- providing pathways for struggling businesses and assisting in times of crisis by discussing a range of options to potentially avoid failure;
- helping businesses embrace risk by taking calculated decisions, consider financing options and encouraging investment strategies; and
- assisting in accelerating the next generation of innovative and high performing Australian businesses.
Operational Restructuring, Turnaround and Renewal
Our turnaround practitioners enter with a fresh perspective and act with complete objectivity and integrity.
Turnaround practitioners identify root causes of problems that may not be visible to insiders or their existing advisors. There are multiple ways in which a turnaround practitioner can be engaged, for example:
- Short notice appointment as interim manager (or interim c-level positions) in times of crisis;
- Engagement as an advisor for informal workouts, recapitalisation and debt negotiations or for safe harbour implementation and supervision;
- Acting as a 'sounding board' for ongoing risk management advice where management have a strong 'risk appetite' and growth ambitions (including non-executive board appointments).
Like doctors in an emergency room, turnaround practitioners make critical decisions and move quickly to staunch the financial bleeding and give patients the best chance for revival and recovery. Leadership and change management are fundamental in achieving a successful turnaround.
As certified members of the Turnaround Management Association, our practitioners are qualified and experienced in strategic management, accounting & law for turnaround.
Upon engagement, solutions are implemented immediately to put in place control measures.
Turnaround Practitioners look beyond the immediately obvious options and tailor the advice such that it is given from holistic and strategic viewpoint and encompasses multiple potential dimensions of risk.
Turnaround Practitioners - Stabilising Operations
Our Turnaround Practitioners provide operational advice. We are not limited to giving financial advice where a business is facing cash flow difficulties. Our Turnaround Practitioners' advice extends to tackling any form of crisis
that a business might encounter. This could include the decision making process in high risk scenario planning.
Turnaround Practitioners' engagements ideally commence prior to cashflow difficulties. Operating in times of crisis, Turnaround Practitioners diagnose the root cause rather than focusing on cash flow alone (which is a 'symptom', not the cause).
Public awareness of a business's insolvency is well recognised as significantly devaluing the goodwill and assets. Of significance is the ability for turnaround practitioners to avoid the stigma of having to use a formal insolvency regime - the publicity and disruption caused by the voluntary administration procedure may be terminal for an SME. This enables turnaround practitioners to preserve goodwill and business operations to the maximum extent possible.
Harnessing Industry Experience
Whilst a turnaround practitioner's experience within a particular industry is important, their experience in making effective and calculated decisions in crisis situations is absolutely paramount.
Tapping into management's industry experience and combining this with an external industry expert can often be the ideal solution for building turnaround strategies.
As members of the Australian Institute of Company Directors (AICD), we have access to an appropriately experienced pool of industry experts who are available to assist in executing strategies in times of crisis.
Crisis Management, Business Fortification and Transformation
Recognising the early signs of distress and intervention by directors when they arise remains the ideal approach for sustainability in any business. However, as technology evolves it's becoming more clear that restructuring is likely to become the new 'norm' in the coming years regardless of whether your business is distressed or not. By the time the notion of insolvency is even remotely considered, it may be too late.
All businesses should be poised to tackle potential performance issues by taking steps which create an environment that allows employees to understand, embody and deliver upon the overall objectives.
In order to maintain high performance and competitive advantage, businesses must remain vigilant to significant change, external market forces and disruption. This can be achieved by building a culture of risk management, process innovation and strategic awareness.
Insolvency Regimes - The Last Resort
Appointing a registered liquidator should be the last resort - however, should this be deemed a useful approach, our turnaround practitioners can guide business owners through the insolvency processes used.
Turnaround practitioners are a powerful resource for navigating the formal insolvency and external administration regimes.
We hold strong professional relationships with registered liquidators and trustees in bankruptcy as well as financiers, secured lenders and government departments - this ideally places us to advise you in every aspect and across the spectrum. As a trusted advisor, we act as your sounding board throughout.
Shifting Landscape - Embracing a Rescue Culture
The Government has long sought bring about a system to facilitate successful restructures outside of formal insolvency. There has been a strong push towards a change in policy by professional bodies, professionals and the business community for many years.
There are just over 1,200 voluntary administrations each year with roughly 1/3 of those entering a deed of company arrangement which may be used to restructure or (more likely) to sell the business or its assets.
Empirical research suggests that unsecured creditor returns for deeds of company arrangement are less than 6c in the dollar on a weighted average basis.
In December 2015, the government launched the National Innovation and Science Agenda, a landmark new plan to capitalise on the nation's strengths and turn Australia into an innovation leader.
The Australian insolvent trading provision encourages directors to put businesses to the sword even where there may be prospects for future prosperity.
An effective culture of corporate rescue requires a number of key elements, including cooperation of major stakeholders…
It is important that struggling businesses are not put to a premature death because of an unwillingness of company directors to expose themselves to personal liability.
- The earlier help is sought, the more options that are available to help rescue, turnaround or preserve the value of a business. However, the worst thing that can be done is to approach an unqualified, inexperienced and/or uninsured advisor.
- Unfortunately there are dodgy 'pre-insolvency' advisors that prey on distressed individuals and often recommend illegal business phoenixing. In addition to their 'so-called advice' resulting in dire consequences, the regulators are in the midst of a crackdown to eliminate these advisors and their professional accomplices.
- However, the doorway is wide open for legitimate business rescue. Directors, officers and owners may now contemplate rescue early in the business cycle (before the crisis becomes a cash flow or compliance issue).
Business rescue is a legitimate use of the corporate form and we will work with those in this category to provide education and advice.
Safe Harbour protects directors from personal liability for insolvent trading.
This legislative reform is designed to give directors breathing space. Click here for more detailed information.
Operating in the eye of the storm, a turnaround practitioner is adept at dealing equitably with stubborn stakeholders, angry creditors, frightened employees, wary customers and a cautious board of directors.
Turnaround Practitioners - Focus on Crisis Management & Turnaround (not limited to financial difficulties)
Remember that cashflow difficulties, financial woes and resultant insolvency are the symptoms of an underlying problem - engage a Turnaround Practitioner early to help treat the root cause and maximise the chances of preserving the business's goodwill, asset values and key employees.
Take action & make contact
If you are in need of advice regarding your business, please contact us ASAP for a free confidential consultation.