As discussed in my previous blog, business turnarounds are not easy to achieve but can be accomplished by taking the proper steps and actions. Surprisingly these actions are also those used by owners of healthy companies to run their businesses well.
There are three primary elements for success in a business turnaround.
The first element is avoiding cash surprises. There is nothing more stressful in business than arriving in the morning and being surprised that there is not enough cash. Turnarounds by their nature are cash strapped. It is critical that the business utilize its limited cash resource most effectively. This is achieved by using an operational rolling 13 week cash flow forecast to:
- Prevent cash surprises;
- Allow time to proactively address cash shortfalls;
- Manage cash resources;
- Be less stressed:
- Sleep better.
I have used this tool in the various companies that I have been the CFO and would not think of operating without it. As a partner in CFO 4 Small Biz I create this tool customized for each client. In my next blog I will discuss action two.
Dave Mayo, CPA, CGMA
CFO 4 Small BizTM Founder & Partner