Richard looks at why, when restructuring an insolvent business, you have to focus on what you love to do.
– Should restructuring your insolvent business be based on your skillset?
– Is restructuring an insolvent business about growth…or becoming smaller?
– How to decide a time-frame for restructuring your insolvent business.
– Why restructuring your insolvent business is really all about you.
‘Restructuring an insolvent business’ transcript
It’s Richard Simms here, from FA Simms & Partners. Thanks for joining us.
We’re talking today about The Kitchen Table business rescue guide. If you remember, we were chatting about the way you can deconstruct and reconstruct a business to get it the way you want it to be. Get it fit for purpose for the future going forward.
We’re talking today focusing, I suppose, mostly on the good bits of the business and how can we make those assets – those parts of the business that are good – make the most of those parts for you? How can we make them work better for you?
Now the first part of that, actually, is you. If you’re running your business as the sole owner, or two or three or you as the sole owners, whatever structure you work out, there will be a couple of you who are the crux of the business.
Now I’m actually going to take just an individual as the main business owner as an example here, because it’s quite a good way of working this through as a route to consider this. Because if you are a particular individual and your skillset in your mind is X (wherever it might be), and you don’t think your skillset can change. Or you think your skillset is particularly unique, whatever it might be, then of course Point B (this is the end result of your business planning, your business reconstructed) is going to always include using your own skills again. Because you’re saying now, “My skills, that’s what I need to do. I can apply my skills nowhere else.” So it’s important we consider that.
Because that changes the approach we’re taking to this process. If you’re saying, “Actually, well no. Actually my skills are quite broadly applicable. I can take my skills and do different things with those. I can make those skills…” I’ll give an example here:
I spoke to a client on the phone back a few months ago and their skillset was marketing for exhibitions. And at that particular time the exhibition market was very flat, very little opportunity for them. And so I talked to the client, we talked about what else they could do. And they were quite quickly able to identify some different markets they could move into quite easily. Markets their skills were very applicable to.
So that’s what I’m saying. Look at you. Look at your skills, what you do, what you’re best at. And I’ll give you an idea for myself as well. Personally, there’s bits in my business, bits of the work we do here I love. There’s bits on what I do here I hate. And you’ve got to work out at the end of the day: what gets the best out of you? Because you will be, possibly, a lot like me. You’re the most enthusiastic person you can be…if you’re doing the bits you enjoy. You can be quite negative and you can be quite down if you do bits you don’t enjoy doing.
The challenge here is to work out what bits you do want to do. Because actually you would work better, in my view, doing the bits you do enjoy doing. Because those two run hand in hand. The bits you don’t like doing you’re probably not the best at. Or you do it a bit with gritted teeth, you know, not really enjoying doing it. So we’ve got to say, right, what do you really want to do? And I alluded to this in a previous podcast, previous episode, many businesses we talked to have grown because they think growing is the right thing to do. They’ve tried to make themselves bigger because they think that’s the right thing to do.
So many businesses over the years have said, “Actually, the best thing I could do is go back to where I was three or four years ago, be smaller, be more in control, be more dynamic, be more agile.” And that to me, is maybe something you need to consider as well. Don’t ignore that part of it as well. Don’t think about…don’t just see…don’t let your current business define you and define your future plans. You’ve got to be able to say, “Right, this is going to do this in a separate way. We’ll do things differently if we need to.” Be open. Be flexible. It’s really important. Okay?
So think about yourself. Think about what you want to do and where your skills are. Think about how your skills could be applied to a changing marketplace. Make sure it all works out from that side. Really, really important to think about that.
Okay. What about your business itself? What is it that makes you unique as a business? Because we know actually, ultimately unique sales. Skills sell. Individualities sell. Really important stuff. So you may say to yourself…what about your business? Do you have a brand? Do you have a website? Do you have a domain? What is it that makes your business unique in itself? What makes your business different? Is it a certain skillset it has? Is it a brand? What makes it a bit different?
Examples there, say, it could be you have a certain domain, you have a certain design right. You have a certain skill. Your experience is quite unique. There’s also a little bits and bobs like that that make it very specialist indeed.
And when I talk to people, I’m very, very lucky in the work I do. I meet lots and lots of different businesses. I’m learning every day about different business types and how people run businesses, how they operate. That not only affords me to help them in their business. It helps me to inform me to help my business. Because we constantly have to change ourselves and learn from that process.
You look at certain ways things operate. Certain skills people have and think, “Can I apply that skill to what we do? What can I learn from that? What can I help? What could that help me? What I’ve learned from there to apply to a different sector? How would that work? How does the cashflow work in that sector? How does that change?
So don’t ever think that any experience you have is lost because every experience you have is really valuable to this. So think about what your business does. Think about how it does it. Think about what you can learn about a business. Think about how you could change, if you need to, your business, to make it more fit for purpose for the future. How do you make it different from that side?
Again, think about yourself. Think about your skills, your connections. Who do you know? Do you have a certain contact? I have a good friend and they have a very good contact in a much bigger business and they are…that allows them to get some work in. And they know they’re going to get a certain amount of work over the year if they keep that relationship in place. Fantastic. What you’ve got to try and do is make sure that relationship…how strong is that relationship? How controllable is that relationship?
I speaking to a client, oh earlier in the week in all fairness. And they were saying to me that they have brought what they considered to be a top salesperson, a top employee that could really helped them. Their employee stayed about three months left and took most of the partners with them. It’s not an unusual story we hear, unfortunately. Because if someone’s in that marketplace and of that nature, they’ll look to take what they can.
And the problem is, I would say here, about small businesses: the risk is that small businesses think they have to be soft and cuddly businesses because your small business has to be super friendly, super nice, super soft, super cheap. A small business doesn’t have to be a soft business. It can be an effective, hard, efficient business. Okay. Don’t see…yes, you want to give a higher quality of service. You want to give good customer experience. All those things. Of course you do just. It doesn’t have to mean you’re a weak business or a soft business. Okay. So don’t just define your business by its size, define your business by what you want to achieve, what you need to do to achieve that, what skills you have.
Okay. So we got to talk about how we make the most of our skills. What other skills need to learn, how to take it forward? How do we leverage what we have? How do we make the most of it? Do we grow? Do we shrink? Again, this comes back to this Point A (where we are today) and Point (where we want to get to). Look at those steps. That process getting from A to B might not happen in five minutes. It might take two years. You might say, “Well, it will take me two years to go off and do a certain amount of training or to recruit or to retrain someone,” or whatever it might be.
Don’t see this as a necessarily ‘instant fix’. Think it could take time to achieve. And make sure your window is realistic. I wouldn’t say your goal much beyond two years, probably realistically, cause any more than that it’s a bit of a pipe dream then. But I would say probably a year to two years, six months even better.
Give yourself a timeframe you think you can control, you can manage to get in control. And it kind of loops around a bit in some ways because…One of the conversations I’ll have with a client, when I sit down and have a conversation about what we’re going to do, they have to understand how long they have to make those decisions. How long do they actually have to make those choices?
Because if we think about our position, if the situation is that the client will lose their biggest customer in six months time then they’ll have no more business, we know we’ve got six months to do something. If we know there’s a payment due in three-months time and they won’t be able to make that payment unless ABC happens, then we’ve got a three-months time window. So ask yourself at the same time: how long do you have? How long do you have to make these changes? How long do you have to consider what you need to do to make yourself the business you want to be? To make that move from A to B? How long do you have?
There’s your part again, beginning to build your scenarios and structures. I’ll come on to talk about that, that sort of structuring and rebuilding of thoughts and processes in the next episode. At this point in time I shall say thank you very much. Thank you for joining us. Do join us for the next episode, in which we’ll be talking about how we take these thoughts we’ve been through, pull them all together and make ourselves some models to look at and see what can work best for us.