Are there any benefits of the small business restructuring process? The Small Business Administration (SBA) offers many benefits of the process. The process can be much easier and less costly than traditional formal corporate insolvency proceedings and has already been described as a blend between commercial insolvency and safe haven administration. Unlike traditional corporate insolvency, directors retain greater control over their business after the process has finished. This article briefly covers the benefits of the small business restructuring process.
One benefit of the small business restructuring process that can immediately impact the day to day operation of your business is the creation of an effective workable business plan. The business plan provides direction for your business through the term of service of your company. When completing your business plan, you should identify all key aspects of your business and include those that will most directly impact your employees, suppliers and customers. This plan will in effect become your roadmap to success.
The creation of a business strategy also becomes essential as part of your business plan. Your business strategy should address two major issues; one being health care and the second being growth and marketing. Health care issues may include expansion and/or acquisitions of current companies. Growth issues may relate to sales, employee and capital budgeting, and/or marketing initiatives. You should work closely with a Certified Management Accountant or a Certified Public Accountant to help you create your business strategy and to assist you with implementation.
Another benefit of the small business restructuring process is the creation of an effective management team. The formation of a management team is an important part of the business turnaround. Most business owners fail to recognize the importance of effectively developing and retaining strong management teams. These same owners often hire too many consultants and the businesses often collapse. In most cases small business owners fail to realize the importance of hiring qualified management personnel and/or they overbook their management teams, both of which cost the company valuable time and money.
One benefit of restructuring plans is the creation of a strategic planning and operational direction plan. In addition to having an overview of the day to day activities of your company, your strategic plan will also help to outline the goals and objectives of your business. It will also identify your target customer and detail strategies that will be necessary for meeting these needs. Many small businesses have not been successful because they do not understand who their target audience is. Often times, many business owners have no idea what kind of products or services they are offering to their potential customers.
Benefits of the restructuring of financial obligations include the ability to focus on core business activities. This means less financial stress on the company’s leadership and employees and frees up cash for other things. Another benefit is the creation of a more flexible workforce by hiring individuals who are capable of performing multiple tasks. Most small businesses have a staff of approximately twenty-five individuals. The increased productivity in fewer individuals and shorter work days will improve profitability. Also, small businesses are less susceptible to costly human resource problems such as absenteeism, tardiness and on-the-job injuries.
Benefits of the restructuring of financial obligations include the ability to better fund the business, reducing the need for outside financing. Often times small business owners are unable to obtain loans from traditional sources because of credit issues or poor personal or business financial management. Often times restructuring companies will provide business owners access to lines of credit, which can be used to fund start-up and marketing expenses.
Benefits of the small business restructuring process include the creation of a comprehensive marketing plan, the reduction of monthly operating costs, the establishment of a long-term financial plan and an effective succession plan. These steps are designed to maximize the profitability of a company and reduce the company’s risk. A business owner should consider all of these benefits of the small business restructuring process before deciding whether or not to complete the restructuring. Most business owners find that their businesses improve when they refocus on their goals and vision. In many cases, the benefits of the restructuring process will allow a business owner to take control of his or her financial future.