It is not enough to be merely satisfied with your successes – there needs to a sense of urgency, as the company employees must continually push themselves to create the best product or service and release it before the competition does. Even when a company is doing well, management should encourage employees to push themselves so that they become empowered and excited, thereby resulting in higher productivity.

There are different methods for creating a sense of urgency with your employees, which again is a business strategy that will keep your company ahead of its competitors.

First, everyday you and your employees should be proactive. Whether it’s in meetings or material in memos, there should be a visible sense of urgency so that everyone knows to get to work and not delay their duties.

Next, you, or someone on your staff, should always look for outside information. Data, videos and even websites from outside the company can help drive company urgency. For example, if you go to a competitor’s website and learn that they are developing a certain product, your company now has a mission to create a better product.

It will also help to remove obstacles to people’s work. Suppose there is an informal policy about water cooler conversations and that people are allowed to stand around the water cooler without being productive. In this case, it’s time for management to step up and change policy so that employees are no longer complacent, as they often are around those surroundings.

You can even be innovative and reward proactive workers. This business strategy of urgency will help your company stay sharp, find opportunities where they weren’t seen before, and create the drive to succeed. Urgency is the opposite of complacency– this is the business strategy of winners.
Try this suggestion to create a sense of urgency

Share information – When you share information on common business goals such as sales, cost reduction goals, and or new product information with other employees and key decision makers you begin to create unity. When you do this, you will begin to get others involved and moving in the same direction creating a sense of urgency as well as increased work performance.

So get together at least once a month and have others share information on where you stand in terms of achieving sales goals, creating and launching new products or services, and lowering costs. The more realistic and specific the information and goals the better in creating urgency.

This blog list is not all inclusive.

List below other ways to create and maintain urgency among others.

Step 1 – Stop the Bleeding

Stopping the bleeding from negative losses and other valuable resources is the first thing to plug when focusing on a turnaround. Increasing revenues won’t fix anything until the losses have been stopped because increasing sales costs money, sometimes lots of it. You won’t be able to effectively focus on building your future let alone surviving until you knock down expenses.

Three areas to cut losses from are the following:

1. Operating Expenses - This is a big one. Operating expenses often make up the biggest expense for businesses. So focus on cutting utilities, products and services purchased monthly expenses, loans, rent, and outside services to free up cash.

2. Labor (Time) – Labor often makes up the next biggest area for businesses to focus on cutting. It’s been said that close to 30% of the work done in a business is repetitive and doesn’t add value to the customer. Learning to increase productivity by eliminating unnecessary tasks, consolidating activities, and using technology to lower labor costs can help eliminate overtime therefore making a more efficient and productive set of employees.

3. Advertising/Marketing – Businesses often overspend and waste money in advertising and marketing that doesn’t directly bring in prospects or make sales. Image advertising is a perfect example. Ad agencies don’t care about results rather just how pretty ads are. Your marketing should always sell something whether it’s a phone call, a meeting with the prospect, or a brochure. Remember that advertising is selling in print.

Step 2 – Find The Problem

Once you stockpile valuable cash and time, the next step is to figure out where the problem is. What part of your business is still profitable? What part is not? A good turnaround plan requires that you focus and build on what produces positive cash flow and cut what doesn’t. It’s not rocket science.

Here are three tips:

1. List Your Products/Services – Make a list (yes you have to do some work) of all the products you sell by their margin price from the largest price to the smallest.

2. Stop selling everything that isn’t brining in positive cash flow – This will bring significant changes. For example 70% of your products may still be profitable and the other 30% not, eliminating the weaker part will provide a stronger business. Focus on building your strengths not your weaknesses.

3. Narrow Your Focus – You can’t be everything to everyone. Learn to differentiate your product or service and then put that message in all your advertising/marketing.

Step 3 – Approach Creditors

Any turnaround plan will involve going to your creditors with a plan. The best way to approach them is to be honest. Telling them you won’t pay them won’t exactly get them on your side. Instead, explain to them that you are having trouble paying bills and explain why. You then want to show them your plan. Most of the creditors will accept an honest effort. They know they won’t get paid if you go broke. They do want to see a willingness on your part to do what needs to be done so show them your cost reduction plan as well as your new marketing strategy.

You then need to prioritize your creditors and suppliers. Not all creditors are the same. The first group are the ones who play an integral part in your business and are the ones you will want to pay first. These are the people you need to impress. Bring out that suit you only wear on special occasions.

The second group of creditors are the ones who are not a priority and you should make every attempt possible to get out of those debts.

Step 4 – Refocus Your Company

Now that you effectively cut the dead weight from your business in terms of slashing operating expenses, eliminating unproductive labor, advertising, and all unprofitable business operations, you are ready to refocus your company on your profitable areas.

Turnarounds are easier than you think if you follow these principals and have a blueprint to follow.

Click Here

to get a complete step-by-step turnaround program that walks you through the entire process of lowering, supplies, labor, and advertising costs.

Did I miss something? List any other relevant turnaround tips or strategies below.

Among other things, consultants help their clients, usually companies, realize and then achieve certain goals. They help increase the number of customers and improve customer satisfaction. They claim to help define or redefine a company’s goals and increase employee motivation and work performance. Consultants assist in coaching employees and improve an organization’s operational needs. By and large, consultants exist to help institute cost reduction measures – this is their bread and butter, so to speak.

While consultants may appear helpful, however, there also some potential drawbacks.

First, consultant groups can be very expensive, which appears to contradict their being hired to institute cost reduction methods. Depending on the number of man hours, their bills can quickly and easily add up to the thousands, and this can be very costly to companies that do not have such capital simply lying around or are experiencing tough times.

Second, despite their claims otherwise, consultants may not be helpful for cost reduction, and it is up to you, as the company owner, to determine if these groups are worth the investment.

• What are they really going to do for you and your business?
• How will this increase profits?
• Are they just regurgitating obvious information that is simply packaged well?
• How much investment will this require?
• Can you do it yourself?
• What can they offer that makes them worthwhile?

These are important questions that can result in the spending or saving of thousands of dollars, if not more. As a company owner, you must determine what is in the best interests of the company and what is simply unnecessary. Perhaps specialized consultants for a narrow area would be more helpful than groups that are there simply to help initiate layoffs.  In addition, often times they will only make recommendations which you will then have to implement yourself further costing you time, money, and resources.

It is almost ironic that consultants, who are often hired for cutting costs, may themselves be a cost that ought to be cut, and you must be proactive in determining their necessity.  Consultants can delay decisions as well as puts them in their hands.  Often times, you as well as your managers know more about your business than outsiders.

So try these tips

• Put the consultant’s pay on a performance basis.  This will will save you lots of money.  If goals and objectives aren’t met, no pay.
• Most of the times consultants bill hours and use your employee’s knowledge.  Learn to use template based consulting where the employees do most of the work and then hire a consultant just to manage the process.  This can often cut your consulting fees in half and makes more sense.

By following the guidelines in this blog, you can often eliminate, if not cut in half you annual consulting expenses in half.  If your interested in a cost reduction blueprint click here .

Below, list any suggestions or tips on how to further lower consulting costs.

Well you start to turn things around that’s what you do.

But how do you turn things around?

Well you start with your people. Traditional business turnarounds take 6 to 12 months but you won’t need that long if you follow a proven turnaround strategy. And it won’t even cost you an arm and a leg.

First let’s briefly it on three studies:

•The U.S. Department of Labor released a study that states the number one reason people leave a company is because they don’t feel appreciated or valued.

•Over 5 years of experiments performed at a major power plant proved that the largest impact on increased productivity was the simple act of paying attention to their employees.

•The Gallup organization has documented research from over 2,000 employees that shows that 69% “prefer” praise and recognition from their managers over money.

Are you seeing a pattern here? Good.

Positive praise, appreciation, and recognition are one of the most effective ways to boost employee productivity (it can be and is more effective than money, and free too).

When you praise someone and recognize them for a success or achievement, it doesn’t take 6 months for them to receive the benefit from the praise and you don’t have to wait a week or for a check to clear, or a procedure to change.

They get it instantly!

The results are just as quick as they immediately feel good and their productivity improves. You have to remember employees take a natural pride in their job and the work they do. And simply put, at the end of the day they just want to be recognized for doing a job well done.

While the goal of this blog is to talk about small business turnarounds, the quickest way to do it is through your employees. Everything starts with your people.

So why not boost productivity during the recovery stage of a recession and get a leg up on your competition? The best way to do this is to positively praise and recognize employee performance.

Job satisfaction is at an all time low and productivity is sagging too. Here are 4 ways to effectively use praise and recognition to boost productivity.

1. It has to be True- no one likes hearing something good when they know it isn’t true. And don’t think for one minute that they don’t be able to tell. Be sincere. People know the difference.

2. It has to be Personalized- It’s important to make things personal and when it comes to praise it means a few things. For one make sure you figure out what forms of praise are more effective for your employees. Some will want the whole world to know about their accomplishment, while public praise would scare someone else. Learn what’s effective and make it personal.

3. It should be Specific- “Good Job” doesn’t really say much does it? “Good job getting those reports out on time during one of our busiest days ever. We couldn’t have done it without you”. That’s a little more specific. Be clear. Be specific.

4. It should be Weekly- Studies show that productivity reaches it peak when employees are praised at least once a week. Make yourself a chart, but don’t make it routine or something you have to force yourself to do. Make it sincere

If you’re taking the time to read this I personally want to comment and point out your ability to want to go to a new level as well as take the time to learn how to effectively boost employee morale the positive way.

If you take action on this advice, you’re in a league of your own. We need more people like you in a time like this. A+.

Now that you’ve been recognized for doing something excellent, who are you going to pass it onto? And When?

Remember to hire the best people you can afford and then rehire them every week.

Think Long-Term

Business turnaround plans may have quick results but you must adhere to them for the long-run; otherwise, you will return to poor cash flow, missed payments, and other problem areas you had faced prior to your business turnaround plan’s inception.

Within your forecasts, you should have a time line of expected financial growth. You must maintain that forecast and make certain amends to repair any divergences. It doesn’t matter if you are less profitable than you intended – figure out where the plan went wrong and then amend it with precision so that you can reach your original forecasts.

The business turnaround can be flexible in this instance; however, if you ignore the fact that you are not hitting your targets, then you may wind up with other crises down the line. You must execute your plan closely but with the understanding that some flexibility may be required.

Be Realistic

A successful business owner needs to be realistic and practical and must be aware of when it is appropriate to keep the business, to expand it, or even to sell it. Should your business turnaround plan be successful, you will have likely learned from your previous mistakes and the financial picture will be brighter for you company’s finances.

It is possible your revenue will go down during the first few months of your turnaround plan, yet you will be more profitable due to your business’ reorganization. This positive cash flow will build on itself until a point where your revenue grows high enough for you to consider expanding or selling.

Be Prepared for Expansion

Should you consider expanding the company, it may behoove you to build another business turnaround plan, albeit different in nature. This time, you have a thriving practice; however, a smart business owner knows that expansion can be a logistical nightmare and must be done with a controlled and well-thought plan. You may have to talk to your creditors again and cut some of your debts. You may have to look into your company’s finances and once again flesh out any problem areas you may have.

This may be a different kind of business turnaround, one where you are already a profitable company, yet you still owe it to your firm to be as methodical and practical as you were before. Your business turnaround plan worked once, it should work again.

Finally, you may be ready to sell your company. In this situation, you need not burden yourself with another business turnaround plan, but rather investigate who would be an interested buyer and what would be a reasonable price. Of course, a business turnaround plan may still be in order so that your company is even more desirable to would-be buyers. It all depends on your present finances, your need to sell, and your willingness to once again go through this reorganization process.

Be Forthcoming with Creditors

The goal of creditors is simply to make back their investments in some form, and they understand that this objective may not be reached should you be overly burdened with their debts. If you provide current updates on your business turnaround plan and methods for turning your company around, then they will be more apt to help you on your way or at least alleviate some of your burdens. Business turnaround plans often depend on creditor concessions.

For your business to become profitable, your creditors may have to make certain concessions and financial sacrifices or else their investment may go sour. However, you must look at the situation from their perspective. If they don’t receive any information about your company’s financial well being, forecasts and benefits of turnaround plans, then they may not put their full trust in you and they may refuse these concessions. That is why an open and honest relationship with your creditors is so key, which your business turnaround plan should note.

Show your books. Prove how extending certain loans or forgoing some debts will result in their receiving back their investment. Keep them regularly updated. Make your own concessions in order to appease your creditors. A business turnaround depends on this open and trusting relationship – it is very unlikely that you will achieve financial success otherwise.

Prioritize your Creditors

That is not to say that all creditors are the same. The reality of business turnaround plans is that you will have to prioritize your creditors and sort out which ones are important to your business. If they don’t like your business turnaround plan, then everyone loses; thus, your business turnaround plan will require that you choose which creditors get paid and which will not.

You must separate creditors into two groups, the former of which include individuals and companies integral to your business. Those are the people you need to impress, to share your plan with, and to have an honest relationship. You should personally meet with these specific creditors and sell them your business turnaround plan. Be honest and show them how they will be repaid.

The people and firms in the second group, however, are simply not a priority and you should make every attempt to get out of those debts – hiring a debt negotiator is a common practice for such situations. It is very important that you separate these firms and people into the two groups, and you must act carefully. Before you potentially end a relationship with a creditor whose business isn’t essential and thus whose loan isn’t a priority, you must be absolutely sure that you can negotiate a good settlement.

Keep the Goal in Mind

The goal is redeveloping your business so your company becomes profitable again. Additionally, most firms price in the chance of their debts being vitiated; in other words, this is a practice that companies understand, expect, and factor in with their prices.

Sales may be down because a new competitor has entered the market or there is an economic downturn that is preventing your customers from being able to afford your goods. Research may show that your company has too much inventory – perhaps you made some unwise decisions and increased your costs far more than your profits would allow. Maybe your profit margins have declined whereas your fixed costs remain stable. There are an endless number of reasons why your company has financial problems, and you must discover the root cause or else there will be no significant business turnaround.

The Value of Comparative Analysis

To discover the root cause of your company’s problems, you should first try to isolate the cause or causes by a comparative financial analysis, which is often important for business turnarounds. With such an analysis, you will be able to compare other companies to yours.

In seeking a business turnaround, a good owner will look at websites such as http://www.bizstats.com and look at how other companies, including competitors, are doing. Sites like this allow the users to easily navigate through a great deal of relevant information about similar companies, so that a business owner can see which companies are doing well and which are not. If other companies in your industry are doing poorly, then the issue may have something to do with your industry itself. In that case, you will have to figure out how to bypass the issue and differentiate yourself from your competition so that your company can stand out.

Consider Outside Help

It is also possible that the comparative financial analysis will show your company is doing poorly compared to others, and thus the problems are specific to your firm. As a company owner seeking a positive business turnaround, you must then look to your own company and conduct your own investigation as to what the problem is. You may want to consider hiring outside consultants or other groups to help establish the root cause of your firm’s problems.

Such organizations exist for this very reason – they want to ensure that companies such as yours are working in optimal conditions and as efficiently as possible. Business turnarounds often result from outside help, as these third parties can investigate your firm, its staff, your products, and uncover the reason for your financial troubles.

Get Personally Involved

Finally, a good business turnaround plan depends on a proactive and intelligent owner. You cannot only depend on comparative financial analyses and outside consultants – you must take matters into your own hands and investigate the problem yourself. Proactively research other businesses, investigate your own employees, monitor and analyze financial reports, and determine why the market is not responding to your product.

While a company owner understandably has to allocate certain tasks to his employees or other parties, this is a situation where you also have to be more involved in your company than before, at least until the root causes of your issues are uncovered.

Each month, both my mom and my dad analyze and write checks for the monthly bills together. It’s sweet and I guess could be romantic if you love accounting and crunching numbers.

Maybe one day when I’m married, my future wife will want to know and be personally involved in knowing where and how much we spend each month and what amount of this spending is unnecessary and can be cut. Hopefully she will be the frugal brunette type.

Reviewing every monthly business expense can actually uncover valuable information.

If you’re going through a business turnaround, it’s vital if you’re a business owner or CEO to pick a month or two and personally sign and review all the checks your company writes that month.

You’re probably saying to yourself “Thayne I don’t have time for that kind of that stuff” or “My accountant does a good job taking care of that task, that’s why I pay them the big bucks”.

Signing the checks yourself will more than likely open up your eyes and throw up many red flags and provide you with adequate cost reduction opportunities necessary during a business turnaround. In fact, the money you can save will more than likely surprise you.

For example, when you write the checks yourself you will often personally discover how much you are paying (or overpaying) for a particular product or service. Also, you might find yourself signing several checks for products and services that may not even be needed at all.

Think about that.

If you discover a payment that you find questionable, don’t be afraid to have someone verify and defend why you’re paying that expense. If it’s a good valid reason pay it. If it’s not, withhold your signature.

But chances are you won’t see these types of unnecessary spending when someone else writes the checks for you so here’s your assignment. Pick a month to personally review all payments and checks your company writes and make it a personal goal to try and write your name less that month and every month thereafter.

Haven’t you heard stingy is in?

Conserving cash is vital during a business turnaround and smart cost reduction gets you get there quickly. So personally review all spending and sign checks yourself. Drop unnecessary spending like a bad habit.

The next time I take a girl out on a date, I may just see if she will consider spending the evening helping me balance and review my bank statements looking for cost reduction opportunities.

In reality, I’ll probably just take her to dinner and a movie and end up overpaying for both but that’s another story.

Maintain a Positive Cash Balance

The best way to maintain a positive cash balance is by spending no more than what you start with at the beginning of the week. In other words, if you start the week with $10,000 and collect an additional $5,000 by the Friday of that week, then you should not spend more than the original $10,000. This budget will keep your company alive as you will not have negative equity after the week ends. Managing your cash is the single most important facet of building a stable environment.

Budgets and Forecasts

Following a smart budget is absolutely integral to a good business turnaround, but there are other methods used to build a stable environment. A good business knows how to make proper forecasts. You must be able to estimate sales by talking to customers about anticipated future transactions. You should evaluate your staffing, inventory and supply orders to ensure they are worth your investment. A good business turnaround also depends on your looking for inventory that is not on the books or otherwise hidden in your business.

Evaluate the Competition

In stabilizing one’s environment, which again is absolutely essential to a strong business turnaround, you must look at similar businesses that you can model after or even purchase should it be in your best interests. Not only should you monitor your weaker competitors, but your sales team must also look into the possibility of wooing their best business partners, customers, and even employees, if there is an advantage in doing so.

So, a good business turnaround may depend on your ability to recognize an opportunity to acquire other, less healthy competitors should it be economically advisable. Having a strong client base and weak competition are two ingredients for creating a stable environment, and in doing so you will establish a positive cash balance. Otherwise, your business may face the kind of serious debt from which it is impossible to recover.

Monitor your Staff

There are other means of forming a stable environment within your company. You must closely monitor your staff and ensure they are doing their job. If, for example, you have a controller who is inefficient or careless with cash management, you need to respond. A controller is supposed to control the cash, and must share some of the responsibility for an unstable environment.

Business turnarounds are only as effective as the people who utilize it. If you want your company to succeed, you must be prepared to let go of individuals who either are not doing their job or doing it poorly. You must also maintain good communication with your employees on a regular basis. This builds trust and loyalty- assets that will strengthen and unify your company culture.

Positive cash management involves every facet of your business. To achieve a business turnaround, it is essential to take into account your budget and spending, as well have accurate forecasts to work with. Your knowledge of your competitors and good staff management also contribute to your ability to create positive cash flow.

Identify Assets and Liabilities

A good business turnaround plan would have you determine how your profitable core is composed and which products or services are the biggest money losers. A business turnaround requires you to focus on the good, as the products or services that are the foundation of your company should be maintained and given far more attention than your company’s weaker elements.

Once you have determined what products or services are money makers or money losers, you should use your best products or services as the foundation of your reorganized business – this is key for a business turnaround plan. This may not result in any significant changes; for example, if 90% of your business is profitable and the other 10% not, then eliminating the weaker elements will likely not fundamentally change the nature of your business.

However, if 20% of your business is profitable and the rest not, then this will be a serious reorganization that will likely change the very nature of your company. In this situation, you would have to discard inventory, facilities and perhaps even let go of people associated with the unprofitable components of your company. A good business turnaround plan requires that you focus on what produces positive cash flow and discard what doesn’t.

There is no economic reason to maintain the divisions of your company that do not generate positive capital. They are a drain on your resources and on the parts of your company that do make money. A business turnaround plan must include the changes necessary to make your company profitable, focus on what works, and discard or at least make significant alterations to the rest.

Take Cost Reduction Measures

Of course, there are other changes you can make for your business to become more profitable. Not only do you need to reorganize your business around its profitable core, but also you should look into how best to cut costs, which your business turnaround plan should discuss. Wages, supplies, inventory, and rent are the four biggest costs a company faces, and they understandably cut into a company’s profits. Regarding wages, it may be to your advantage to institute a wages freeze in order to save on costs.

You may have a fixed rate for supplies and other inventory; however, there may be a way to renegotiate those contracts to a lower rate or even begin looking for another supplier with lower costs. Finally, the rent you pay for a building can be negotiable should you realize that its simply too high, or above fair market value, or you can find another building in another location for a lower price.

Business turnaround plans only work if your company becomes profitable, and sometimes you have to cut your own costs rather than sell more product or services to make that happen. If you really want to increase your profit margins, then you must take all of these factors into consideration. After all, lower costs equal higher profits.