Corporate Restructuring – increasing your business efficiency
To be successful on a long term basis it is essential that companies can respond to fluctuations in the economy and endure dips in income. In some instances, companies may need to change their business processes and working methods in order to operate as efficiently as possible. Corporate restructuring enables businesses to do this, reduce costs, increase profits and allow companies to avoid closure and insolvency in some instances.
Unfortunately, there are a number of factors than can have a negative effect on a business and subsequently reduce income. An increase in tax liability, recession, negative media attention and increased competition are just some of the factors that can reduce a company’s cash flow. Ideally, companies are able to survive temporary cash flow reductions but this is not always possible. Issues such as, a floundering economy or an unavoidable increase in production costs can leave businesses facing long term income loss which can have a profoundly negative and sometimes catastrophic effect on the business. It is essential that businesses react quickly and effectively to such issues. By undergoing corporate restructuring they ensure the business is equipped to survive such changes and can increase profits in both the short and long term or return the business to profitability.
The options available to businesses considering corporate restructuring are vast and very much dependent on the industry, nature of the business and specific issues the company is facing. The merging of departments, disposal of company assets or reduction in workforce may be necessary step to keep a company functioning and can all be conducted during a period of corporate restructuring.
By accessing the services of corporate restructuring specialists, businesses can seek advice regarding how best to restructure the company. In addition to providing a range of viable options and calculating the associated risks, corporate restructuring experts can assist with the implementation of changes to the business and provide additional resources to staff during the period of corporate restructuring.
It’s even possible for businesses to begin a cycle of corporate restructuring before any income is lost or before damage occurs to the business. For example, if upcoming legislative changes are going to place additional burdens on the company and ultimately reduce income or increase costs, a strategic corporate restructuring plan can enable the business to implement changes prior to the enactment of new regulations and avoid any loss or harm to the business. The quicker a business responds to unwanted or enforced change, the more chance it has of surviving and increasing profits as it does so.
Whilst many companies undergo corporate restructuring following a period of reduced trading or income, business also often seek to the assistance of corporate restructuring specialists during time of growth or expansion. Even before trading begins, many business owners plan for projected growth and assess potential routes for expansion. When growth occurs, the original business structure may not cope with increased production and require remodelling. The use of corporate restructuring services can enable the business to assess all viable options and implement the changes in an effective and efficient manner.
As businesses are constantly subject to external and internal change, it is essential that they are adaptable in order to survive on a long term basis. Whether the business is expanding or economising, corporate restructuring allows a business to respond accordingly and become as profitable as the market allows. Although some corporate restructuring methods, such as downsizing or reducing workforce, can be difficult, they are sometimes the only method of ensuring the business is able to continue to function and return to profitability. It is essential that businesses welcome corporate restructuring methods both in times of difficulty and prosperity in order to function at their optimum level and maximise economic success.
Baker Tilly is an independent firm of chartered accountants and business advisers, positioned as one of the leading mid-tier accountancy firms. Baker Tilly specialises in Corporate Restructuring services to SME’s. For further information please visit http://www.bakertilly.co.uk/services/recovery/corporate-restructuring.aspx