Business TurnAround

You've just acquired a business or been put in charge of a department. It is a mess! Everywhere you look you see areas that should be fixed immediately. As is always the case, you have limited resources. Where do you start?

Basically, every business can be broken down into three categories-Input, Process, and Output. A manufacturing company brings in raw materials, manipulates the materials and turns out a finished product. To improve a company, start at the end and work backward. In other words, start with the finished product, then your internal processes, and then your supply chain.

No matter what the business, the client is where the money ultimately comes from. The first job is to list each point of client contact. Go beyond the obvious of the sales and marketing department, look at support, training, and dispatching. Include any mailing, phone call or personal contact that the client has with your company. Once you have this list, make sure someone is responsible for improving the quality of each contact. Clients get upset or confused by inconstancies. If both marketing and technical support mail information to the clients, the materials should have a similar look and feel.

Many businesses get in trouble because they are over-extended. They are offering more products/services than can be managed. In a well-run company, the revenues are matched to the expenses. This makes it easier to determine which products/services make money and which ones are killing the company. With the mess you inherited, you likely can't tell which product is subsidizing a money loser and which ones can stand on their own. Have your employees keep a detailed time log for one week. While they are doing this, contact your largest customers and ask them which of your products and services they consider essential. When you compare the two lists, you may find the staff is spending 80 percent of its time on the least important projects.

Some of what you sell are considered your core competencies. These are the real reason you are in business. You can produce these better than anyone else, but you probably sell other services just to help your clients use your core products. Can you subcontract these functions to other companies that produce them better and at a lower cost? Is it the best use of your resources for you to provide the service?

As companies mature and the staff becomes more knowledgeable, the corporate focus needs to change. Frequently, instead of the client telling you what they need, you now know more about the clients business than they do. You can start selling advice. The more value you add, the more income you can produce.

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