When the market suffers an unpredictable downturn, it is often the small businesses who tend to suffer most. There are also times when a company is just struggling to make money and their whole operation has become stagnant. Whatever the circumstance, there is never a bad time to assess your business and restructure your organisation if necessary.
What Does Restructuring Entail?
Restructuring your business means changing your strategy because your financial or operational systems aren’t working effectively enough. Companies choose to restructure their business for a wide variety of reasons, some can involve changing how they conduct daily operations, while others focus solely on the financial elements.
Main Reasons to Restructure a Business
As mentioned previously, companies choose to reorganise their companies for a number of reasons, here are some of them.
- A high majority of cases concerning restructuring involved companies looking to downsize their operations. The company may be letting go of a large portion of employees, making them redundant, once these employees have left the organisation the business will need to change its strategy if it is to continue making money.
- A company may also get rid of certain departments due to outsourcing or downsizing. Either way, the current structure they have in place won’t work effectively once the new policies come into place.
- A business owner may wish to re-evaluate their operations if they feel like their business is in decline, the best way of doing this is to hire an experienced lawyer to assess the company’s operations.
- Another reason to restructure a business is to clear debt, to manage debt effectively you’ll need help from a professional business lawyer.
Consult with a Professional Advisor
A professional insolvency practitioner such as Michael Chamberlain will be able to help you with restructuring your enterprise. Experienced business lawyers know exactly how to assess your company and devise a plan to get you to where you want to be as a business owner.
They’ll assess every aspect of your business and design a strategy which is uniquely created to assist your company. Most first-class business lawyers know that the two main elements that need to be addressed when restructuring are financial and operational.
As a company director, you may feel overwhelmed when facing a complete restructure, if you’ve no idea where to start, seeking professional advice is highly beneficial. Companies who provide professional business services can provide direction, support and strategic implementation.
Advantages of Restructuring
If your business is in the process of downsizing during a restructuring phase, it can significantly decrease your operational costs. For instance, if the company dismisses some of their employees their payroll expenses will be lower. New technology may be introduced which drastically lowers operational costs.
You must consider your investors if you are running a small business, if you encounter problems and you need to restructure your company, it sends a positive message out to shareholders. If you don’t appropriate measures in place like hiring a professional consultant, you may lose vital funding and your business could go bust.