So you’re thinking about buying a turnaround business. The big question is - how do you turn it into a profitable, thriving business? Here are some steps that you can take to plan out your path to success.
Figure out what is going wrong.
- Meet with key personnel and ask them what they think is going wrong.
- Consider getting feedback from customers on their satisfaction level.
- Work in every aspect of the company and identify areas for improvement.
- Ask tons of questions, and don’t be afraid to hire a business consultant to analyze operations.
Find ways to reduce costs.
- Identify where money is being lost and develop solutions to stop the “bleeding.”
- Cut any unnecessary costs; consider canceling contracts that are causing the business to lose money.
- While letting employees go should not be a first step, you still want to consider employee productivity and make sure that you’re only retaining those that are actively working to make the company improve and succeed.
- If the business is on a lease, consider downsizing the space or re-negotiating rates.
Write a business plan.
- Assess the brand - does it still have the power to drive sales, or does it need to be re-invigorated?
- Is the company selling what customers actually want?
- Can you find new sources of revenue to increase cash flow?
- Can you identify any missed opportunities?
Write a marketing plan.
- Narrow the the marketing efforts to focus on the top marketing avenues that are actually showing a return on investment (ROI).
- Stop spending money on marketing that isn’t showing results.
- Identify marketing opportunities that are simple to implement.
- For example, does the company have a website or social media presence? Can you find them easily by searching online or on popular reviewing apps? Many of these items can be implemented for free or at a very low cost, and will give the business a much broader advertising reach.
Write an operations plan.
- Assess the company’s operations. Can they deliver products as promised and keep up with demand? Are there workflows in place to handle increased demand once sales begin to increase?
- Is the company operating efficiently, or are there changes that can be made (even small ones) to increase productivity?
- Set realistic goals for your top priorities, and focus on small changes for 10% increases in productivity, as big changes tend to require more investment up front.
Focus on people.
- Invest in a team of people that are driven to make the company a success.
- Foster open lines of communication and encourage employees to present solutions.
- Share your vision of success with your team and inspire them to be invested in it with you.
- Make sure your team knows the plan and how to implement it.
Having a plan is vital to turning a struggling business around. When looking at turnaround businesses for sale, think of these factors and see if you can determine missed opportunities, ways to improve, and costs that could be cut or reduced. These can indicate that you have found an excellent opportunity to revitalize a business. Being successful at turning around a distressed business can be extremely rewarding - what’s holding you back?
Rachael Holstein has been the Marketing Manager for Transworld - Rocky Mountain since 2016. Her work experience has been largely focused on business development and marketing in business brokerage, finance, architecture, property management, and information technology. A long time resident of Cleveland, Ohio, she attained her undergrad from John Carroll University and her Master’s Degree from Cleveland State University. In 2013, she relocated to Denver with her husband, Joe, and her furry companions to explore the mile high lifestyle!