How to turn around a company in difficulty - Hoshino Shiro

How to turn around a company in difficulty

How to turn around a company in difficulty

The life of a business leader is an adventure filled with enriching encounters and discoveries. But the life of an entrepreneur is not a long calm river, and no one is safe from encountering a complicated situation without really knowing how to deal with it.

We believe that problems shouldn't stop you from moving forward. So we've put together the best advice to help you turn around a struggling business. Good to keep reading!

Become aware of the difficulties

Do not underestimate dysfunctions

"Everything will be fine in a month, it's temporary, it's not that serious, we'll take care of it later..."

It can be tempting to take the ills from which one's business suffers lightly. Admittedly, sometimes problems are secondary, but in any case, you will always be a winner by tackling the difficulties that can potentially jeopardize your business.

A problem that is not taken seriously enough is a problem that is usually dealt with superficially. Do not hide your face and accept the facts, you will have done part of the work to get out of it!

Statement of expenditure

To save a company in difficulty, you must necessarily go through the flattening of your expenses. At first, the ideal is to take all the expenses you have paid, then put them in order by categorizing them in a summary table.

In addition to centralizing your data, it will allow you to see more clearly later when you try to identify abnormal charges. Start from your bank statements, or export the data from your management software if you have one.

If you're having trouble visualizing how you can create your categories, here are some examples you can rely on:

  • Salaries (employees, temporary workers, interns if you take on any)
  • Purchases from suppliers (take into account any payment terms you may have benefited from)
  • Service providers (accountant, lawyer, management consultant, etc.)
  • Subscriptions (Internet & mobile telephony, professional software)
  • Reimbursement of interest to the bank (in the case of an authorized overdraft or credit)
  • Expenses related to marketing / communication actions (advertising on Google or social networks, fairs, brochures, etc.)
  • Taxes and charges
  • Expenses related to your premises (rent, electricity, water, gas or oil if you use it)
  • Various insurance (car, premises, etc.)
  • VAT to be paid (if necessary)

Flatten your cash inflows

Now do the same for the recipes. Create a second pane and away you go. Rely on the invoices that you have entered in your estimate software, and put yourself in mind of any competition or subsidy endowments. For once, here are some tips that may help you go faster:

  • Customer billing
  • Subsidies, competitions won...
  • Possible VAT credit

Once you are done with this phase, you will be able to analyze these figures in more depth: unpaid bills, waste, exorbitant prices. You may find elements that will give you a hint. We will come back later.

Keep the head up

Watching your creation falter is never easy. And you may have already considered giving up, resolved to accept your failure.

But what if instead of moping around in negative thoughts, you tried to be positive?

Easier said than done, of course. But if you manage to maintain this passion that drives you and the conviction that your business will pull through, you will see that your hard work will increase tenfold. If you think your business is bankrupt, know that all is not lost, far from it.

Also tell yourself that error is an excellent teacher! The process of questioning is certainly painful but so saving. Knowing how to recognize the faults that fall on you, you will come out stronger.

By learning from your mistakes, your business will emerge stronger and you will be better prepared to face future challenges.

Finally, smile, you are filmed! Employees, partners and bankers pay great attention to the image you send back. By showing that you are confident and that obstacles are there to be overcome, you will have a positive influence on the people you meet on a daily basis.

Surround yourself well

An involved entrepreneur may be tempted to want to settle everything on his own and take all the responsibilities on himself. One of the first steps to take to turn around a company in financial difficulty is to call on outside people who can help you on specific points. 

In addition to freeing up your time to focus on what you know how to do best, these third parties will help you take a step back. Chartered accountant to help you get your cash management back on track. Business management consultants to regain a global view of your business and improve your profitability.

But if this task seems too complicated and you are afraid of making the company's situation worse, you can always call on interim management.

This consists of letting an experienced leader take the reins of your activity for a fixed period of time. Because of his extensive experience, he will be able to easily identify the issues and problems of your business and then put in place concrete actions to raise the bar.

However, if this solution is generally very effective, it is relatively expensive, which can be prohibitive in certain cases.

Identify problems and their causes

In order to get out of the crisis that is disrupting your activity, you must know precisely the nature of the problems: financial, human, organizational, etc.

But that's not enough, you can imagine. If you detect that your company is experiencing cash flow problems, you must go back to the disruptive element (or elements): sales too low, customers paying late, charges too high. In short, everything that could put your business in jeopardy.

If you have already flattened the incoming and outgoing items, analyzing them to determine anomalies can be very fruitful. Your last 4 months have been prosperous thanks to new customers but you do not find this increase in your income? Then it may be that you have overdue bills. Or that this extra money is swallowed up in excessive charges, which do not allow you to reach your break-even point.

In either case, you have to follow the trail to the end: who are these customers whose payments I expect? Where do these abnormally high expenses come from? So how to make it stop?

You can also try to make the exercise more enjoyable by thinking of a detective investigation. Following the criminal's trail by collecting clues that will allow you to arrest him can be more stimulating than "looking for errors in a 200-line financial table"!

Do not hesitate to carry out an internal audit of the company. By analyzing all the key points of your activity, you are almost certain to detect problems. You can ask for help from employees of your company to support you in this mission: they will surely have a different vision from yours and will potentially be able to identify malfunctions that you would not have noticed.

But if you are afraid of missing too many elements, do not hesitate to ask for an external audit of the company: in this context, professionals in the field will intervene directly to analyze in depth and highlight the points that you are lacking.

Highlight the strengths of the company

Don't see everything in black! If the problems are real, your company also has strengths, that's undeniable. Lean on what works well, and use it to bounce back better.

Know-how transmitted from generation to generation, advantageous location or efficient customer service, try to list the recovery possibilities that your assets can help.

A powerful strategic analysis tool exists to better visualize these points: it is the SWOT matrix. It comes in the form of a rectangular table separated into 4 large boxes.

S = Forces (Strengths)

W= Weaknesses

O = Opportunities

T = Threats

Strengths and weaknesses relate to what is internal to the company (organization, sales, market share, differentiating factors), while opportunities and threats affect the ecosystem in which the company operates (market, competition, news, jurisdiction).

The idea is therefore to list as many relevant elements as possible, as you will have understood. Try to actively reflect on the strengths of your activity, they will allow you to have concrete positive elements to exploit

Don't neglect this tool! It will be useful to you regularly, so do not hesitate to update it regularly.

Turning around a company in difficulty requires concrete actions

Reduce unnecessary costs. It is definitely something that you have to be told over and over again. Problem: it's anything but obvious and it can quickly become annoying. What you want is to get out of the crisis and develop yourself! And we understand you.

Good news, you can focus on costs that are unnecessary or too high compared to what they should be by helping you with your disbursement analyses. Here are the important points on which you can act:

  1. Suppliers first. By renegotiating contracts to your advantage, you can reduce your costs significantly, especially if you tend to buy in large quantities. If, on the other hand, the discussion does not lead to anything, do not hesitate to put your suppliers in competition and to compare the different contenders to find the one that suits you best.
  2. Similarly, you can try to establish or join a purchasing group: generally the reductions are significant and this may allow you to make new partners.
  3. Turning around a struggling business can also be done through going paperless, relying instead on online methods. Instead of letters, you can send e-mails or newsletters, instead of printing all your invoices, it would be possible to collect them in a single space. If you were planning to print hundreds of flyers, why not invest in online marketing?
  4. Another often overlooked point is to review the paid tools that your business subscribes to. In some cases, you will find that you are being charged way too much for your use of any tool. Similarly, you can favor "open source" (free software, at least temporarily) in order to limit your costs without having too much impact on the operation of the company.
  5. War on waste. Lights on all night, heating on full load when the windows are open, neglected equipment. All these little elements may seem trivial, but in fact they nibble away at your savings like a mouse in a Swiss cheese. Once again, base yourself on the analysis of your invoices and if some seem too expensive to you, try to find out why.
  6. Optimize the payroll You must surely think that you will still be advised to reduce your workforce. Well not at all! This is an option that you may (and unfortunately) have to consider, but you should already be aware of it.

Here, optimization relies on the participation of your employees (and yourself). The idea is to get everyone to contribute by setting up an idea box, for example. By inviting employees to put inside their good ideas to increase productivity, reduce costs, you will have several brains thinking about your problem, at least from time to time. And if you want to explore the idea, why not collect ideas once a month and give a small gift to the person who has had the best idea!

Turn around a struggling business through marketing

It sometimes happens to see a company in financial difficulty because the sales volume is insufficient, for no apparent reason: interesting products or services, good production efficiency, very relevant main target. Lack of a sufficiently developed marketing strategy.

You have to make your prospects want to take the plunge and buy. As for your customers, you must not leave them hungry, in which case they may lose interest in you to go eyeing the competition.

To avoid this, you will therefore have to develop a marketing strategy. Done well, it will allow you to be more in tune with your customers and therefore increase your sales.

You can ask yourself a few questions in order to move forward on this issue if it is a problem for you:

What does my clients want? What is their need?

For example, if she is looking for friendliness and status, what you offer should be done to meet this need. Take Michel and Augustin, for example. They produce consumer cookies and non-alcoholic beverages. They fully understood that their customers were looking for these elements, so they did everything to get as close to them as possible. "Packaging" fun both by its design and the little jokes that can be found everywhere. 

Communication very focused on proximity by telling the adventures of the founders through social networks for example. And on the other hand, there are quality ingredients that allow them to charge fairly high prices to their main target, young workers with purchasing power.

  • What are the best channels for promoting my products/services? If my main target is teenagers for example, how can I best interact with them? What are the channels that will allow me to have the most impact on them? Social networks? Newspapers? Television? Fairs?
  • What are the goals that I set for myself and what are the tools that will allow me to achieve them?
  • Speaking of goals, set achievable milestones early on. It is useless to hope to increase the company's sales by 300% in one week. The marketing approach should help you revive your business, not make it sink.
  • Similarly, many free or inexpensive solutions exist on the internet. It's up to you to choose the ones that suit you best.
  • Thereafter, attach great importance to the results of your strategy. You will be able to identify if you have hit the bullseye or if you still need to adjust certain points.

Don't be afraid of change

If change can scare many leaders, it's because they generally feel better in their comfort zone and don't want to take too many risks.

But if you're reading this article, it's probably because you're looking for answers. And saving a business sometimes requires necessary changes.

"Okay, that's all well and good, but WHAT exactly am I changing?"

Several options are available to you, of which here are two examples:

  1. Change the positioning of your business. If you were in a monopoly situation for years, it is possible that new entrants have since eaten away at your market share with services or products that are better suited to your target. Is the market saturated? So instead of being stubborn, if you study another approach? Perhaps a more upscale image would allow you to fit into a market where there is more demand and less competition.
  2. Innovate to reign better. Having trouble keeping your place or getting one? So you have to differentiate yourself! And there is no question of reinventing hot water, we hear! Perhaps by observing the needs of your customers, you will find a particular point to improve to make your product immediately more attractive. Better, if you manage to create this need, sales are likely to explode!

Are you still in the red? Is the situation becoming untenable? There are last resort solutions!

The ad hoc mandate

The first is the [Ad Hoc mandate]"All about the ad hoc mandate"): in broad outline, it is an amicable safeguard procedure open to companies in difficulty.

The operation is as follows: you will be able (as a debtor) to request from a commercial or high court that you be assigned a person who will help you identify and resolve the company's difficulties in a confidential manner. (as far as possible). This person is called the ad hoc agent.

The receivership

The second option is receivership: it can be put in place if you find yourself in a situation of cessation of payment. You can request it yourself, but be aware that it can also be imposed on you by a creditor.

The principle is quite simple: during a first phase, your company will be analyzed and observed to identify any malfunctions. Thereafter, you will have to put in place an action plan over a limited period in order to purify your cash flow of unpaid debts and therefore be able to relaunch your business at the end of the whole procedure.


Saving a company in difficulty is possible! Indeed, it's not a piece of cake and the road will sometimes be long and painful, but don't give up. If you follow the approach proposed throughout this article, you will end up finding the problems that are undermining your business and better still, solutions that will allow you to sleep well again! And if you don't think you can do it alone, don't hesitate to ask professionals who are experts in this field.

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