Future-Proof Your Business: Strategic Restructuring Options for Business Owners
With 25 September 2020 just around the corner, it is now more important than ever that business owners pause and take stock to carefully consider what the next 12 months of trading might look like for their business.
In March 2020, the Federal Government introduced the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) which was designed to provide temporary relief to businesses and stimulate economic activity. Among the incentives and temporary measures initiated by the Federal Government, many business owners have subsequently been able to:
- Defer repayments owing on business loans, mortgages and other finance facilities;
- Access rent waivers and rent deferrals from landlords;
- Access significant cash flow stimulus and wage subsidies;
- Access six (6) months of stimulus under the Jobkeeper program;
- Obtain temporary relief and an extension to comply with statutory demands from 21 days to six (6) months; and
- Take advantage of the temporary easing of insolvent trading laws.
Whilst these temporary measures have had their desired effect, this has however, created an artificial economic environment for many businesses, which has left many business owners awash with cash and a false sense of business performance.
As the temporary relief begins to wind back from 25 September 2020, the month of August should serve as an opportune time for business owners to take stock and ensure they are preparing their business for the next phase of the recovery cycle.
EARLY INTERVENTION IS KEY
As businesses slowly begin to be weaned off the Federal Government’s various stimulus packages, it is critical that business owners now use the month of August to:
- Revisit historical performance of the business and consider the financial impacts from the withdrawal of any previously relied upon stimulus;
- Carefully assess the business’ financial position and identify the levers and key drivers of financial performance (i.e. billable hours, inventory levels, occupancy rates);
- Revisit the business’ forecasts and cash flow assumptions and ensure the revised projections are reflective of the current operating structure of the business;
- Explore profit optimisation strategies and consider resizing the cost base of the business (where practicable);
- Develop liquidity forecasts and investigate cash flow improvement strategies available to the business (i.e. changes in trading terms);
- Conduct customer segmentation and profitability analysis and ensure the business remains focussed on its core target market; and
- Develop strategies to maximise revenue, streamline processes and optimise the cost structure of the business.
Businesses facing challenging operating conditions should seek prompt, specialist advice to reduce the risks and consequences of financial failure and increase the options available to the business.
WHERE GT ADVISORY & CONSULTING CAN ASSIST
During times of business distress, we work alongside directors and management teams to manage the financial pressures on the organisation and develop strategies that maximise value for stakeholders.
Our restructuring strategies are designed to equip directors and management teams with the information they need to make informed business decisions which maximise value for stakeholders and give businesses their best chance of survival.
Through our proactive and hands-on approach, we:
- Work with management to explore potential turnaround and business improvement strategies;
- Consider the organisation’s strategic business units, key products and services, key staff, suppliers and customers and explore possible divestment and wind-down strategies;
- Provide advice to assist management execute value-maximising restructures; and
- Where necessary, assist management prepare the business for a formal insolvency procedure which may involve implementing mechanisms to minimise disruption to the operations of the business.
Operating within the confines of a strict legal and regulatory framework, we provide decision makers with carefully considered advice so that strategies can be executed with confidence.
We work with underperforming businesses and businesses facing financial distress to formulate turnaround and business improvement strategies which are designed to refocus strategic direction and return businesses to profitability.
As an agile advisory firm, we are able to assist management by:
- Assessing the business’ financial position and identifying the levers and key drivers of financial performance;
- Developing liquidity forecasts and advising on cash flow improvement strategies;
- Conducting customer segmentation and profitability analysis; and
- Developing strategies to maximise revenue, streamline processes and optimise the cost structure of the business.
We take the time to properly understand the business and provide management with the necessary tools to drive financial turnaround and restore business value.
We work with businesses across all stages of the business life-cycle to help assess, plan and manage significant commercial decisions.
We work with business owners to develop strategies which optimise performance by improving processes and efficiencies within the organisation and refocussing the business’ strategic direction on revenue maximising activities.
We utilise our investigative analysis to understand the drivers of financial performance, assess efficiencies and processes within the business and undertake customer segmentation and profitability analysis.
Through a carefully considered approach, we provide businesses with the information necessary to execute smart business decisions.
GT Advisory & Consulting specialises in insolvency and business recovery, including assisting companies with the corporate insolvency processes such as voluntary administration and liquidation, and helping individuals with the personal insolvency process, which can include applying for bankruptcy or facilitating a formal offer to creditors through a personal insolvency agreement.
Insolvency is a complex area of accounting where an understanding of effective strategies is essential for achieving the best outcomes. At GT Advisory & Consulting, we have the specialist expertise that is required when dealing with distressed assets, individuals and businesses. We deliver commercial and innovative solutions on each engagement, working with all stakeholders to clearly understand objectives and to implement a strategy that will maximise returns and achieve the best possible outcome for all parties. While we are working at all times to protect creditors’ interests and maximise realisations, we pride ourselves on delivering a professional service that is forthright and empathetic for all stakeholders.
GT Advisory & Consulting work with businesses across all stages of the business cycle by developing solutions to drive business turnaround, refocus strategic direction and fine tune business performance.
Drawing on our in-depth industry expertise, we develop strategies which assist businesses navigate a diverse range of commercial challenges, by:
- developing in-depth turnaround plans for businesses facing financial uncertainty;
- implementing performance improvement strategies to optimise business profitability and efficiency; and
- where necessary, assist businesses through the corporate insolvency processes such as voluntary administration and liquidation.
For any specific or general queries regarding your business, please get in touch with one of our qualified and experienced experts.
Latest News & Insights
The window of opportunity is slowly closing for directors to explore strategic restructuring options for their businesses.
Surplus Assets are represented by any assets that are held by a business that are not core to its underlying operations and do not support the business in any way.