In order to increase the profitability of the company and its adaptation to market conditions of doing business, it is often necessary to carry out a reorganization of the operational, legal, ownership, or other structures of the company. The comprehensiveness of this procedure depends on the level of inadequacy of the existing structures to the environment and on the demands for efficient and profitable business operations.
Improving the profitability of any business should be a single, continuous project. Unfortunately, in the majority of companies such a project is neglected in the long run, after which a moment occurs where painful cuts must often be implemented in order to enable the survival and continuation of doing business. At that moment success depends as much on external factors, such as the support of creditors, as on the internal measures that the company is willing to implement.
Activities that need to be undertaken are the same ones that are being undertaken within the normal day-to-day business operations of the company. However, while restructuring, the measures tend to be more aggressive, deeper, more thorough, and almost always painful. The comprehensiveness of the process is extremely important, as any type of financial restructuring rarely makes sense without operational restructuring, and both frequently result in the need to restructure the ownership company structure!
Decisions that must be made at such a point are difficult and often times controversial. Their implementation requires support from all levels of the organization, primarily from the owner. If the owner does not support the process in its entirety, but rather enters it with reserve and hesitation, then it is better to give up from the very start and channel your personal energy into something more productive.
In addition to internal activities, a tremendous amount of energy should be devoted to your surroundings as well: the market, existing creditors, buyers, and strategic suppliers. That is why we most often elect a new company leadership while implementing the restructuring process – one that has already gone through such processes and that is able to, with its experience and energy, play a key role in the successful implementation of the restructuring.
A legal framework in the form of a pre-bankruptcy settlement can significantly facilitate this process, however, regardless of all the legal possibilities, the success of the settlement depends on the successful implementation of each and every one of the above-mentioned segments!