Turnaround Management
LGP Financial Services professionals use a process driven approach to quickly assess a distressed company’s situation so we can offer clear, executable recommendations for the best course of action. Engaging LGP in this delicate process encompasses several important steps: assessment, implementation, stabilization, growth.
Assessment
We start by conducting a situation analysis, which provides a factual assessment of the company’s current condition. This includes a review of cash flow, debt service capacity, capital structure, products, services, operations, reporting systems, and controls and management team capabilities. We also look at prevailing market conditions, the competition, and the company’s core strengths and weaknesses.
Through this assessment we determine the company’s immediate needs to get through the crisis phase, determine the future viability of the business, and develop short-term and long-term action plans with an eye towards stabilization and growth.
Implementation and Stabilization
Based on the results of our operational and financial assessment, the turnaround plan developed by LGP Financial Services often involves re-engineering the company’s processes and rationalizing its operations. We attend to all the vital aspects of the business—cash flow, bank and creditor relationships, operating budget and budgeted line items, and vendor and employee relations. If necessary, LGP can assist a company in debt restructuring and negotiations with lenders to design a more favorable cash flow situation (see Financial Restructuring and Bank Negotiation).
Using our approach, LGP Financial Services’ management team helps companies improve performance and rehabilitate their operations and financial health. We work with the management, equity holders, and creditors to determine the key performance indicators for the business and develop methods to track performance. We also establish systems and procedures designed to help the company avoid future pitfalls that can lead to a crisis recurrence. To obtain optimum results, our turnaround management specialists are available as needed to assume key managerial roles within the company or guide incumbent executives on an interim basis (see Interim Management Services for more information).
Once the most urgent situations have been addressed, LGP will start implementing more long-term strategies that restructure the company’s balance sheet to start yielding improved profitability, and put into place those measures designed to assure long-term stability and growth.
Growth
Moving towards financial health, operational stability, and improved relationships with creditors and banks is a huge step on the road to recovery for a distressed business. It takes time, focus and commitment on the part of company executives and employees. LGP Financial Services provides a steady hand and guidance along every step of the way, as we monitor performance milestones and management performance to ensure success.
Long-term turnaround solutions might include a management search for key executive positions or to replace the interim management team provided by LGP Financial Services. Other opportunities to maintain long-range financial health of a firm could be to ensure operations are solid enough to attract investors, another service we can help you with.
Our goal is to get your company back in the black, running smoothly and efficiently, with action plans in place from the executive suite down to the department managers to the sales staff to the production floor.
President Lou Pacelli is an active member of the Turnaround Management Association.
