HAVING THE CORRECT BUSINESS STRUCTURE IS KEY TO BUSINESS SUCCESS.
There are a number of reasons that a business might seek to restructure, but one of the most common reasons is when a company is facing insolvency or its assets are under threat. If this sounds like your situation, don’t panic. We know what to do.
A business restructure refers to the process of reorganising the internal structure of a company to better match its present or future needs. Sometimes referred to as debt restructure, corporate restructure or financial restructure, it is commonly conducted to reflect changes in ownership, a merger or demerger, a significant change to the way the company operates or when faced with financial difficulty and debt.
Essentially, any restructure is conducted with balance in mind. The aim is to ensure that tensions both within the company (for example between relevant stakeholders) and outside of the company (for example with your creditors) are minimised.
WHAT DOES THIS MEAN FOR YOU?
Put simply, a restructure aims to get you back in the black without losing money. One of the ways we can help you to achieve this is through a process called debt restructuring.
This process is different for every company as every financial situation is unique, however it usually involves a reorganisation of your liabilities and negotiations with your creditors to reduce your debt or extend repayment terms. This is a debt solution with a great outcome for all parties as the company in debt can manage cashflow more easily and creditors are more likely to be able to recuperate more of what they are owed.
Debt restructure is a more favourable option than insolvency or liquidation, allowing you to satisfy your creditors and continue to trade.
4 TIPS FOR A SUCCESSFUL RESTRUCTURE
Here are some tips from the team at My Business Path, to make sure a business restructure achieves the outcome you want for your business.
1. Focus on your core activities
When reshaping your business structure, make sure you don’t lose sight of the core products or services that make your company what it is. Often, as pressure mounts due to sudden growth or a need to generate more revenue, a company diversifies its offerings which can cause financial difficulty. Ensure your new business structure is built around your business’ core activities to prevent further financial strain.
2. Keep it simple
You don’t need too fancy or complicated when it comes to creating your new organisational design. The more complex it is, the more room there is for error. Not only that, but complex structures and processes tend to increase the financial burden on your company resources and overwhelm staff.
3. Aim for clarity
Without clear roles and responsibilities for your staff, straight-forward operating procedures and a simple business structure, confusion and ambiguity over duties and responsibilities can quickly become costly to a company and you could find yourself back in financial difficulty.
4. Be flexible
Make sure you have adequate resources to cope with the new structure, especially in the early stages. As you and your staff adapt to their new roles and operating procedures, you will experience teething problems and gaps that need to be addressed. Make sure you’re flexible enough to bridge the gaps and have patience as your team adjusts.
Want to know which structure suits your company?
If you think that business restructure is an avenue you’d like to explore for your business, the restructure specialists at My Business Path are happy to talk through your options in a free consultation.