When Is It Time To Restructure Your Business?

When choosing to restructure your business, it’s not always an easy choice. It’s often easier to wait and see how things play out, but if the company takes too long to take action, it might already be too late. You want to make the right choice at the right time, but when is it time to restructure your business?

 

The Company Doesn’t See Results From Hard Work

If the company’s employees are working long hours, but the company doesn’t see sufficient cash flow or results after a reasonable time period, it might be time to take a look at how to do something differently. This doesn’t mean you have to change every single thing the company does, it might just be how you charge your clients, how you communicate with them, or something else. It’s always important to find the why the problem occurs before making any changes.

 

The Company Has A New Leader

While it’s the norm at some companies, new leaders shouldn’t restructure just because they want to put their own spin on how the company operates. Instead, they should first assess whether there’s a need for restructuring to improve efficiency, focus on learning, or align the organization better.

 

The Company Is In An Evolving Industry

Industries and technology have a way of changing in what seems like a blink of an eye. This rapid change means if your company has been doing everything the same way for the last 10 or 15 years, it’s time to restructure. You might also be behind due to economic changes that force you to increase your pricing or find cheaper vendors. It’s vital to pay attention to what’s happening in the industry and how it affects business.

 

High Client or Employee Turnover

High employee turnover is costly, impacts employee morale, and affects the company’s reputation. High client turnover usually means they have low product satisfaction, frustration with customer service or support, or have another reason to sever their partnership between the two of you. To help with employee turnover, ask for feedback and initiate exit interviews to look for ways to improve.

 

Lack Of Growth

If your company sees stagnant or declining profit margins, and this has occurred for a while, it’s a sign you have a problem. One solution is to audit your finances (or processes) by examining your bookkeeping to find out what’s causing your operating income to shrink. At Taurus CPA Solutions, we understand that every business has distinct and specific auditing needs and we strive to provide unbiased, stress-free solutions.

 

Overworked or Underutilized Employees

Having overworked or underutilized employees also leads to high employee turnover, it can also mean that the company may either need to hire more people, spread out the work, or determine if they have underutilized employees. When you have underutilized employees, you’re likely overstaffed in some areas of your company and lack the necessary staff in others. Collect as much information as you can before taking action by relocating employees.

 

If you’re wondering if it’s time to restructure your business, we offer services that can help. Whether your company needs a financial audit, a business consultant, or CFO services, we’re here for you. You can reach out to us through our online form, calling us at 410-465-4600, or emailing us at info@tauruscpas.com