Welcome to the business turnaround blog! I want to bring you the best business turnaround content. If you’ve Googled, ‘Business Turnaround Strategy PDF’ then you’re in the right place. That’s a very specific phrase so I’ve created this very specific post. You can download my Business Turnaround Strategy PDF here.
DISCLAIMER: This download is meant to be a visual reminder for you. The detail of what this PDF relates to can be found below. I advise that you print this PDF off and place it somewhere where you’ll see it all the time.
Business Turnaround Strategy PDF
Click the image below to download a copy of my business turnaround strategy pdf.
Business Turnaround Strategies
In a business turnaround, you have 3 options:
- Increase revenue
- Decrease costs
- Do both
This may sound super simple, but you’d be surprised how many highly qualified people I’ve had to teach this to. Let’s look at each of these business turnaround strategies in a little more detail.
Revenue (or Sales) is found on the Profit and Loss statement (P&L). If you’re not very familiar with the P&L, then check out my FREE Profit and Loss 101 guide here.
Sales is the very top line of a P&L. Here is a very basic example of a Profit and Loss statement.
The first strategy we can deploy is to simply increase sales. Give or take, if the rest of the lines stay about the same, then we can expect more profitability. In this example, we have Sales of £500K. Our Cost of Sales is £300K. Therefore our Gross Profit is £200K. If we increased Sales to £600K with the same Cost of Sale, then our Gross Profit increases from £200K to £300K.
But how do we increase sales without increasing the cost of sale? If it currently costs us £300K to generate Sales of £500K, then how can it magically jump up to £600K? It doesn’t.
If you want to increase Sales with the same cost of sales then you have 2 options:
- Charge more (increase your prices)
- Upsell other products (upsell)
By doing either (or both) of these things you’ll be able to increase Revenue and keep Cost of Sale the same.
This is an easy one and the most common way businesses get themselves out of the ditch.
In this example, I have highlighted the Operating Expenses. This is where most of your expenses will be (including staff wages). Typically in any business, wages are the highest cost. If you’re going to get rid of people then you need to do it right. In this post, I show you how to fire people the correct way and measure the financial and operational impact on your business.
I strongly advise you to look at all your expenses and question them. Here’s a list of useful questions you should use to lower expenses:
- What is this?
- Do we need this?
- Do we actually need this?
- What would happen if we got rid of this?
- Can we find a cheaper alternative?
- Have we negotiated this cost? Who negotiated?
I have used these questions successfully to reduce expenses in many businesses. The reason why they are phrased in these ways is that it forces people to think about whether they really need something or not. Challenge people. If they say they need something, then question them why.
Negotiation is one of the best ways to reduce costs. When asked, people usually say that they haven’t negotiated because they assume that they’re paying a fixed price. Wrong! Don’t be afraid to ask. And, for God’s sake, send a good negotiator to do this. Not all negotiators are born equal.
I’m not going to labour this. If you want to have a bigger impact on the financials then I highly recommend you do both. By increasing your Sales and reducing your Costs, you will massively impact your bottom line. If you’re in a turnaround, then I assume that’s what you’d want.
Think of your business turnaround strategy like sports. In sports, you have offense and defense. In this scenario, increasing Revenue is your offensive plays. Reducing Expenses is your defensive plays. Just like in sports, you need both good offense and defense to win games – the same is true in business.