The past year was undoubtedly a highly turbulent one for many businesses, and those in distress may well need to consider a turnaround strategy to get back on track, says Jannie Rossouw, head of Sanlam’s Business Market.
This type of review will typically require an in-depth assessment and should ideally be linked to a review of the annual game plan of the business. “Placing every aspect of a business – down to the smallest detail – under scrutiny, typically helps business owners to improve their business performance, exploit opportunities, identify threats and continually improve market share, volume and profitability,” says Rossouw.
He says a successful business turnaround plan is about reversing decline, restoring stability and getting back onto a growth path. A review should therefore typically include an assessment of the background of the business, including how it was formed, and the role of everyone involved in the business – from the owner through to stakeholders such as employees, family members, customers and suppliers.
“Business owners need to get to the root of the problem and, in the process, review their vision and mission. Critically, the nitty-gritty should be placed under scrutiny – such as cash control issues, the financial and marketing plan, and detailed operational actions.”
This should lead business owners to a forecasting scenario to help predict what impact any changes may have in the short-term and over the longer term.
Rossouw highlights some of the important steps in a business game plan review:
- Revisit your vision, mission and goals and do a SWOT (strengths, weaknesses, opportunities and threats) analysis
- Look back over the past year and record what worked and what didn’t work
- Review your target market and make sure you have in-depth knowledge of your customers
- Assess your products and/or services and match them to your customer needs while reviewing your quality control and your pricing
- Do a competitor analysis to thoroughly understand your competition
- Update your marketing plan to boost your sales and to increase your profit margins, and give your sales plan an overhaul
- Review business trends in your industry to ensure your business stays relevant
- Review your business systems to enable success and sustainability
- Review your technology and find the right solutions for your business
- Evaluate your website, and remember it is a reflection of both you and your business
- Review your customer service, business premises, employees, and management team
- Examine your financial management, cash flow and working capital, and don’t forget about your own personal financial planning
- Ensure that your disaster recovery plan is up to date.
Acknowledging that some businesses may be struggling to the extent that they require more severe intervention to get them back on track, Rossouw says this often places business owners in a classic Catch 22 situation. “On the one hand, they require specialised business turnaround expertise to save their business. But on the other, their financial crisis may prohibit them from hiring expensive turnaround specialists.”
He says the important thing to realise is that there is help out there. “One available resource is a Business Turnaround e-book offered free to business owners by Sanlam. It presents an easy and straightforward framework for turning a business around, and helps business owners to implement the strategies needed to help their business survive over the short term so that it can grow into the future.”
The Sanlam Business Turnaround e-book can be downloaded from Sanlam’s website here: (www.sanlambusinessturnaroundbook.co.za). The Sanlam Annual Business Game Plan for Success e-book can be downloaded here (www.sanlam.co.za/gameplan). For further information, contact Sanlam at 0860 100 359 or e-mail firstname.lastname@example.org.