Turn-around consultants are seasoned, experienced professional managers who usually have significant CEO or CFO experience and who go into businesses to help them strategically and tactically get a business that is in trouble back on track.
Turnaround consultants can often make the difference between life and death for a struggling business. In general they are expensive, however, my experience is that good ones can make an immediate difference and if the situation is correctable, can advise the business owner how to get back on track quickly.
There are a number of firms that provide turnaround consultants throughout the
Since every turnaround consultant has different skills and experiences it is crucial to find the one whose expertise and personality best fit your company’s needs.
If you are considering filing Chapter 11 bankruptcy, your bankruptcy attorney is the best place to start when searching for the right person. If your company’s situation is less dire, your banker may know someone they can recommend. Often large banks have a department called the “loan workout group.” This group within a bank deals with turnaround consultants on a daily basis so they are another source for referrals.
If you need a turnaround consultant, it is critical to understand how their fees are going to be charged and what kind of ancillary expenses you will be expected to pay. These typically include travel, lodging and per diem expenses if the consultant must travel from a distant city to your place of business. It is not unusual for a consultant to come into your business and do a 2-3 day intensive study of your business so they can formulate a plan to help you. Many consultants have a flat fee for this intensive research and planning. If you decide not to use that consultant, most consultants consider that you have paid for their time to do the study and develop a plan and will provide that to you. If you hire the consultant, this plan will become the blue print for change.
A good turnaround consultant will prioritize the “turnaround tasks” in such a way that the ones that make the most financial difference are worked first. These tasks often involve broad areas of a business including determining major cost cutting measures, analyzing your cost accounting processes, insuring your financial bookkeeping is providing you accurate and up to date information, and helping you use your financial statements to more effectively manage your business.
In my own experience working with turnaround consultants, they often help you restructure debt and negotiate trade payables into notes payable.
The most important thing to remember is your business still belongs to you. You should keep a very open mind to turnaround consultant’s recommendations, but ultimately you must make the decisions.
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