Corporate restructuring is a commonly-used approach used by staffing companies to stabilise and improve performance. The process requires an in-depth review of existing business operations and adequate resources to achieve forecasts. 

It is also wise to put in place a short-term tactical plan to avoid any further problems while the restructuring process is put in place.

Every aspect of your company’s operations needs to be analysed to achieve the level of detailed results required to bring about an effective restructure. You need to understand what drives costs, profits and cash flow, and identify the financial burdens that have to be addressed – those non-core areas that may include premises, loss-making operations, employees or unprofitable contracts. 

If a company waits too long to address problems within its business, the resulting restructuring may be very painful. The key is to recognise the need to restructure as early as possible. A ‘restructuring audit’ completed regularly would update opportunities to create value by voluntarily restructuring, before circumstances leave a company with no choice. 

The main aim is to establish a restructuring plan that saves jobs, goodwill and business infrastructure. Restructuring means confronting some in management who may be in denial, and communicating to all stakeholders – clients, customers, suppliers, employees and directors to ensure they understand the situation and the chosen course of action. 

Companies that restructure successfully usually either return to their previous level of business activity or to their previous rate of growth but at a smaller size. In both scenarios the right key people will need to be in place to see through significant change.

Consider restructuring options, including corporate spin-offs of less compatible parts of the business, doing a leveraged buyout, or repurchasing shares. The process for dealing with those areas affected by a restructure requires professional advice from the outset. 

The consequence of many restructurings is that companies decide to return to their core competencies, selling or demerging those parts of the business that are outside their original skills areas. 

Company credibility has to be retained with shareholders and suppliers alike during a restructure. Don’t make promises you can’t keep, because once broken, your reputation will be tarnished. 

Restructuring an operation into a viable, more streamlined and profitable business is a hard, difficult process but will ultimately benefit all those involved with your company.