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One course of action often considered is whether a business should be restructured in order to achieve required performance levels. Before pursuing this strategy, a business restructuring plan should be thoroughly evaluated.
Important discussion points will normally include why restructuring might be needed, what is required and how to implement the resulting strategies. Reasons for Corporate Restructuring One of the most common reasons to restructure a company is the desire to prepare it for a sale, merger or employee buyout.
Another common motivation involves reorganizing the business for transfer to family members. With a challenging economy, a third reason for possible restructuring is the difficulty of keeping sales results above a financial break-even point. An additional key reason to review a business reorganization is in preparation for major growth involving new products or services.
In some other cases, legal and financial reasons might dictate a restructuring alternative. Planning Ahead The business restructuring process typically involves diagnosis, planning and implementation.
The diagnosis phase is similar to a feasibility study and includes assessing a variety of possible business scenarios. The planning stage requires the formulation of detailed operational and strategic plans.
Implementation will be closely tied to the business restructuring plan that was approved by business owners and all other important stakeholders. Anticipate that the diagnosis and planning parts of the process will require a minimum of several months and often more than a year.
Company Restructuring Process Three of the most important parts in any business restructuring are the participation of corporate stakeholders, adherence to any legal restrictions and flexibility during implementation. While there are no specific laws or government regulations stipulating what needs to be included in a business restructuring plan, it is not unusual for legal challenges to occur.
In particular corporate lenders and any other parties with a vested financial interest in the company likely will have questions and legal concerns regarding their involvement in the restructuring. This is likely to be more detailed and time-sensitive than a traditional plan. One key to success is how effective business owners and managers are in adapting to changes during the implementation phase.
As a business owner contemplating even the most basic restructuring plan, you should be prepared for the challenges ahead.Business owners should periodically assess how to improve financial results.
One course of action often considered is whether a business should be restructured in order to achieve required performance levels.
Before pursuing this strategy, a business restructuring plan should be thoroughly evaluated. Attachment 2 - General Workforce Restructuring Plan Template_Rev1 OFFICE of the GENERAL COUNSEL Independence Ave., SW Washington, DC, How to restructure and reorganise your business.
May 21, You may want to draw up a complete business plan, with both short-term and long-term earnings forecasts; this gives you something to show to investors, including the banks if you are seeking business loan funding, and also gives you something to fall back on later if .
Attachment 2 - General Workforce Restructuring Plan Template_Rev1 OFFICE of the GENERAL COUNSEL Independence Ave., . The need for restructuring doesn't necessarily mean the company is in financial trouble.
A small-business owner may undertake restructuring efforts because she does not believe the company is performing up to its full potential.
The process starts with creating a restructuring plan. How to Develop a Strategic Plan for Restructuring a Department by Craig Berman - Updated September 26, Reorganizations can be necessary to reflect changing business models or economic conditions, but they can be disruptive to both staff and customers without proper planning and execution.