Is business in trouble? A few signs & some pro-active steps

Some thoughts for businesses that may not be receiving optimum performance financially, operationally or through ineffective leadership and management:

What are some signs that a business may be faltering?

• loss of market share
• declining economic conditions 
• management turn-over
• poor internal culture
• ineffective processes and procedures
• weak capital structure; excessive debt
• significant outstanding accounts payable
• litigation
• uncontrolled costs
• poor inventory management
• outdated tools and equipment
• declining condition of buildings, property, plants

Some ways to assess the situation:

• review financials and benchmark against others in the industry
• review operational and financial performance, procedures and processes
• assess the leadership potential and past performance
• review short and long term strategies, goals and directives
• review footprint for manufacture, distribution and sales

Some proactive steps that can be taken:

• engage financial and legal consultants to assist with the analysis and identification of proper courses of action
• revise short and long term strategies, goals and directives
• tighten operational performance
• assess inventory management to increase turn-over
• assess manufacturing processes to cut costs
• re-evaluate distribution footprint
• consolidate distribution or manufacturing channels
• re-negotiate outstanding debt through repayment agreements; forbearance agreements
• liquidate non-performing divisions and/or outdated / unused business collateral
• tighten accounts receivable efforts; initiate collection actions if necessary
• focus on profitability, pricing and return on assets
• revise internal controls and compensation plans

Strengthening a company's financial and operational performance includes legally protecting the company from creditor claims, employee claims, customer claims, other third party claims as well as preventing unintended violations of federal, state, local or industry specific laws, rules, regulations, certifications, licenses, etc.  It is imperative for a lawyer to assist with the assessment and pro-active steps above not only to protect the company but to provide legal tools that the company can use to pro-actively pursue aging accounts receivable, trademark or patent infringers, suppliers of defective goods and services, etc.

Working hand-in-hand with the right financial and legal advisers can mean a return to better economic times and growth!