2023, A Year of Business Transformation?

2023, A year of business transformation?

As 2022 draws to a close, businesses are facing some of the toughest headwinds they have faced for years. Supply side shortages post-COVID, the energy crisis, inflation and labour shortages have been increasingly impacting business as the year has progressed. Forecasters are now agreed that there will be a resulting recession in 2023 with some suggesting that this may be the worst recession since the 70’s.

So far, although company insolvencies have increased this year compared to 2021, the company failure rates are still below pre-pandemic levels. Many companies have experienced good trading post-pandemic, although margins may have been impacted by increased costs. Despite the post-COVID economic bounce, the level of corporate borrowings has increased, particularly within the small to medium enterprise segment.

In this backdrop, as we approach the end of the year, it is time to re-evaluate your business and to ensure that it is resilient and built for success and survival.

What is Business Transformation and Turnaround?

When external shocks rock your business, the impact may be extreme resulting in losses and liquidity issues. In situations such as this, it is clear that urgent action is required to ensure that the business survives and avoids insolvency. This is a Crisis of Liquidity and is often the way most business leaders think about business transformation and turnaround.

There are however earlier signs that a company is in need of transformation.

The Crisis of Profitability is often the forerunner to the crisis of liquidity as margins fall, and profits decline or become losses. For many businesses with borrowings, a fall in profits can have profound cashflow implications if the company cannot generate enough profits to continue the repayment of longer-term debts.

The Crisis of Strategy is often the earliest warning sign that business performance is deteriorating. This may be in the form of reducing market share, increased price competition or declining gross margins.

Different skills are required at each crisis point. Companies may have some of these skills “in-house” but working with a specialist in business transformation can bring additional benefits.

The benefits of working with a business transformation/turnaround specialist

• Creating leadership and management bandwidth – Business transformation and restructuring is time consuming, often highly complex, and stressful. It also requires a high degree of focus. A business transformation specialist can be totally focussed on creating and delivering the change to the performance of the company without the distraction of the day to day of running the company.
• Bringing a different mindset or point of view – Depending on the crisis point, a different point of view can unlock alternative strategies or new areas of productivity. In a crisis of liquidity, turnaround professionals will have extensive experience of dealing with similar situations, driving a total focus on cashflow management, and restructuring for survival.
• An independent or trusted partner – A third party can bring new perspectives to the business, the business plan, financial performance, and business improvement options. They often can also provide a trusted voice to external stakeholders and lenders as the business navigates through the restructuring program.
• Adding specialist advice in a wide variety of areas – Business transformation and turnaround specialists may work as individuals, in the role of Chief Restructuring Officer, or as part of a specialist consultancy. In either case differing skills may be needed from sales and channel strategy through change management and operational reorganisation to financial restructuring. The transformation specialist will be focussed on when and where these skills are required and ensure that they are available, either within the existing leadership team, or externally.

Just like physical or mental health, early diagnosis and action improves the chances of a successful outcome, an early discussion with a business transformation specialist, such as Where Now Consulting can result in improved business at one extreme to avoiding the company entering insolvency proceedings at the other.

The economic environment in 2023 will place even more pressure on business. Even strong businesses may find themselves facing the need to transform to compete and survive.

About Where Now Consulting

Where Now Consulting Ltd is a business advisory company and consultancy. Led by Mark Spragg FCMA ACIS, and accredited member of the Institute for Turnaround, Where Now Consulting focuses on growth and business transformation. Working in partnership with our clients, our team has a range in skills from sales, internationalisation, operations, finance, and restructuring, to help deliver improved business performance. Where Now Consulting provides a wholistic approach in the support of our clients. Whether your business is looking to set a new strategy for growth or is looking at business transformation as the result of a crisis of strategy, profitability, or liquidity, Where Now Consulting is your partner for success.

Our Growth services include:

• Business strategy and planning
• Sales and Channel strategy and management
• Internationalisation
• Mergers and acquisitions

Our Business Transformation services include:

• Business turnaround
• Change management
• Financial and operational restructuring
• Provision of Chief Restructuring Officer of quasi–Finance Director services  

For more information call or email Where Now Consulting on

Tel:         0141 370 8999

Email:    info@wherenowconsulting.com