Issues/Implications
Nearly all businesses will face performance challenges, be it failing to meet revenue or profitability targets, poor cash conversion from operating profits or underperforming/loss-making divisions or individual sites.
These may be pre-existing challenges or may have arisen recently because of the economic climate or recent organizational changes or sector focused issues.
If these issues are not addressed, they could result in the breach of lending covenants, the loss of confidence from lenders or other key parties and future cash flow pressures.
Solutions
The majority of underperformance issues can be resolved without long-term consequences to the business if they are addressed early and to maximize the number of options available. Options include:
- Considering the business’s working capital and potential improvements that could be implemented
- Embedding a cash culture in the business, so cash does not have to be managed daily, thereby freeing up management time to focus on longer term strategic goals and growth
- Understanding the root cause of underperformance and creating viable cost reduction programs across the business
- Consider the sale or closure of loss-making divisions to improve the overall operating performance of the business
Please contact us to explore how we can assist you in meeting your business's objectives.
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