How your Business Team helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Team Work

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 04 | Your Business Team

The importance of your team and teamwork cannot be overstated, but are you aware of who is on your team? It's not simply the members of your management team! Your friends, family, your network contacts, employees, consultants, they’re all your team.

Finding and working to the best effect with those members of your team who can help you the most is a real skill that takes time to develop, but it is well worth it.

Choose people you can trust, that are qualified and experienced to help you when you most need it but keep an open mind. It may not always be apparent which of your team, if any, can help you when you most need it.

Accounting Professionals

Your accountant does far more than simply count beans. Depending on your needs, he can have a wide-ranging role in your business above and beyond generating management accounts including the roles of tax agent and business advisor. Other things your accounting processional will be able to do for you include process coordination as well as helping you to interview candidates for your financial management team.

Your Management Team

A strong management team is essential to making it through a restructuring and coming out of it healthy and profitable. In this section, we will talk about three key areas: The board, your management team and key staff.

The Insolvency Practitioner

If you are insolvent or are considering buying a distressed or liquidated business, your accountant should be able to introduce you to a Insolvency Practitioner (IP) and work with you throughout the process. Remember that depending on how up-to-date your information is, and the complexity of your business structure, there will be a lot of communication before, during, and after the restructuring process.

You and Your Legal Professionals

If you intend to purchase the assets of your old company in a pre-packaged deal, a solicitor will generally be suggested by the IP as he knows how they work and the structure of the purchase agreements the IP prefers to use. The solicitor is, of course, independent. It’s up to you to negotiate the contract with him to the point where the IP accepts it. The IP is legally bound to act on behalf of the creditors, and as such will be expecting best value for the business assets. You will need to consider the fees, agreements and contracts, communications and record-keeping.

The Surveyor

If you intend to purchase the assets of your old company, a surveyor (also known as an appraiser) will generally be suggested by the IP as he knows how they work. The surveyor is, of course, independent and it’s up to you to negotiate the valuation with him to the point where the IP accepts it.

The IP is legally bound to act on behalf of the creditors, and as such will be expecting best value for the business assets. The surveyor will look at the book value of the business assets and take a walk around of the premises. You don’t have to be there for this, but it may be worth it to ensure that items are picked up correctly and not over-valued, especially if they aren’t yours.

Dealing with Banks

It is something of an understatement to say that having the best relationship you can have with your bank manager is a must. You need this person firmly on your side in order to facilitate lending and support when times are difficult. However, this personal also has a responsibility to the bank, so you must be able to provide information and communication to ratify your position when asking for help. In addition to your relationship with your business banker, you should look at issues like using your bank as a sales finance provider, the use of a back-up banker, alternative bank accounts and personal guarantees.

Sales Financing Companies

Sales financing is the practice of receiving funding from a bank or other lender, against a proportion of a company's approved invoices. Usually a company offers customers credit, meaning that between an order being placed and settlement of the associated invoice, the company may have to make clever use of its existing cash-flow to pay suppliers and allow it to make further sales.

Financing via this process provides immediate cash-flow, which can then be used as working capital to satisfy suppliers and meet the day-to-day operating costs. Any company that finds a gap between raising an invoice and receiving payment places a strain on their available working capital may want to consider sales financing. There are two main forms of sales finance, both offering the benefits of a more consistent cash-flow. They are factoring and invoice discounting.

Even Your Competitors are on Your Team

You’ve heard the expression keep your friends close and your enemies closer. Well it holds true in this case. This may surprise you, but your competitors are part of your team as well. They act as a barometer for what’s going on in the market and an indicator of where your weaknesses are as a business. Without competition, getting better at what we do and improving our products would take much longer.

On the other hand, depending on your relationship with them and their general level of professionalism, if given the chance they will make life difficult through you during this period of change and restructuring.

How Business Simplification helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Simplification

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 03 | Simplification

What does it mean when something is simple? In this case it means doing away with anything that is not essential to the function of your business. You need to question everything in your business. Every system, every role, every responsibility—including that of the CEO—needs to be questioned and examined thoroughly and those things that are not necessary need to go.

Simplification is rarely easy or nice, but you must always keep your business objectives in mind and be as direct and honest as you can. If it's done quickly and openly, a fresher, more capable, more nimble business will emerge at the other side, ready to take on the new challenges it will face as it moves from survival to success.

Pricing Issues

How you price your products and services has a great effect on your ability to thrive as a business. Too high and you are pricing yourself out of the market. Too low and you will be unable to sustain yourself. Finding the right point, though, can be difficult. However, you should not leave it entirely to chance. You must do a little research into your market, your industry, your costs, different pricing strategies and tactics—everything that goes into pricing your products.

Overhead Reduction

Another way to boost your profits is to cut your overhead. This is a time to figure out what you really need and what you can do without; what you have to spend full price for and what you can get at a discount. 

Rent Issues

If you are not doing business out of your garage, or your car or a pay phone, odds are you are paying rent; and depending on your location, you could be paying a hefty sum to the landlord each month. There are a number of things you can do to make that rent a bit more palatable, such as negotiating a reduction in rent, paying monthly, renting desk space, and relocation.

Lowering Staff Costs

As oppressive as it may sound, continual monitoring, reviews, and reporting on staff productivity is essential for the health and development of your business. It is also a necessary thing for the health and growth of your employees, though few are likely to see it that way. Some other things you can do to lower your staff-related costs include eliminating redundancy, instituting a program of forced holiday leave or a shortened work week. 

Maintaining Cash Flow

Cash is the lifeblood of your business and it has to flow. You can keep the cash flowing, however, if you bill promptly, avoid overtrading, recover debts, trim inventory, renegotiate your credit limits, approach your bank, consider factoring or sell some assets.

Charges, Fees, and Other Expenses

During a restructuring process you will be required to provide a number of  documents dealing with expenses. If you haven’t got them to hand, or can’t get hold of them easily, take action immediately to get hold of copies where you can. The absence of these documents can make things take much longer than necessary and throw up some surprises if you’re not prepared.

Restructuring Options

You must determine what is best for the business and your creditors because quite simply you are currently funding your business with their money and you’re doing it, quite probably, without their consent. In that situation, your only real options are trade and repay, loans, investment, extracting your business and restructuring, or administration and liquidation. 

The Restructuring Process – Program and Costs

It is hard to say what this whole process of restructuring will cost. It really all depends on the specifics of your case. However, there are a number of things you can count on having to deal with – costs, goodwill, time and effort, the program itself, incorporation, banking and VAT issues, and business financing.

How Business Reporting helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Reporting

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 02 | Reporting

No business can survive without some basic level of reporting. Without it, you have no idea where you are and that can quickly get you into trouble. Problems arise, and while you want to do better, you  have no idea where to start. 

Reports will help you get a clear picture of your business, where it is now and what it will take to get it where you want it to be. This has to be done right, however, and in the most efficient manner possible, enlisting the support of everyone involved. Problems within your business can be so multi-layered that it can be dizzying to follow the reporting path, but it must be done. With everyone helping as they should, the process will be much easier than otherwise. 

The Signs of Trouble

You don't need reports to tell you that you are in trouble. Your business will tell you, if you know what to look for. In the absence of proper reporting, watch out for the following signs as they will let you know you’re in for a struggle and if you need to take immediate action.

  • Phantom Orders and Wishful Thinking

  • Limited Information Flow

  • Disillusioned Staff

  • Insufficient Cash

  • Theory of General Negativity

  • External Signs – Changes in your banking relationships

  • Heavy Discounting

  • Angry Suppliers and Creditors

  • Rumours

The best way to deal with any of these signs is to have all the information you need at your fingertips before you take action, and before its too late. So get on top of your business reporting as soon as possible!

Business Areas to Report Upon

Report on all the specific areas of your business as each requires specific skills,  take different lengths of time, and have different costs associated with them. These areas normally have one person or a team of people who are responsible for them and if there’s just one person in a business, then he must fulfil the leadership position in all these areas and report on each to be able to quantify the return on investment and determine where exactly improvements can be made. These areas include:

  • Marketing and PR

  • Lead Generation

  • Opportunity

  • Tendering

  • Closing

  • Delivery

  • Finishing

  • Feedback

Key Performance Indicators

Key Performance Indicators (KPI) are easy to understand ratios and calculations that can be tracked over time to determine whether a particular area of business is improving or getting worse. They are generally calculations made from a number of different measurements. KPI can communicate that meaning simply and quickly and point to areas that need attention. Some key performance indicators include:

  • Number of Clients

  • Lead Cost ($)

  • Opportunity Percentage Rate

  • Quote Percentage Rate

  • Hit Percentage Rate

  • Efficiency (as a percentage figure)

  • Slippage (as a percentage figure)

  • Profitability (as a percentage figure)

  • Turnover (in dollar amounts)

Necessary Measurements

To be able to take advantage of key performance indicators, you need to have data from your top down and bottom up measurements – the raw data of your business. The key here is to work in both directions, otherwise the reports won’t join up and they won’t mean anything.

Taking Responsibility

Deciding that you are going to generate and use these data is one thing, but actually implementing it is something else. You need to create spheres of responsibility within your management team with each member knowing precisely what reports they are personally responsible for. In addition, you also have to make sure that the reports flowed in the right direction, from those responsible for generating them to those responsible for acting on them.

By empowering everyone to look out for themselves as well as for the company as a whole because they have vital information, and implementing a robust reporting system to pass that information to where it can do the most good, the search for reasons and excuses for not making decisions and handling problems in a timely and proactive manner is minimised 

Management Accounts

Having an up to date financial picture is crucial for you to steer your business. Management accounts offer this essential information. You should be receiving management accounts at least monthly and preferably weekly, especially during challenging times when daily reporting becomes even more desirable. If you are not receiving complete management accounts on a regular basis alarm bells should be ringing.

Here are the management accounts you need to see:

  • Accounts Payable

  • Accounts Receivable

  • Cash Flow

  • Profit & Loss

  • Balance Sheet

The Wheel of Continuous Improvement

The Wheel is about bringing it all together and seeing how all the aspects of your business interrelate and connect to produce a holistic system that should undergo a process of Continuous And Never-ending Improvement (CANI). Remember, each sector of the wheel is as important as the next, and each should be nurtured and developed to ensure the whole business can operate as smoothly as possible.

TTC - Wheel Example 1200px.png

How Business Planning helps you save, turnaround, and grow your struggling professional client service consultancy, design, marcomm, PR, digital or creative agency business (checklist).

Save Turnaround Grow Your Struggling Consultancy Practice Studio Agency Business Planning

A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.

Click to listen to the audio or read the full transcript below and sign up for my Creative Core newsletter and I'll send you a quick-start business turnaround email course complete with 96 point action checklist and business turnaround strategies you can start using today.

Total Business Turnaround
Part 01 | Planning

Without planning, no business can succeed. You need to know where you are, where you want to be and how you plan to get there and that begins with your business plan. Of course, with today's economy and the immediate demands it places on you and your team, strategic planning may be the last thing on your mind. After all, it is hard to do the kind of big picture thinking it takes to work ‘on’ your business when you have to work ‘in’ it all the time. That, however, is precisely what you must do.

You can survive the turmoil by establishing and pursuing a goal worth achieving. This means examining your aspirations and expectations, your investment and how you plan to exit, the numbers you need to see to make it work, possible buyers and the value of your company, turnover, profit, and your business plan. All of these are important factors in determining winnable goals for you and your company. 

Aspirations and Expectations

You begin by examining what you want to achieve. Once you have determined that, look at your business and see what you can reasonably expect from it. Will your business, as it stands, fulfil your aspirations? Does it exceed them? Does it fall short? Remember: In all likelihood, you will, at best, only achieve to the level of your expectations. You can avoid this by examining and basing your plan upon an honest assessment of:

  • Your expectations – What your business realistically can do.

  • Your goals – What you really want to accomplish. 

  • Your education – The experience and skill your team and you bring to the problem.

  • Your focus – The way you use that knowledge and experience.

Your Investment and Your Exit

People change over time and so does the way they see things. You and your partners may have a very different perspective on your business today than you did at the start. Keep in mind that times of difficulty and upheaval create the perfect conditions for change. For you and your partners, this may mean a change in how invested in the business you wish to be or even how you plan to exit from it and under what conditions. 

The Freedom Calculator

For most people, economic freedom and freedom in general are almost one and the same. It is merely a matter of what you want to do with your money. The Freedom Calculator takes relevant data including your living expenses, dream realisation and re-investment figures and gives you a Capital Critical Mass that, at a reasonable 5% - 10% per annum managed investment return, will allow you to live the life of your dreams.

Target Buyers and Investors

If a listing on the alternative stock exchange is not practical, then you need to find investors or even buyers for your company, which might include your existing management team, if you wish to reach your Exit Point.

You need to identify the gaps between your services and those of your competition. 

Consider joint venture partnerships, finding suitors among your larger competitors and your clients, and modelling your business on their best practices to create a match.

Target Company Sale Value

While the sector your business is in, the current market conditions, and how strong a competitor you are all play a role in determining the value of your company, your business can realistically be valued as a multiple of profit or turnover, or a combination of both. Research into this area will help you solidify your aspirations and expectations and understand the key issues that potential investors consider. This will also help you tailor your business plan, investment presentation and negotiations to achieve the best possible outcome.

Target Turnover and Profit

Calculating your Target Turnover and Profit with data including target company value, an estimated industry earnings multiple, profit figures, target turnover and current turnover, provides an overall structure to the plan as well as a timescale. Any potential investor wants to know what return they may make for their investment over a given period of time and what the risks involved are. This also allows you to figure out the growth you will need to achieve over a fixed period of time in order to reach your Exit Point. 

Company Valuation Methods

You can use your projections with the Discounted Cash Flow Method to determine a reasonable, ballpark value of your company. Along with the Discounted Cash Flow Method you should consider your pre and post-money company value, investor equity, negotiation, incentives, areas of increasing value, goodwill, and multiples of earnings. All of these play a part and should be part of your calculations. Remember valuing your business is an art, not a science. However, it is better to be up to speed with the various methods so you are prepared to justify your own valuation of your company.

The Business Plan

When you are developing your business plan, you need to assess the roll you are to play in the business, how involved you will be and what you want to get out of it so you can concentrate your efforts right where they need to be. You must also take into account the functions of the business—the service it provides and the support it gives to you and the other owners—as well as the need for a healthy combination of inward and outward focus.

Finally, you need to be able to ensure consistent planning and follow-through in order to keep from making mistakes that sap time, energy and money from the growth of your business.