The document discusses signs of distress for troubled companies and provides steps to successfully turn a company around. Some key signs of distress are strained finances, unhappy customers and employees. Critical steps include creating an action plan, tightly managing cash flow, informing stakeholders, and eliminating unnecessary costs. Bankruptcy should only be considered as a last resort, and turning to advisors can help guide a successful strategic turnaround.

1. Strategic Turnaround and Business Advisory Services
How To Succeed in Turning
Around Troubled Companies
Updated 9/17/2014
© Copyright 2014 - NYC Advisors LLC

2. What Are Signs of Distress?
 Clear signs for the challenges facing
troubled companies in need for a
turnaround:
• Strained financial resources
• Demoralized executives
• Fearful employees
• Unhappy customers
• Tense bankers
• Angry investors
• Competitors waiting to pounce
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© Copyright 2014 - NYC Advisors LLC

3. Stress and Worry May Keep You From Saving
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Your Company
 Here are some common worries
associated with a failing company:
• You can’t pay the employees on time
• You can’t pay your taxes
• Can you make your loan payment
• Numerous calls from unpaid vendors
• Is bankruptcy the right answer?
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4. Steps to Fixing Your Company
 Evaluation, Damage Control and
Action Plan
• List all the challenges you face and
suggested solutions
• Understand the workflow & workload in
each department
• Prioritize the steps you are to take, and
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re-evaluate the cost/benefit of each step
• Have a detailed written business plan -
 Sales & Marketing, Financial, Operational
© Copyright 2014 - NYC Advisors LLC

5. Steps to Fixing Your Company
 Control Cash & Cut unnecessary costs
• Daily Cash Reports
• Read and approve each expense
• Accounts Receivable - Collect as quickly as possible
• Accounts Payable – extend payments
• Consider switching to lower cost vendors for essential
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services & supplies
• Keep only people who are bringing in, making, or
servicing sales
• Immediately after the cuts, inform all employees of your
action
• You will be surprised how much you could
have saved had you paid more attention to
your business
© Copyright 2014 - NYC Advisors LLC

6. Steps to Fixing Your Company
 Meet with key personnel and your
board of directors or advisors
• Form an Advisory Board
• Get key employees together to have a candid
discussion on how to fix the company
• Ask for their cooperation and seek advice based
on their expertise
• Always share the reason for changes with
employees
• Informed employees will cooperate with
you to save the company and their own
jobs
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© Copyright 2014 - NYC Advisors LLC

7. Steps to Fixing Your Company
 Always be prepared
• Don’t go into any meeting without a plan of
your own
• People lose confidence in leaders who lack
a plan and vision for their business
• The key in this type of meeting is to be
self-assured, open-minded and flexible
• Share your plan with investors,
management and key employees
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© Copyright 2014 - NYC Advisors LLC

8. Steps to Fixing Your Company
 Meet with customers
• Dealing with rumors
• Key customers are becoming nervous and
some are even looking for alternative
suppliers
• Inform your customers about your situation
and tell them how you plan to correct it
• Be reassuring, but not deceitful
• No one likes to be surprised –
customers usually cooperate if they
are well informed
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© Copyright 2014 - NYC Advisors LLC

9. Steps to Fixing Your Company
 Meet with vendors/suppliers
• Company’s vendors get very nervous when
they hear rumors that one of their customers
is having trouble
• Develop a plan for each vendor, outlining the
problems and how you plan to deal with them
• Consider looking for new suppliers
• Work-out a detailed plan with your most
valued vendors
• No one likes to be surprised – vendors
usually cooperate if they are well
informed
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© Copyright 2014 - NYC Advisors LLC

10. Steps to Fixing Your Company
 Contact tax authorities
• If you can’t pay - notify the authorities
• NEVER EVER stop paying your employees’
tax withholdings – that’s considered THEFT.
• It is criminal not to pay sales tax you have
collected on behalf of the government
• Tax authorities will work with you
• No one likes to be surprised – the tax
authorities usually cooperate if they
are well informed
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© Copyright 2014 - NYC Advisors LLC

11. Steps to Fixing Your Company
 Contact your bankers
• Have a face-to-face meeting with your
banker
• Give them the bad news AND your action plan
• Be specific with your request for assistance
• Appear confident and reassuring
• No one likes to be surprised –
bankers usually cooperate if they
are well informed
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© Copyright 2014 - NYC Advisors LLC

12. 9/17/2014
Success Stories
 A $50M public telecommunications company
• Directed successful turnaround from $4.5M
loss to $2M and $2.8M profit in the following 2
years
 Reviewed product line and eliminated losing
products
 Reduced COGS by $2.5M over 18 months
through negotiations with offshore and domestic
suppliers
 Restructured Accounting Dept. and accelerated
the monthly closing from 17 days to 5 days
 Implemented new IT system, improving
efficiency and management reports
© Copyright 2014 - NYC Advisors LLC

13. 9/17/2014
Success Stories
 A medical insurance & cost-containment company
• Turned around from 4 years of successive losses to first
profitable year within 12 months
 Reviewed participating vendors and negotiated
new cost-effective contracts by promising more
volume to less vendors
 Streamlined MIS and created key management
reports
 Created internal standards for processing
insurance claims, improving customer service to
our clients
© Copyright 2014 - NYC Advisors LLC

14. 9/17/2014
Success Stories
 A $50M public Pharmaceutical company
• Turned a first quarter loss of $235K to year-end pre-tax
profit of $790K, and next year first quarter pre-tax profit
of $1.1M
 Re-engineered all internal controls and established
infrastructure for new departmental financial reporting
 Implemented new financial and ERP systems in Israel
and Canada
 With auditors’ guidance, established tax planning
program for future years while reducing taxes by
$700K
 Worked with bankers to re-structure line of credit
 Replaced key personnel with new professionals
© Copyright 2014 - NYC Advisors LLC

15. 9/17/2014
Success Stories
 A $3.5M plastic wood manufacturer
• Raised $750K in order to keep to company going, while
negotiating new terms for existing senior debt of $1.5 M
• Analyzed COGS, eliminated unprofitable projects,
increased prices and created a focused action plan to
increase sales
• Negotiated new terms with existing suppliers that
cooperated or switched to new suppliers
• Reviewed all expenses, eliminating un-needed expenses
and reducing other
• Worked with Tax Authorities on a payment plan of old
debt
• Reported to employees on progress and asked for their
cooperation
© Copyright 2014 - NYC Advisors LLC

16. 9/17/2014
Summary
 Learn to recognize the early signs of distress
 Create an Advisory Board to help you deal with
your business challenges
 Essential tools for a successful turn-around are:
• Written action plan
• Tight management of cash
• Information flow with employees, customers,
vendors & BOD
• ALWAYS Pay your taxes
• Eliminate surprises
• Think out of the box and be creative – often
there are several solutions to a problem
© Copyright 2014 - NYC Advisors LLC

17. 9/17/2014
Summary
 Bankruptcy should be your last resort
 It’s expensive
 You lose control of the situation
• Think about NYC Advisors, LLC as your
advisor to a successful turnaround
© Copyright 2014 - NYC Advisors LLC

18. 9/17/2014
Resources:
 Kevin Muir - The Insider Secrets to Saving Your
Business: The Step-by-Step Turnaround Guide
 BusinessTown.com - Ten Steps to a Successful Turnaround
 Streetwise Small Business Start-Up
 Turnaroundspecialist.biz

19. Strategic Turnaround and Business Advisory Services
9/17/2014
THANK YOU!
© Copyright 2014 - NYC Advisors LLC