Guide to Restructuring a Business

Evaluate your problems

Analyze your situation to determine if your problems have solutions. Are your company's ailments a symptom of its organization, or are they a sign that your business simply isn't viable? Restructuring can save a salvageable business, but it can't help a failed idea succeed.

I recommend: A turnaround specialist can help you objectively evaluate your business' future and successfully restructure it; find one online courtesy of the Association of Certified Turnaround Professionals (ACTP). Another bull's-eye resource is the Turnaround Management Association which can also point you to turnaround specialists. TMA's resource listings of solution providers is helpful and extensive.

Develop a plan

Create a restructuring plan with which to grow your business and consolidate it. Share the plan with your managers, staff and important third parties, including your creditors and vendors.

I recommend: A restructuring plan should have all the features of a regular business plan. Revisit business plan basics and create a new plan with software, such as Business Plan Pro.

Realign your team

Restructuring should include reorganization of your employees. Start at the top with an evaluation of your management team and work your way down the company totem pole. Replace weak members of your team and eliminate extraneous positions.

I recommend: It's important to handle employee relations delicately while you restructure. Strategic restructuring firm La Piana Associates and Australia's Employee Communication & Surveys provide tips for communicating effectively with your employees during times of change. Consider creating and sharing organizational charts with employees that depict the new management structure.

Restructure your debts

Use the restructuring process to put your finances in order. Take out new loans, if necessary, to fund restructuring, but work with your accountant to make sure your fiscal plans are sound.

I recommend: Find an accountant who specializes in small businesses to help you restructure your finances and your debt; find one online courtesy of the National Association of Small Business Accountants (NASBA). Or schedule a free consultation with BusinessCapital.com, which offers assistance with business restructuring and business debt restructuring.

Execute your vision

When your plan is in place, pull the trigger. Trim less profitable products from your line of business and pull out of unprofitable markets, even if it means closing doors or laying off employees.

I recommend: Purchase customizable employee layoff forms available from HRDocs.com.