Preliminary Trade-Out Checklist
If your company has been diagnosed as Underperforming then the Least Drastic Solution open to a director is Performance Improvement. In many cases a director will not need external assistance to implement some Performance Improvement strategies. We have provided a number of Self-Help checklists to assist directors in approaching Performance Improvement. The first we call the Preliminary Trade-Out Checklist. It is designed to be a prompter for directors to think about then implement a change in the way the company is run.
A key element is honesty. It is important that a director carefully consider the problems facing the business.
Ask the following questions:
- Is this business viable? If you could remove the problems or the pressure does it have a real long term future?
- Is money all it needs to sort the problems? Can you safely introduce new money, perhaps from your own sources?
- Have you cut all costs to the minimum efficiency level? If you are not sure, review our Guide to Cost Cutting.
- If your business activity does rise can you:
a) Fund it - working capital problems are just as acute for too many sales as too few!
b) Produce it - if your creditors will not supply will you be able to deliver sales?
c) Justify any further credit you may have to take - is there a reasonable prospect of repaying that credit? If not you may be risking Trading While Insolvent. - Can you maintain the key people you need?
- Are you able to produce your service or product at a price that the market can sustain?
- Would it be better to sell or even close the business and look at other opportunities?
- Have you got the fight in you to keep battling on?
- Have you involved the key partners in your business?
Are you fearful of taking decisions to close, restructure or sell the business and are seeking to trade out to defer that decision-making process?
Are you fearful of taking decisions to close, restructure or sell the business and are seeking to trade out to defer that decision-making process?
If you continue to believe that the company has a future and that the problems are not insurmountable then move onto our other checklists starting with the Informal Deals Checklist. Or if it is all getting a bit too hard why not CALL US NOW for CONFIDENTIAL FREE ADVICE and let one of our consultants talk you through your options.
