Today’s uncertain economic conditions mean that under-performing companies without a sustainable profit trajectory are difficult to sell. If a business is only marginally profitable or loss making, selling the business will be challenging and may risk going into receivership without any further injection of cash. Given that banks are unlikely to lend to a troubled business, the most likely scenario is that you, the business owner, will have to inject your personal funds to keep the business afloat.
To respond to the growing list of companies who are unable to return to profitability or sell their business, we have partnered with a leading London based turnaround specialist to provide both turnaround support and/or funding to stabilise and resurrect your business. We can help business owners resolve urgent situations and drive rapid change in order to ensure that the business remains viable before the selling process commences. Our approach is to help provide the experience, knowledge and capabilities to drive results which can mean the difference between insolvency and a successful restructuring/sale.
Click here for a timeline to turnaround your business.
Reasons why it is worth bringing interim turnaround managers and/or seeking additional funding:-
- Maximises the value of the company through “new management” and injection of funding
- Improves relationship and access to credit with lenders and suppliers. Banks and trade creditors will positively view the additional injection of cash and turnaround management expertise
- Ensures that the business remains solvent/viable and therefore preserves your reputation in the market and employment of staff
- Our turnaround partner has turned around other businesses and knows “what levers to pull” to maximise the chances of recovery. Experience suggests that most turnarounds will require rapid operational, financial and legal restructuring to fully recover.
- You remain in control. In return for turnaround support and/or funding, our partner will take a minority equity stake in your business. Unlike most turnaround professionals who take a cash-based fee for their services, our partner aligns their interests with you by taking a minority equity stake. If you don’t want to give up any equity, we can discuss other forms of compensation where there is sufficient alignment of interests.
- You don’t pay anything for this service to Stirling. However, we ask that once you have returned to profitability and are ready to sell a healthy business, you agree to consider Stirling to market your business for sale. But ONLY if you want to sell!
Here is how the process would typically work:
- You contact us for an initial discussion so that we can understand whether it is better to sell your business today or if you need to turnaround your business to maximise the sale value of the business.
- If it is worth restructuring your business prior to sale, we will introduce you to our turnaround partner. You can have a free, confidential discussion with them about the key issues in the business, financial performance, funding challenges and where you need help. Our turnaround partner only needs to know your sector and approximate turnover/profitability details i.e. they do not need to know the name of your company. This discussion can last anywhere from 1-3 hours and at the end of the discussion, they will provide a view on whether they can turnaround the business (this is critical because they don’t gain anything if they can’t return the business to profitability).
- If you feel comfortable with the initial discussion, our turnaround partner will sign a non-disclosure agreement and have a second round of discussions with you in more detail (most likely at your premises). This will further solidify the turnaround strategy, help you assess whether you can work with them and agree on the right level of minority equity participation (this could range from 5% to 30% from historic experience) or other forms of compensation.
- If you are happy with the terms of their offer, you sign an agreement that outlines what they will do, how you’ll work together to make decisions, how long the turnaround is expected to take, etc. Please note that you are not committed or obligated to engage our turnaround partner’s support or funding until this stage. Also, there are no fees or costs to you for any initial advice you may get from our turnaround partner. However, we ask that you don’t waste their time if you are not serious about bringing external turnaround support or funding – otherwise, it is not the most productive use of everyone’s time.
We have seen many struggling companies perish without the right management support/funding and it is worth giving your business a fighting chance to succeed and sell at a much higher valuation in the future.
To find out more, please contact Roger Smith direct for a free confidential discussion on 077 71-95 7166 to discuss the possibility of turning around your business with a view to a future successful sale.
