When the recession was at its height many small businesses focused their attentions on survival. Although conditions are still difficult recent economic news – such as an increase in available jobs and retail sales – added to the UK officially exiting recession means that confidence is slowly increasing for small firms.
For companies that find themselves with weak balance sheets, attempting to recover and adjust to the new reality of the marketplace and to take advantage of emerging opportunities is no easy matter. Kenneth H. Marks, managing partner of High Rock Partners has put together 7 top tips to held your firm expand.
1) Crisis Stabilisation - this is about addressing a deteriorating situation and taking control of cash flow and short term financing. This begins with fully understanding all cash sources and minimising cash outflows until there is a recovery plan. If possible, identify short-term bridge funding sources to fill the gaps.
2) Leadership - make sure you have the right talent in the right places in your firm. If staff in important positions expects to stay in place, they may need to re-prove themselves.
3) Stakeholder Support - is all about communication with those involved in the business - internally and externally. Business owners must communicate the progress and trials to keep stakeholders from being caught off-guard or being surprised.
4) Strategic Focus - part of rejuvenating a business is making the tough decision of where to focus and what resources to harness. It also means that you may have to sell off some non-core assets to generate cash.
5) Organisational Change - involves establishing new terms and conditions for employment and making structural changes to run with a smaller team. Once the strategic direction of the business is set, the team needs to be shaped to implement the plan. Laying-off staff is never easy but it can re-energise the remaining team in a clearer and focused plan.
6) Critical Process Improvement - focuses on cost reductions, quality improvements and increasing revenues. This step involves taking a critical eye to the core business processes and identifying opportunities to operate more efficiently while accelerating revenues.
7) Financial Restructuring - this involves working-out liabilities and making financial commitments to a level that the renewed company can meet. It may mean raising capital or finding longer-term bridge sources of funding until the business can return to predicable profitability and positive cash flow.
