Preliminary Turnaround Strategy

Time Frame – 90 days

  1. Take control of cash right NOW!
  • Must stop the bleeding. Cash conservation.
  • No spending without CEO authorization. Down to the penny.
  • Hiring freeze
  • Checks will only be signed to keep vendors from shutting you off
  • Identify hidden cash
  1. Forecast cash
    • Similar to budgeting that you do in your personal life
    • Review checkbook and make sure this month’s expenses do not exceed the current bank balance
    • Only pay what you must
    • Selling accounts receivable
  1. Find cost savings
    • Eliminate departments (Most corporate such as Operations, Marketing, and Accounting. Web Site, etc.)
    • Telephone expense, business supplies, advertising, employee reimbursements

 

  1. Restructure trade debt
  • Professional debt negotiator
  • Letters to vendors

 

  1. Layoff deadwood and underperformers
  • This layoff is about survival
  • Sometimes sacrificing good people
  • Hard decisions will need to be made

 

  1. Collect more money from customers
  • Collections at front desk
  • Settlement offers before accounts are sent to collection

 

  1. Sell receivables
  • Notify ABC of situation and make request
  • Cash conservation

 

  1. Restructure long term agreements
  • Supplier or lease agreements
  • Debt negotiator

 

  1. Restructure long-tem bank debt
  • Debt negotiator

 

  1. Sell unproductive assets
  • Convert these assets into cash as quickly as possible
  • Equipment, supplies
  • Hulen

 

  1. Look at sales and lease back
  • Sale and lease back of Ranch property

 

  1. Look for other sources of financing
  • To be clear, it will be a difficult ride

 

 

Turnaround Plan

 

  1. Gather data
  • Key staff interviews
  • Member suggestion boxes

 

  1. Analyze data and create turnaround strategy
  • Done quickly
  • Solutions are usually obvious and there are usually only a limited number of choices

 

  1. Identify cores businesses
  • Keep the cash generators and get rid of the cash neutrals and cash sinks
  • Group exercise
  • Nursery

 

  1. Discover your competitive positioning
  • Is this a sustainable position?
  • How will your retrenchment around your core business affect current competitive position?
  • What competitive position would you like to have?
  • If a better market position is available, can you make money in it?

 

  1. Develop Sales forecast and  sales strategy
  • Sensible forecast for club memberships
  • Cost per sale analysis

 

  1. Redesign your organization and reduce headcount
  • Biggest cost savings in a turnaround
  • Start with positions in non core businesses
  • Scale back management and support positions

 

  1. Find Cost Savings
  • Nursery
  • Group Exercise
  • Front Desk
  • Advertising

 

  1. Develop a personnel strategy
  • Plan to motivate remaining troops
  • A key technique is compensation
  • Compensation based on performance
  • Monetary and non monetary rewards

 

  1. Develop a funding strategy
  • Selling receivables
  • Reducing inventory
  • Stretching vendors
  • Restructuring trade debt
  • Leasing companies (on paid off equipment)

 

 

Financial Projections

  • Sales forecast
  • Staffing budget
  • Materials/Cost of Goods forecast
  • Expense budget
  • Capital Budget
  • Cash Flow forecast
  • Firm forecast
  • Next years forecast

 

 

Major turnaround objectives

 

  • Club’s always preserve a positive cash balance
  • Club’s can produce cash each month
  • Club’s core business position is sustainable

 

Meeting with all key team members to outline the agenda

 

Our Other Sites
close slider

Subscribe To Our YouTube Channel


jtod-150-cut
Jim Thomas On Demand


gymsforsale1
Gyms For Sale

Pin It on Pinterest