Hang On…!

In these tentative times – your business could be approaching a challenging chapter.

But you can take some solace, as the boat you are in is full; and is as large as  the Titanic!

According to official statistics almost 100 businesses are going into liquidation everyday in the UK, at this present time.

To ensure you are not sunk by a seemingly innocuous obstacle you should look ahead – much further than your competitors.  We call it Over-The-Horizon Thinking. (OTHT)

It could be argued that gaining an advantage over your competitors, in the current market, may never have been so simple.  All you need to do is stay in business and watch them fall by the wayside.

Easier said than done – time is a significant factor to any distressed business.  Cashflow is certainly King and managing this can be a full time job, in itself.

Turning a distressed company around to face forward, then helping it gather speed from its own momentum is challenging, especially if you are working IN the business.

This week business news told us HMV are proclaiming a new beginning after their three pronged turnaround was realised.  They are seeing sales and profits soaring.  Its total sales grew by 3.1% to a record £2bn in the past year.

They have diversified into live events and ticketing sphere which has proved successful, with the purchase of venue owner MAMA Group for £46m this January having strengthened its position.

A three-year “transformation plan” had earlier been unveiled by Mr Fox in March 2007 in response to falling CD sales and the growth of illegal music downloads.

However, bringing in a costly team of ‘experts’ that charge fees up front, would be the final nail in the coffin to most SME’s.

It just isn’t an option.!

And – it could be argued that it was the collapse of rival music retailers Zavvi and Woolworths during this recession that really came to the rescue of HMV, not the so called turnaound experts.  But credit to HMV for their Over the Horizon Thinking it set them apart from the competition.

If you feel your business has difficulties ahead; act swiftly.

If HMV hadn’t reacted swiftly then perhaps we would be reading the reverse; with Zavvi hanging on and HMV calling in the liquidators…

In the last two years we have merged and acquired companies to assist in their turnaround – but always without a fee.  Our philosophy doesn’t allow us to charge fees from a business that isn’t making a healthy profit.

So how do we make our money – we align our upside with the success of the business, usually through an equity stake.  When the business is back in profit and our work has been done, with n omore value t obe added from us we would exit the business and crystallize the value of our shares.  This can be done in a number of ways and will be done in order t onot harn the business moving forward.  It is possible for a company to buy back it’s own shares with profit.


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