Bank of Scotland has free guidance on turnarounds in ebook for SMEs
It was Albert Einstein who once said: ‘In the midst of every crisis, lies great opportunity’.
While the coronavirus pandemic may not have created the forces that are currently driving change in the global economy, it has certainly turbo charged them.
It came at a time when the world was already experiencing permanent and profound change driven by new technologies, changing customer demands and the transition to a low carbon economy.
As the worst impacts of the pandemic recede, it’s an exciting time for businesses to invest in the future, especially with interest rates at historic lows and massive Government stimulus to achieve net-zero emissions.
But the pandemic means many businesses are starting from a position of some stress, having built up debt, depleted working capital and deferred obligations to stakeholders.
The Bank of England estimates that around a third of the UK’s small businesses are now highly indebted, with debts more than 10 times their cash balances – a figure that’s more than doubled since the start of the pandemic.
That doesn’t mean these opportunities are out of reach, but it will require radical change and renewal to make the most of them.
It’s put a renewed focus on turnarounds as ever more businesses seek to first stabilise, then adapt and find their place in the new economy.
Do it by the book
It’s likely that a business will only go through a turnaround once, so firms are unlikely to have all the in-house expertise and experience they need.
So, we’ve rallied a range of turnaround contributors, specialising in everything from finance to restructuring, Human Resources, Environmental, Social and Governance, marketing, communications, sustainability, law and productivity.
They have come together to author a new ebook called Turnarounds: Seizing new opportunities – which explores what turnaround means and the types of support available to you.
They have proven track records advising companies of all shapes and sizes through times of crisis, so their guidance is hard earned and worth listening to.
The comprehensive guide is available to download for free now, and the guidance set out isn’t just theoretical, it’s focused on practical steps to help firms manage the turnaround process and beyond.
The book is split into two main sections that reflect the natural priorities of the turnaround process: stabilisation and growth.
Strong and stable
Stabilisation starts with a thorough and pragmatic review of the problems a business is facing, the underlying issues and the potential new opportunities.
It’s only when armed with this information that they can make the right decisions rapidly and in the right order.
That’s why my colleague Senior Credit Officer David Bates has contributed a chapter on the difficult questions that need to be asked and the short-term measures that can buy firms the time they need to develop a longer-term strategy.
Here, David lays out exactly what Directors’ duties are through the turnaround process and explores how to build and manage a team that can successfully navigate a turnaround.
Often, a turnaround will involve working with external advisors, so we’ve also connected with Nick Winks, founder of turnaround specialist WayPoint Change, to explain exactly what a turnaround practitioner can bring to the table.
And Nigel Lake, founder of strategic and financial advisory firm Pottinger, has contributed a chapter on the financial restructuring options available, as well as laying out a path to action that gives businesses the best chance of survival.
Ultimately, not every business will be able to trade its way out of its current troubles, so we’ve also included a section on navigating the insolvency process, including restructuring, administration and liquidation.
Whatever route a business takes to recovery, it’s vital to take partners on that journey, so we’ve also dedicated a chapter to building stakeholder support and crisis communications.
Going for growth
It’s important to look beyond the immediate crisis and seek out opportunities to grow.
New technologies are enabling transformational new business models, so there’s an easy-to-read overview of the key trends in the new economy, from industry 4.0 to the internet of things.
My Bank of Scotland colleagues have also created an in-depth chapter on building financial resilience, with a focus on managing and improving the working capital cycle, the financial products that can help firms do that and a section on mitigating supply chain risk that is particularly pertinent at the moment.
And there’s an introduction to the capital and strategic support that partnering with a private equity investor can bring from John Garner, Managing Partner at LDC, midmarket private equity firm.
My colleagues Glenn Bemment, Head of ESG, SME & Mid Corporate, and Gary Lapthorn, Head of Sustainability and Responsible Business explain how sustainability can open up new avenues for growth and cost savings, as well as a sustainability checklist to get firms started on their sustainability journey.
And the book also explores how businesses can be transformed through digitalisation, including guidance on how to develop a digital strategy, the new technologies enabling increased efficiency and the potential to introduce automation.
A window of opportunity
We’re going through a once-in-a-century shift that will have a profound impact on the world of work for the next hundred years.
Firms now face a limited window of opportunity to find their place and thrive in the new economy and I’m sure our ebook will be a valuable tool as they navigate the future.
But they don’t have to go it alone; there’s plenty of help available, including from the team at Bank of Scotland.
We know it’s been a challenging time, and we’re playing our part in helping Britain recover by supporting as many businesses as possible.
Download the full Turnarounds: Seizing new opportunities ebook for free now here.