In business, there are instances where a radical overhaul is needed. Restructuring can give you the flexibility and freedom you need to survive or even grow in the current and projected market conditions. However, the drastic changes involved in business restructuring can also be complex and nerve wracking. Restructuring can meet several goals including improved finances, communication, operations, and reporting, and it may be needed to meet legal obligations. It can lead to bigger and better times in business. However, it is time consuming and detailed, and requires expert consideration of the impact of almost every element of your business. So, what does it involve and does your business need it? Here’s a guide to the whats, whys and hows of business restructuring from leading business consultants in the UAE. This way, you’ll be able to see the process clearly and navigate your way through what can be a difficult period for your business. Why might a business choose to restructure? A business restructure involves a full change in operations or financial structure, or both. Business restructuring usually happens for one of two reasons. The first is an emergency response to a dire situation. This might be an unforeseen event such as a sudden shift in market conditions, or unexpected or excessive debt. It could also be motivated by a major transaction, such as a takeover or demerger. The second is a planned response to projections of a shift in conditions and is intended to safeguard your business or help it flourish. Restructuring can reposition a business for sustained growth, increase its value and its attractiveness to investors. Situations that might inspire restructuring include: \tEconomic downturn with forecasts not predicting a fast recovery \tWeakening credit ratings \tIncreasing debt \tA recent history of poor decision making or lackluster performance \tDecreasing competitiveness \tCurrent and continued misalignment between corporate strategies and goals \tA forecasted shift in demand for your product or service \tOngoing difficulties with investors. It is crucial to understand that when restructuring is carefully planned in response to data-driven forecasts, it can not only ensure business continuity through troubled times but it can also grow and expand your business. The ultimate goal is a smoother, more streamlined and more secure way of running the company. What might a business restructure involve? A well-designed business restructuring process involves the following steps: Completing a full business review A detailed evaluation of your business model needs to be made. It must review all the processes and strategies that are part of this model, both current and already planned. Ideally, an independent body should undertake this evaluation. This will help to prevent bias and will also bring in outside knowledge from experienced business consultants to set the process off in the right way. A clear understanding of the problems and issues your business is facing is a vital first step. Receiving recommendations After a full review, a business consultancy may recommend the following: \tRemoval of some product or service lines \tCanceling or renegotiating contracts \tClosing of facilities \tEliminating or downsizing departments or divisions \tWriting off assets \tRelocation or redundancy of employees. This can be a painful, tumultuous time for the business. However, the end goals of safety and efficiency must be kept in sight. Finding suitable alternatives Trusted analytical tools are needed to find suitable options for your business restructure. Remember that a key objective of business restructuring is to reduce complexity, not add to it. Again, expert help from business consultants will identify the most sustainable operational and financial models that comply with regulatory requirements. While the business may need to contract in some or all areas, it may also need to expand. The following processes may be recommended: \tEntering new markets \tAdding products or services \tRelocating some operations \tAdding property or assets \tRetraining and upskilling employees \tHiring additional personnel \tNew operational procedures An overhaul of IT systems Setting up contingency plans No business model comes risk free so contingency plans will need to be made. A full risk analysis enables businesses to plan for all eventualities. Marketing of plans Any restructuring plans need to be communicated effectively to all stakeholders. This is an important stage that can affect the effectiveness of the restructure if not handled correctly. Putting plans into operation The next step is to put plans into action. This can be time consuming and stressful. A good business consultant can provide expertise and reassurance throughout this time. Continued monitoring A business restructure should not be considered a one-off moment in time. Consistent and regular monitoring needs to take place to ensure goals are achieved and continue to be met. How expert business consultants can help Experienced and highly-qualified business consultants are essential to a successful business restructure because they bring in broad knowledge and expertise of the process, as well as an impartial eye. They can: \tIdentify your key business drivers \tMaximize project engagement \tIdentify risks and prepare contingency plans \tEnsure compliance with all laws and regulations \tDeliver restructuring within budget and within an agreed time frame. \tProvide full support and training where necessary \tCreate and present a convincing pitch to stakeholders and investors \tProvide assessment post restructuring. Be sure to invest in a reputable, knowledgeable and experienced business consultancy. Lower-priced services could pose a risk in terms of the quality and quantity of advice. The cost of restructuring can be a deterrent. However, the process is a proactive move to safeguard the business for the future. Therefore, it is a wise investment when appropriate. Get started with business restructuring If you’re considering restructuring your business or are wondering if it’s the best next step, the right thing to do now is to schedule an initial meeting with a reputable business consultancy in your area. They can discuss your business requirements, the current and projected market conditions, and offer some advice on the appropriate steps to take. You need to find a consultancy that offers professional, honest but friendly advice. Remember that the aim of working with them is to improve efficiency. Therefore, a smooth and mutually respective partnership is required to navigate a successful business restructure.