Understanding business restructuring & turnaround
Constantly changing customer trends, shifting market conditions and increases in competition can all have a negative effect on a business’s performance, and make restructuring a necessity. A business restructure is driven by a need for organisational (employees) and business model changes (altering the business’s processes). A financial restructure may also be necessary to make changes to the company’s balance sheet.
A company may decide to restructure for a number of reasons, but typically always with the goal of ‘turning around’ the company to become more profitable. The reasons a company may decide to restructure can include:
- Reducing costs
- Focusing on higher-performing products
- Improving the company’s competitive advantage
- Merging with another company
- Consolidating debt
- Merging employee roles to increase efficiency
- Creating additional employee roles to increase productivity.
In order for companies to remain successful, regular examinations of the business’s structure should be common practice. By inspecting the company’s performance, key decisions can be made to turnaround the company or take the business to the next level.
There are several ways we can give a struggling business a stronger future
Our experienced team of business professionals can provide ‘hands-on’ advice in the following areas:
Strategic Advice & Planning
Sometimes businesses lose their way through an ineffective business plan, or unforseen changes such as directors resigning and taking their leadership with them. We can help restore a plan for your business and get it heading in the right direction.
Financial & Operational Restructuring
Our accounting and leadership professionals evaluate your current situation and provide advice that could turn your business around. Sometimes the smallest changes can make a significant difference.
Cash Flow & Working Capital Management
We can provide professional advice about how to manage your cash flow during business difficulties, and help you with access to more working capital to turn your company around fast. Our team of accountants and financial specialists will put you back on track.
Why is restructuring the right choice?
Choosing to restructure your company can be the right course of action for a number of reasons.
If, after conducting a thorough and honest assessment of the company’s performance, it is found that many of the company’s processes are overly complex, the decision to restructure the business should be made.
These complex processes can include the roles and responsibilities of managers, the way the business processes orders, and the general day-to-day running of the company — including specific rules and authorisations required by key personnel to complete operational tasks.
A restructure seeks to streamline and optimise the company’s processes to improve profit margins and to make the business more efficient. However, a common mistake that many businesses make is waiting too long to implement the restructure. This delay can limit the options available to turnaround the company, and can increase the risk of the business failing.
If the company is quick to identify major inefficiencies and acts swiftly, the business may end up creating more value from the restructuring process.
We can help turn your business around
At Australian Debt Solvers we help businesses around Australia get back on track.
We conduct thorough financial and operational evaluations in order to implement the plan to get your business heading in the right direction and creating a stronger future for your company. Our in-house team of experienced business professionals will provide you with hands-on advice to formulate a strategy to proceed with an operational and financial restructuring.
At Australian Debt Solvers we understand that the restructuring process can be a stressful experience for you, and for key stakeholders within the company. Therefore, our focus is on ensuring the process runs as smoothly as possible and communication remains open and honest.
And a business restructure and turnaround doesn’t have to cost you tens-of-thousands of dollars in administration fees. Australian Debt Solvers has a team of accounting, leadership, and business professionals in-house to ensure the service we provide is cost-effective and time-efficient. This helps us to keep your costs down and it also means you only have to talk with one organisation.
Help for a Distraught Director and Accountant
Australian Debt Solvers were extremely competent and spent a great deal of time answering our questions. Everything was set out clearly and in a helpful manner with easy to understand instructions. Advice was given with the greatest consideration. I would strongly recommend them to anyone who needs help with company liquidation.
They answered every question we asked within a very short space of time. Nothing was too much trouble and they were very understanding – knowing how hard it is for a business to come to this decision.
I have told other Accountants about the great service they provide.
Keeping a profitable business, after the Court had appointed a Liquidator
We spoke to ADS after our company had already been wound up by the courts. We wanted the assets from the liquidated business, but didn’t know how to get them. We called Debt Solvers and they took care of everything….they got an “Authority to Act” from us, spoke to Deloittes who were the Liquidator, negotiated the sale of the assets, set up a new company for us…….and we are now going from strength to strength. Money was well spent with ADS!
Gary & Jo, UFIF Engineering
Turning around a company that owed too much to the Tax Office
Our company is a Medical recruitment agency with mostly Government based clients. We had a good sales forecast……but were heavily weighed down with debt, mostly from the ATO. I met with Debt Solvers….when I thought I was going to lose the business. They talked me through Voluntary Administration where you offer creditors a reduced amount, and you pay the reduced debt over 12 months – which is called a Deed of Company Arrangement. Our creditors agreed on the offer, and we have gone from strength to strength. ADS even organised a Debtor Finance company to assist with our cashflow at a reasonable rate. Considering I thought we were going to lose the business – an great result!
Shaun, Beat Medical
We’ve helped thousands of Australian Business Directors with the Lowest Price Liquidations in Australia!
Australian Debt Solvers takes up to 10 enquiries per day from Australian Companies that have debt issues. A lot of these have under $100,000 of unsecured debt, with no company assets, and simply need to close the company down. Debt Solvers does this for a fair price, efficiently and with empathy for the Director. It’s a service that has proven extremely useful for Directors, right across Australia.
A low cost Voluntary Administration service to get companies back on their feet
Australian Debt Solvers hears from a lot of Directors, where there company could be profitable and trading well, but they are being tied down by too much debt – of which the majority is usually the ATO. We have worked through with hundreds of companies – a Voluntary Administration – where we negotiate and reduced amount of debt to creditors over usually a 12-24 month period. This is called a Deed of Company Arrangement….and is an extremely effective method of assisting companies to “get back on their feet”. Debt Solvers charges a fair price through this process…….and it’s great to see a business go from strength to strength after this service.
Blows competition out of the water
Firstly Dave showed compassion when the other liquidator was very impersonal. Secondly Australian Debt Solvers are helpful – there was stuff Dave didn’t have to tell me as he is just dealing with our company not our personal affairs. However he answered all my questions which makes it easier and gives me a lot more confidence that we are not breaching rules as we wind down. Thirdly, the fee is so much cheaper than a traditional insolvency practice. So far I am very impressed with Australian Debt Solvers. I will post another review once we have completed the process.
Restructuring & Turnaround FAQs
What is business restructuring?
Business restructuring is defined as the reorganisation of a company. A restructure is performed to increase the business’s profitability, streamline the business’s operational processes, and adapting the business model to account for potential changes in the market such as consumer trends and other economic factors.
After a thorough and accurate assessment of the company’s current processes is completed, a restructuring should be implemented within a reasonable timeframe. A common mistake is that businesses wait too long to implement changes — wasting precious time and decreasing the chances of a successful business restructure.
The purpose of a restructure is to make the company more competitive and re-enter the market with more efficient ways of doing business.
Contact us today on 1300 789 499 for a free, no obligation consultation.
What are the different types of business restructures?
When it comes to restructuring your business and identifying where improvements in efficiencies can be made, it’s down to the thorough assessment of the company’s processes as to which business restructure will be implemented.
The common types of restructuring are:
- Financial restructure — this is a change to a company’s capital structure such as a debt restructuring to allow a firm that is experienced financial difficulties to continue operating.
- Merger and acquisition restructure — the process of integrating two companies together.
- Turnaround restructure — this involves restructuring the administration, products, and/or the operations of a poor-performing company. The appointment of new leadership often takes place in a turnaround.
- Repositioning restructure — this is designed to move a business into a new operational model that is in line with market trends.
- Cost restructuring — this is the process of cutting operational and administrative costs in a response to a current or forecasted downturn in revenue.
- Divestment restructure — this is the process of closing a business that is unprofitable or a drain on resources.
- Legal restructure — this is the process of changing the legal structure of a company.
A business restructuring can also be a combination of any one of the above types. Click here for our guide to completing a successful business restructuring.
What happens to employees in a business restructure?
If a thorough and honest assessment is made and the conclusion is that specific employees and management teams are the reason behind the company’s difficulties, then these employees and manager roles may be disestablished. Poor staff training and disinterested management can be a critical factor in whether or not a company has a strong future and if a restructure is successful.
However, the type of business restructure that is implemented will affect employees in different ways. In many cases, a business’s employees are not the issue and the restructure may help key stakeholders to do their jobs more efficiently.
At Australian Debt Solvers we understand that business restructures can be a stressful time for all concerned. That is why we aim to make the restructuring process run as smoothly as possible while keeping communication clear and transparent.
What are the tax implications of a business restructure?
A business restructure may have tax implications depending on the type of restructure your business implements.
If your company changes its business entity type then your current tax situation may need to be reassessed.
The Australian Tax Office (ATO) offers the example, “You may change your business entity type from a trust to a company, introduce additional entities, or reorganise your existing group. You may need to restructure for reasons such as asset protection, introduction of new business partners or changes in your business model. Tax policies and procedures may not explicitly cover restructures. It is good practice to adopt tax policies for group restructures long before they occur.”
In these circumstances it is strongly advised that you seek advice from the business and financial experts at Australian Debt Solvers.
Click here to read our guide on how to conduct a successful business restructure.
OUR KEY CREDENTIALS
- In-house ASIC Registered Liquidators, Administrators and Receivers
- CPA and CA Qualified Accountants
- ARITA (Restructuring & Turnaround Association) memberships in-house
- Over 40 staff
- Offices in Sydney, Melbourne, Perth, Brisbane, Gold Coast, Adelaide, Townsville and Darwin
- One of Australia’s fastest growing insolvency firms
- Dedicated enquiry team with 24/7 service
- National legal network and expertise
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