Time Frame – 90 days
- 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
- 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
- Find cost savings
- Eliminate departments (Most corporate such as Operations, Marketing, and Accounting. Web Site, etc.)
- Telephone expense, business supplies, advertising, employee reimbursements
- Restructure trade debt
- Professional debt negotiator
- Letters to vendors
- Layoff deadwood and underperformers
- This layoff is about survival
- Sometimes sacrificing good people
- Hard decisions will need to be made
- Collect more money from customers
- Collections at front desk
- Settlement offers before accounts are sent to collection
- Sell receivables
- Notify ABC of situation and make request
- Cash conservation
- Restructure long term agreements
- Supplier or lease agreements
- Debt negotiator
- Restructure long-tem bank debt
- Debt negotiator
- Sell unproductive assets
- Convert these assets into cash as quickly as possible
- Equipment, supplies
- Hulen
- Look at sales and lease back
- Sale and lease back of Ranch property
- Look for other sources of financing
- To be clear, it will be a difficult ride
Turnaround Plan
- Gather data
- Key staff interviews
- Member suggestion boxes
- Analyze data and create turnaround strategy
- Done quickly
- Solutions are usually obvious and there are usually only a limited number of choices
- Identify cores businesses
- Keep the cash generators and get rid of the cash neutrals and cash sinks
- Group exercise
- Nursery
- 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?
- Develop Sales forecast and sales strategy
- Sensible forecast for club memberships
- Cost per sale analysis
- 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
- Find Cost Savings
- Nursery
- Group Exercise
- Front Desk
- Advertising
- Develop a personnel strategy
- Plan to motivate remaining troops
- A key technique is compensation
- Compensation based on performance
- Monetary and non monetary rewards
- 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