How Financial and Operational Restructuring Could Save Your Business

It doesn’t have to be the end of the road for businesses dealing with financial difficulties or underperformance. Using independent experts to assess and restructure your business can help return your company to financial health promptly and, crucially, before any formal creditor actions.

Whether a downturn in the market is causing your business to experience financial distress, or you have an under-performing department, it’s possible to improve profitability and save the business from closing down. The problem is, many directors and management are so involved in the day-to-day operation of the business that it’s difficult for them to step back and take the strategic overview required at these difficult and trying times.

That’s why independent financial advice is crucial for businesses experiencing financial difficulties. And it’s important to act quickly, so you are one step ahead of any potential creditor action and before stakeholders’ confidence in the business erodes.

We can help businesses restructure their finances and operations and rearrange the most appropriate capital structure to meet their key business needs. And in the process, breathe new life into the business.

What is financial and operational restructuring?

Financial restructuring is an out-of-court, informal work-out process. It brings together internal and external stakeholders to negotiate and agree on an acceptable financial way forward to help the business continue to operate as a going concern.

As independent financial advisors, we can help you manage stakeholders’ concerns and get their support by independently reviewing your company’s financial position, cashflow and business prospects. If appropriate, we can then help you draw up a viable restructuring plan that includes negotiating with all stakeholders for acceptance of it as a compromise and better way forward for everyone than a liquidation scenario.

Operational restructuring is a process that helps companies, or departments within companies, identify the root cause of underperformance and develop strategies to improve profitability. Through an internal restructuring process, we can help you find areas for cost reductions, identify any skill and resource gaps, assess profit margins and streamline operations and functions to improve efficiency.

Types of Restructuring

Often, financial and operational restructurings go hand-in-hand. Elements of any restructuring plan may include: refinancing and/or rescheduling the repayment of the company’s debt; provision of new capital or asset disposal to bring in cash; implementing cost-cutting measures to preserve cash; and the replacement of management if necessary.

As Gwynn Hopkins, managing director of Perun Consultants, explains: “The most appropriate capital structure for a company is based on an assessment of the business’s operational needs in generating revenue for its stakeholders. An understanding of its underlying operations is key to diagnosing its past performance and how it can operate differently going forwards.”

“Early intervention to restructure, and communication with stakeholders for their collective support while a restructuring plan is formulated, is key to protecting a viable business as a going concern.”

At Perun Consultants, we have decades of experience in many high-profile insolvency and receivership appointments. Whether acting for the company, its legal advisors or creditors, we can provide a timely and accurate report of the company’s financial position and the feasibility of its turnaround strategy as the basis for any viable restructuring plan. 

Please contact us if you would like to speak to a member of our team about how we could help move your business forward in challenging times.