Before seeking small business restructuring, you must understand the documents and information you need to present. Preparing for this in advance can save you time and stress, ensuring your meetings ahead can go as smoothly as possible. In this expert feature on seeking business restructuring advice, we take you through 10 essentials you need to know.
Business Restructuring Advice: Your Company’s Immediate Considerations
When facing financial distress, restructuring may offer your company a lifeline. Once you’ve decided, you must ensure you approach any consultation in the ideal way. Otherwise, you may hinder your chance of a successful business operations recovery.
On an immediate front, you must consider your company’s:
- Compliance with Australian laws and regulations
- Accounting and financial history
- Legal issues
- Organisational and operational structure
- Human resources standing (i.e. potential redundancies and transparency with employee entitlements)
In other words, you’ll need to be clear and upfront about the nature of your financial distress.
Don’t hide any information out of embarrassment or fear of legal consequences—you must be honest. This is for legal purposes, but also to give your company the best possible chance of recovery.
10 Things You Need to Prepare for a Restructuring Consultation
Below is a step-by-step run-through of all the information you should be looking to gather. While all of these aren’t mandatory under Australian law, they’ll help you during this time of financial distress.
1. Set Clear Objectives
Your goal will undoubtedly be setting the foundations for a return to regular trading. Establish your objectives during this phase, such as cost reductions and increased efficiency. Restructuring will help you achieve these, so consider now how ready and willing you’ll be to overhaul your company’s internal procedures.
For this step, be candid. Honesty will help you address the flaws in your business plan and day-to-day activities. The more honest you are, the sooner you can address your struggles cost-effectively.
2. Gather Up-To-Date Financial Statement
This is a vital step and will help ensure you remain compliant with Australian laws. Gather together your most recent, accurate, and relevant financial documents. Including:
- Balance sheets
- Income statements
- Cash flow statements
You’ll need to present these so advisors can understand your financial distress and a suitable route out of your situation.
3. An Organisational Chart
This is a simple diagram displaying your business’s hierarchical structure. Although it may appear superfluous, advisors need to understand your management structure, which includes higher management down to junior executives.
You should do this as it may help identify weaknesses in your corporate structure.
4. Debt Overview
Detailing your liability is vital to understanding how much debt you owe (and to whom). List out all of your debts with details, including:
- Terms
- Payment schedules
- Creditors
- Lenders
Advisors need to see what your liabilities are. This way, they can act accordingly and develop a debt restructuring plan and refinancing strategy.
5. Check Your Legal Compliance
Your business has legal obligations to adhere to. You must be able to show you’re up-to-date with these, otherwise it will undermine your situation. Review your standing across:
- Tax filings
- Australian employment laws
- Contractual agreements
- Health and safety laws
If you have any outstanding situations, address them as soon as possible. If you don’t, this can complicate your chances of restructuring the company.
6. Gather Key Performance Indicators (KPIs)
Operational metrics can help advisors consider the future potential of your company. If you can present performance data then you can boost the standing of your future potential. KPIs to compile can include:
- Supply chain efficiency
- Customer churn rates
- Employee productivity
- Customer acquisition cost
- Customer lifetime value
- Projected annual earnings
Each company is different, so consider your standing in your market and the data you’ll need to gather to show advisors.
7. Customer and Vendor Contracts
Gather all of your major contacts from customers, clients, vendors etc. This is another example of advisors needing to see, and understand, your existing obligations, renewal terms, and any cancellation penalties.
8. Inventory Summary
Gather details about your technology usage. This can include your IT systems, software subscriptions, and overall infrastructure. This can be for an in-office team or for your remote workers.
The reason for this is down to cost and scalability. IT is vital to any modern business, but it also comes at a considerable cost to overhead. The more information you can provide to advisors, the more you can consider IT equipment consolidation, reducing costs, and maintaining efficiency.
9. Employee Data
Documenting your employees is one step, but advisors also need to consider how individual staff members perform. Provide:
- Individual departmental breakdowns
- Compensation structures
- Performance metrics
- Perks and bonuses
Advisors can consider these details and make vital reorganisation and skill reallocation decisions. Unfortunately, they may also need to consider the most appropriate staff for redundancy.
10. Business Continuity and Contingency Plans
Your company may have a continuity plan or risk management structure. If you do, make sure these are made available to advisors. They can check them for business resilience and to see if they need updating as part of a wider small business restructuring process.
Begin Your Business Restructuring Journey Today
At Corporate Lifeline, we offer a free consultation for small business restructure advice. Speak to our expert team today for honest, transparent advice from a leading Australian business expert. We’ve helped hundreds of companies just like yours.
