. • Managing the sales force.

20. THE VALUE CHAIN The mission: ‘The lowest cost widget’ WHAT THE CUSTOMER WANTS SET YOUR BUSINESS UP TO DELIVER

21. MANAGING CHANGE • Managing and motivating yourself. • Understanding your business’s structure and culture. • Assessing your team. • Managing people and the process of change. • Managing a project. • Getting stakeholders on board and keeping them there.

22. SUMMARY AND CONCLUSION • Recognise the need for a turnaround. • Stabilise your finances. • Decide what to do. • Make it happen. • Conclusions.

23. ACKNOWLEDGEMENT • This presentation draws extensively from, - Turning a business around by Mark Blayney - ISBN 1-84528-063-4 • Other bibliography - The definitive business plan - The definitive guide to managing the numbers by Richard Stutely, FT.Prentice Hall