What's a CRO?

There is help available for business owners in dealing with a business crisis from people who are familiar with this type of situation and who possess the specific experience and skills needed. But there are differing types of help available so it is worth understanding who's who in the world of CROs, IPs, IMs and other professionals you may encounter, some of whom work within your business and some of whom work simply as advisers.

For hands on support the best way to supplement and support a business's existing management team is by appointing a turnaround professional (or 'company doctor') as Chief Restructuring Officer ('CRO').

A CRO's job is firstly to help the business analyse its position, providing an experienced eye to look over how deep the crisis is, assess the options and make an informed judgment as to whether the business is salvageable.

CROs then move on to help to drive through the actions needed to deal with the situation, acting as a crisis manager to handle issues with the urgency, independence and sometimes ruthlessness required. CROs therefore need to be people who can cope with the challenges and difficulties that this implies in a professional way.

The CRO also brings to the business a body of specialist knowledge of relevant commercial and insolvency issues such as redundancy processes and wrongful trading, so helping to manage these risks.

Equally importantly, a CRO also brings to the business their experience of dealing with these types of situation and managing financial stakeholders' interests, as well as their ability to talk to the bank and insolvency advisors their own language, so giving the business the best chance that it will receive funders' support through its difficulties.

The help provided by a CRO is generally therefore extremely 'hands on' in nature. The contrast here is with the professional advisers such as the insolvency practitioner or the lawyer who, however close the relationship, do remain outside the business. The CRO sits on your side of the table at meetings and actively works on behalf of your business, often becoming part of your business by taking on the role and responsibilities of becoming a director to take charge and drive through change for the time needed to make the plan happen.

A CRO should ideally be formally accredited through the Institute for Turnaround as a turnaround professional, and may also be a member of the Turnaround Management Association. They often work alone but increasingly are operating as teams, often in conjunction with or organised through the firms who are also involved in supplying in specialists on a temporary basis known as interim managers to deal with particular functional aspects of the business (such as a temporary finance or production director) as may be required to turn the business' performance around.

But CROs are not the only people that a business will need. As a turnaround affects all areas of the business, so the business tends to need assistance from a broad range of specialists.

If the business is in a severe crisis often formal insolvency advice will be needed at the outset by the directors from either lawyers or an insolvency practitioner (or 'IP') as to whether they are safe to continue trading the business. An IP will be able to advise on use of any of the business rescue procedures under the Insolvency Act such as a Company Voluntary Arrangement; will be able to help the directors in assessing the business's position. They will also often have a strong working relationship with the bank and so may be able to to help gain bank support for a turnaround, as well as introducing or working with a turnaround professional.

Often there is a need to raise new or replacement finance to provide funds to deal with the initial crisis or to support the subsequent recovery and regrowth of the business. These funds will come from specialist asset financiers either directly or more usually through a broker who knows the market and is used to placing such business.

Legal advice is almost always required and the business will need a recovery specialist as a lead advisor who can call upon expertise within his or her firm across a wide range of areas such as insolvency and debt collection in the early stages; through key issues for restructuring a business such as employment and redundancy, as well as contractual disputes such as problem contracts; right through to corporate finance specialists if there is a need to raise new equity or arrange a sale of the business.

The range of flexible resources provided by Interim Managers is also increasingly important as the business will normally require different types of help at different phases of the turnaround. A typical case might require significant assistance from an interim financial controller on tightening up management of its cash to survive an initial crisis. Then the business might need an operations specialist to address manufacturing issues, before then bringing in a marketing expert to provide a boost to regrowing sales, while the whole strategy is overseen by the CRO.

Finding the Right Business Advisors

The job role of business advisors is to help businesses improve their performance by looking into their existing problems and working upon the same by putting into place some definite changes that might turn out to be highly effective. Also, they help businesses decide what would be the best option for them. Business strategy advisors have an important role to play in all types of business.

It does not matter if your business is home based, small or medium-sized, or a large scale organization. When you are facing problems and do not know how to work your way out of them, it is always best to employ the services of business advisors who are both experienced and well versed.

Today, there are business advisors for every business. Right from family business advisors to small business advisors, there are service providers for all types of establishments. In fact, you also have them at international locations offering services to customers all over the world.

Business Advisors - Locating The Right Ones

There are many of them out there claiming to be the best, but you need to be sure that you are appointing the services of one who is actually the best possible. Business development advisors have become so important that every successful business in the world first consults them before taking any major decision.

If you are looking for some business advice, here are some ways to locate good, experienced advisors:

*Ask Around - Sometimes, just to ask around locally, take the advice of friends and family and research a little is the best and easiest thing to do. This could lead you to the perfect counselor for your business.

*Research - Do not just settle for the first business advisor that you come across. Look around and research a bit and do not shy away from putting in a bit of effort. It will definitely pay off once you find the best possible advisor for your establishment.

*Make The Most Of Free Consultations - Most of the professionals out there offer a consultation session or two for free so you can ask any question you may have and try and find out if the advisor you are with right now is the best choice possible or not.

The key to finding the right advisor for your business is to first and foremost know what your own requirements are. That is when you would know for sure what you need from your advisor and work towards finding one.

Looking Overseas - You Do Not Need To Settle For Local!

If you do not find a good enough business advisor in your own city, state or even country, you can always decide to look overseas. That is the best part about this! You do not need to confine yourself and stick to what you can find locally. There are various business advisors who offer their services internationally.

There are very good chances that your needs would be met by an advisor from an overseas location and when that happens, do not step away just because it might turn out to be a little more expensive than usual.

Business advisors can very well be just the thing your business needs to turn around completely and start being what you always wanted it to be. Look around, research and find a good advisor who would take care of all your business issues. It will be a good thing.

Government Business Grant Turnaround Support

Publicly funded support has been readily available for business start ups for many years. But support for businesses in difficulty has usually been much more difficult to find. This article looks at what sources of publicly funded small business financial help exist, and in particular, at government business grant aid for turnaround situations.

There are various forms of publicly funded support for business including schemes such as the old small firms loan guarantee and the current enterprise finance guarantee scheme intended to help businesses borrow from commercial sources; through 'soft' loans and forms of equity investment usually channeled through enterprise agencies and administered on their behalf by local agencies or smaller venture capital firms; and on to grants which are 'sums of money given to an individual or business for a specific project or purpose'.

Grants, free money or time consuming nightmare?

The first thing to say about grants is that while they do not usually cover all of the costs of a project, they do have the great attraction that so long as you adhere to the grant's conditions you do not either have to repay it the way you would with a loan, or have to part with a share of your business to an equity investor.

They are normally given to assist in business development and so are usually linked to either investment in new premises or plant and equipment; or to a particular activity such as training or new product development.

So if grants are so attractive, what are the downsides? Businesses can find that the application process can be long and time consuming as well as a bit of a gamble with no guarantee of success.

Simply identifying the schemes that your business may be eligible for can be difficult given the range of grants available and funders involved from local authorities, Regional Development Agencies, central government and European Union funding, to non-government organizations such as the Prince's Trust, and quangos such as the National Endowment for Science Technology and the Arts (NESTA) or the Carbon Trust; each within their own application process.

Each funder will have its own objectives which will drive the criteria they will want you to meet which can include:

- the size of your business, as some will only be available for micro or small or medium-sized businesses (SMEs)
- your industry, as some schemes will exclude specific sectors while others will be narrowly targeted;
- your location, as designated economic regeneration areas will usually have more generous schemes than other areas; as well as
- your planned use of the funds.

Grants are usually thought of as enabling funding designed to allow a project to go ahead which would not do so if the grant was not available. As a result, very few grants are retrospective (as you have obviously managed to do whatever it is without having the grant in place) so you will need to apply in advance for a grant for your project which can obviously result in a delay in starting if it has to await the outcome of an application.

Again as 'enabling funding' few grants provide the whole finance required for a project so you will generally have to arrange to raise the balance of the funds required elsewhere, and you will often be asked to prove this is in place.

In some situations, such as training grants, you may be allowed to count the cost of your or your staff's time that is contributed towards the project as part of the matching funding 'in kind'.

The grant may also not cover all parts of your project in which case you will need to arrange funding to pay for these parts yourself.

It is important to also bear in mind that even once a grant has been awarded, it still has to be paid which will often be in arrears once you have submitted proof of your expenditure and often payment. You will need to check your project's cash flows carefully to make sure you are able to fund the project until the grant cash actually arrives in your bank account.

Given the level of information that can be required, a grant application may be a time consuming activity. The approval process can also be prolonged, is sometimes subject to the availability of the pot of funds (as they do run out), and it may also require you to make business commitments, such as numbers of jobs or location of premises, that can restrict your ability to make changes to your business.

Against this, the substantial sums that can be raised by way of grants mean that in any large project the prospects of obtaining a grant should be investigated.

Business turnaround grants

Moreover, it's also worth noting that in addition to support for investment in capital projects, some sources of funding can also provide grants in respect of support for salaries and wages over periods of up to two years where jobs have either been secured or saved, which will include turnaround situations and also some business purchases. As a result of the current recession some substantial grants are being made on this basis, on relatively tight timescales as the government is looking to help support sustainable businesses (and the employment they provide).

To access these sorts of schemes businesses should speak to some of the specialist grant advisors who can search the mass of schemes on offer to identify the types and levels of grant for which you may qualify, and then help in managing the application process so as to raise this type of finance as quickly and efficiently as possible.

Of course the information contained in an article like this can never be a full statement of the legal position as the relevant laws are complex and liable to change. This article can only therefore be a general guide as to the issues involved and you should always seek appropriate professional advice on your own particular circumstances before taking any action.

Keeping an Eye Out For Penny Stock Turnaround Situations

When a company is headed in the wrong financial direction and they want to reverse course, this is considered a turnaround situation. A company on this path often doesn't see the light at the end of the tunnel. It may or may not be the company's fault. Outside factors such as an unexpected law suit or increased government regulation could put a strain on cash reserves.

As an investor, you can take advantage of a turnaround situation if you know what to look for. There are opportunities to participate in a turnaround situation that often times are not as drastic as a company heading into bankruptcy. Some turnaround situations rise from short-term events such as a mistake in the direction the company took. As an example, maybe a company opened a new store... only to find out unexpectedly that a major highway was going to be built next to it. The highway project significantly cut down consumer traffic that was very high when the feasibility study was undertaken. Or maybe management just calculated wrong and the store was not profitable. Nonetheless, after investors sell the stock after blaming management, the stock could be sitting at an attractive price.

Some of the best penny stocks are frequently sold off disproportionately to the loss that a company has incurred. A company that has suffered a 20% drop in their earnings will see a greater percentage drop in the stock price than the percentage of earnings it lost. This happens naturally as investors lose faith in the ability of the company to produce profits. But the price of the stock could potentially turn around and recover to its previous price if the company gets back the earnings next quarter.

The problem is that investors sometimes overreact and in turn, overlook the benefits of a negative event. Companies go through different stages in development. If the fundamentals of a company still exist even when it runs into tough times, investors who watch closely often can find a bargain with a company in a turnaround.

Personal Board of Advisors - The CEO's "Trusted Advisor"

Introduction:

Many CEO's and small/medium business owners do not have a Board of Advisors, or Board of Directors to help hold them accountable and direct the business towards the ultimate goal of monetization with an exit strategy. If the business cannot afford a full time CFO, a part time CFO with a broad based business experience can be that "Trusted Advisor". Ideally the CFO who is the "Trusted Advisor" not only has financial experience, but operating experience as well to provide global insight to issues facing the business.

The Value Add:

The CFO who becomes the "Trusted Advisor" to the CEO delivers results-driven, professional counsel and solutions for complex situations. The key benefits for the CEO and the organization having a "Trusted Advisor" include:

o The CEO can think and act like an entrepreneur, focusing on business growth and customers.
o A "Trusted Advisor" who is an accomplished financial/operational executive quickly understands the key issues and can support the CEO, providing alternatives and recommendations to complex problems as part of the decision making process.
o Allows the CEO to think strategically, but provides the additional bandwidth to implement effective tactics.
o Drives the CEO and the business to plan for the long term building annual business plans and three year strategic plans.
o Provides a higher level of analytical support relating the results from operations to the financial statements and explains the variances to budget and the prior year.
o Helps identify key company initiatives on which to focus and in what priority sequence.
o Prepares the CEO and the business for an ultimate exit strategy to monetize the investment
o Provides an external challenge to the CEO's decision-making process, the Trusted Advisor doesn't tell the CEO what they want to hear, but tells them what they need to hear.
o Ensures all perspectives are considered in the decision making process to arrive at the best decision for the business.
o Execute decisions - most businesses in crisis have the common problem of either not making decision on a timely basis or making the wrong decisions.
o Develop and implement operational plans based on the strategy developed in the business plan
o Uses prior broad based industry experience to ensure the marketing, sales, engineering, manufacturing, logistics and human resources are executing according to best practices.
o Provides treasury and capital market support to secure funding alternatives and interfaces with the lenders regarding the performance of the business
o The "Trusted Advisor" becomes the coach, mentor and key confidant of the CEO and the one person the CEO relies on the most for unbiased, straightforward communication.
The Key Benefits of the "Trusted Advisor"
o Sustainability - Business answers from an experienced "Trusted Advisor" provides unbiased, on-target, and unencumbered feedback.
o Accountability - The more accountability the CEO and the business have the better everyone will perform. Without accountability, goals will be missed instead of made. The "Trusted Advisor" provides accountability, measurement, and metrics from the CEO down to ensure goals are more than just wish lists!
o Focus - The CEO gets to focus on the most urgent and important things, so the company produces the results it seeks in its business and strategic plans.
o Trust - The "Trusted Advisor" has developed a relationship of trust with the CEO by demonstrating, credibility, reliability, respect, business acumen and transparency.
o Communication - The CEO and the CFO communicate frequently and openly about all issues impacting the business, with the "Trusted Advisor" providing a safe sounding board for the CEO.
o Networking - The "Trusted Advisor" typically has a network of business contacts that expands the CEO's network and provides the business greater reach in the business community.

Conclusion:

CEO's and owners of small/medium business should have a "Trusted Advisor" with financial and operational experience to supplement their skills and experience. The inclusion of a "Trusted Advisor" to the leadership team enhances the overall capability of the business and is a key component towards the future success of the business.

Saving a Business in Trouble - Business Turnaround Leadership and Strategy

As a business and turn around consultant with over twenty years experience working with numerous small and medium size companies, business turnaround services are some of the favorite work I perform. I enjoy the challenge and helping a troubled company to succeed again. Unfortunately, sometimes the business owner comes to me too late, and the turnaround strategy turns into a cutting losses strategy, often ending in bankruptcy, restructuring, liquidation or a forced fire sale (quick sale). The best advice I can give business owners is to hire an experienced business consultant immediately, no matter the stage of company growth, economic situation or company health situation. A business consultant can proactively help head off future disaster, help to grow the business and provide essential strategic direction. A good business consultant can help a business develop and implement an effective business plan so that turnaround services are never needed.

The important parts of turnaround strategy development and deployment are leadership, experience and expertise. The success of a turnaround plan rests with the people on the turnaround team and their ability and willingness to incorporate all of the company's management team and key employees in the process. It is important to have a process structure which can achieve this. As a business consultant, I understand process, but I also understand the importance of experience and fresh ideas in a turnaround situation. It is the expertise of an experienced consultant who can adapt process to a particular situation in order to find unique, creative, successful solutions to a tough situation, using the strengths and experience of the turnaround team and the insights of company managers and employees, finally putting it all together in an agreed upon, synergistic, effective turnaround strategy, plan and program.

The most important thing a business consultant should do upon entering a turnaround situation is to listen, get to know everyone throughout the organization and give them opportunities and avenues to communicate with the consultant and the CEO. The CEO should be doing the same exact thing alongside the business consultant to instill trust, integrity and openness to the turn around process. If the CEO does not hold a position of high esteem with the employees throughout the organization, it is time for him or her to go and be replaced by either a CEO who specializes in turnaround situations or promote someone from within that has this relationship with the company's people and can adjust quickly to being an effective CEO. With this trust and integrity established, it is time to get to work.

Steps I take as a turnaround consultant include: learn about the business; meet with advisors, creditors, customers and suppliers; evaluate the problems and issues; identify the most pressing and significant problems; identify opportunities; analysis; resource audit; risk assessment; develop the turnaround solutions and the resulting business strategy; acquire and leverage needed resources; deploy with confidence; and obtain and distribute value.

If you follow a similar process and have strong leadership qualities and skills, then, more often than not, the turnaround plan will be successful. However, it isn't always so; sometimes it is too little, too late, depending on the activity and stage of the dire situation. If that is the case, a major re-structuring, quick sale, bankruptcy, liquidation or other end result will become the end game. While this can leave a hollow feeling among the turnaround team, you will find that if a good turnaround process was developed and implemented, yet failed, employees and customers will understand. They will adapt and move on and so should you. Holding on to what "could be" is toxic to any future career or new venture. While many may see this as failure and defeat, as a business consultant, I see this as a learning experience. Something which will not be revisited as owners and employees alike clearly understand, in the end, how they got there. The learning experience is invaluable and should be leveraged into many successes in the future. However, if you follow a good turnaround process, with an experienced turnaround team, the end result will very often lead to success and renewed future growth.

Financial Advisors - How to Build Lasting Client Relationships - 3 Keys

As a financial advisor, one of your key concerns is the quality of your client relationships. (And though this article is written with financial advisors in mind, the principles apply to any business, because all sales--especially in financial services--are built on relationships.)

The higher quality your relationships with clients, the better your practice will fare. How can you build relationships with clients that last a lifetime? Here are three keys:

1. It's not about you. It's about your client. Everything that transpires in the client relationship is about the client's goals, dreams, aspirations. You are the one who is choosing to serve the client in becoming clear about what they want and about how to get there. As a professional, it's not about you, it's all about your client. Make this very clear in your client interactions, that you are there to serve them and get them to their goals and dreams.

Miss this one and many a potential client will walk out your door and never return.
2. Build trust. I cannot emphasize this one too much. Yet, I'm amazed at how many professionals goof on the little things that build trust. For example:

• If you tell your client you will call her with an answer to her question on Monday at 12 noon, you'd better be dialing her number at 11:59 AM. Be OVER-PUNCTUAL.
• If your client meeting is at 4:00 PM, be in place, ready for the meeting at 3:45 PM.
• If your client asks you to call a friend whom they are referring to you, and you say that you'll call that person that day, yet on your way out the door that evening you realize you didn't call the referral, it's time to turn around and go back into your office to fulfill your commitment.

These are the little ways trust builds. Rest assured, clients are watching EVERYTHING, even when you don't think they are.

You want to be so reliable, trust-worthy and committed to your word that your clients can set their watch by you. If you're not like that, tighten up.

3. Under-promise and over-deliver. This was a mantra for us as financial advisors. Under-promise and over-deliver. No one ever gets mad when you do more than you say you will, or when your service wows the clients off their feet. However, if you promise something and don't deliver, that's a problem.

How can you consistently under-promise and over-deliver? One way is by always building in a time buffer for yourself. If you think a project will take 3 days to complete, give yourself 5 days to have it done. If you think you'll have the client's answer by 12 noon, tell them you'll call them by close of business that day. Always giving yourself a buffer of extra time allows you to consistently under-promise and over-deliver.

Hopefully these keys are supportive in helping you build lasting client relationships. Several years after having sold my financial planning practice, many of my clients are good friends to this day. You can experience the same...high quality relationships that last a lifetime.

Government Business Grant Turnaround Support

Publicly funded support has been readily available for business start ups for many years. But support for businesses in difficulty has usually been much more difficult to find. This article looks at what sources of publicly funded small business financial help exist, and in particular, at government business grant aid for turnaround situations.

There are various forms of publicly funded support for business including schemes such as the old small firms loan guarantee and the current enterprise finance guarantee scheme intended to help businesses borrow from commercial sources; through 'soft' loans and forms of equity investment usually channeled through enterprise agencies and administered on their behalf by local agencies or smaller venture capital firms; and on to grants which are 'sums of money given to an individual or business for a specific project or purpose'.
Grants, free money or time consuming nightmare?

The first thing to say about grants is that while they do not usually cover all of the costs of a project, they do have the great attraction that so long as you adhere to the grant's conditions you do not either have to repay it the way you would with a loan, or have to part with a share of your business to an equity investor.

They are normally given to assist in business development and so are usually linked to either investment in new premises or plant and equipment; or to a particular activity such as training or new product development.
So if grants are so attractive, what are the downsides? Businesses can find that the application process can be long and time consuming as well as a bit of a gamble with no guarantee of success.

Simply identifying the schemes that your business may be eligible for can be difficult given the range of grants available and funders involved from local authorities, Regional Development Agencies, central government and European Union funding, to non-government organizations such as the Prince's Trust, and quangos such as the National Endowment for Science Technology and the Arts (NESTA) or the Carbon Trust; each within their own application process.

Each funder will have its own objectives which will drive the criteria they will want you to meet which can include:

- the size of your business, as some will only be available for micro or small or medium-sized businesses (SMEs)
- your industry, as some schemes will exclude specific sectors while others will be narrowly targeted;
- your location, as designated economic regeneration areas will usually have more generous schemes than other areas; as well as
- your planned use of the funds.

Grants are usually thought of as enabling funding designed to allow a project to go ahead which would not do so if the grant was not available. As a result, very few grants are retrospective (as you have obviously managed to do whatever it is without having the grant in place) so you will need to apply in advance for a grant for your project which can obviously result in a delay in starting if it has to await the outcome of an application.

Again as 'enabling funding' few grants provide the whole finance required for a project so you will generally have to arrange to raise the balance of the funds required elsewhere, and you will often be asked to prove this is in place.

In some situations, such as training grants, you may be allowed to count the cost of your or your staff's time that is contributed towards the project as part of the matching funding 'in kind'.

The grant may also not cover all parts of your project in which case you will need to arrange funding to pay for these parts yourself.

It is important to also bear in mind that even once a grant has been awarded, it still has to be paid which will often be in arrears once you have submitted proof of your expenditure and often payment. You will need to check your project's cash flows carefully to make sure you are able to fund the project until the grant cash actually arrives in your bank account.

Given the level of information that can be required, a grant application may be a time consuming activity. The approval process can also be prolonged, is sometimes subject to the availability of the pot of funds (as they do run out), and it may also require you to make business commitments, such as numbers of jobs or location of premises, that can restrict your ability to make changes to your business.

Against this, the substantial sums that can be raised by way of grants mean that in any large project the prospects of obtaining a grant should be investigated.

Business turnaround grants

Moreover, it's also worth noting that in addition to support for investment in capital projects, some sources of funding can also provide grants in respect of support for salaries and wages over periods of up to two years where jobs have either been secured or saved, which will include turnaround situations and also some business purchases. As a result of the current recession some substantial grants are being made on this basis, on relatively tight timescales as the government is looking to help support sustainable businesses (and the employment they provide).

To access these sorts of schemes businesses should speak to some of the specialist grant advisors who can search the mass of schemes on offer to identify the types and levels of grant for which you may qualify, and then help in managing the application process so as to raise this type of finance as quickly and efficiently as possible.

Of course the information contained in an article like this can never be a full statement of the legal position as the relevant laws are complex and liable to change. This article can only therefore be a general guide as to the issues involved and you should always seek appropriate professional advice on your own particular circumstances before taking any action.

Keeping an Eye Out For Penny Stock Turnaround Situations

When a company is headed in the wrong financial direction and they want to reverse course, this is considered a turnaround situation. A company on this path often doesn't see the light at the end of the tunnel. It may or may not be the company's fault. Outside factors such as an unexpected law suit or increased government regulation could put a strain on cash reserves.

As an investor, you can take advantage of a turnaround situation if you know what to look for. There are opportunities to participate in a turnaround situation that often times are not as drastic as a company heading into bankruptcy. Some turnaround situations rise from short-term events such as a mistake in the direction the company took. As an example, maybe a company opened a new store... only to find out unexpectedly that a major highway was going to be built next to it. The highway project significantly cut down consumer traffic that was very high when the feasibility study was undertaken. Or maybe management just calculated wrong and the store was not profitable. Nonetheless, after investors sell the stock after blaming management, the stock could be sitting at an attractive price.

Some of the best penny stocks are frequently sold off disproportionately to the loss that a company has incurred. A company that has suffered a 20% drop in their earnings will see a greater percentage drop in the stock price than the percentage of earnings it lost. This happens naturally as investors lose faith in the ability of the company to produce profits. But the price of the stock could potentially turn around and recover to its previous price if the company gets back the earnings next quarter.

The problem is that investors sometimes overreact and in turn, overlook the benefits of a negative event. Companies go through different stages in development. If the fundamentals of a company still exist even when it runs into tough times, investors who watch closely often can find a bargain with a company in a turnaround.